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The Relentlessly-Widening Performance Gap

Posted August 14th, 2013 by Andrew Goodman

Recently, I had a chance to review a deck produced by one agency handing back over a PPC account to its client owners (or potentially, a future agency).

Bullet point after bullet point referred to emphatic actions taken in the account. No doubt this only scratched the surface of the great number of actions taken.

I’ve always worked in the AdWords auction with a tacit ideal of “the perfect account.” Of course, there is no such thing. But insofar as every action has a chance to move either towards or away from perfection (much like a bronze sculpture, except that PPC is 90% science, 10% art), the end result of a vast many changes can vary greatly from manager to manager, account to account.

Analogy #43,589: you can think you’re going in a straight line in the forest, when what you’re really doing is making so many wrong turns you get impossibly lost. Getting out of the forest is actually easy, though, if all goes reasonably well. You find a river and follow it. Not counting the potential hypothermia and bears, “lost in the forest” is a picnic compared with “made 5,000 wrong moves in AdWords.”

What if the majority of changes in the account are pure guesswork, such that no change — the status quo — would have been superior to the change? As performance challenges toughen, are those errors compounded by further changes and desperation borne of declining performance? That sense of urgency — ironically, created by an urgent sense that bold, decisive action needs to be taken (often in the absence of insight into how much of that action is based on inexperience or guesswork) — parallels the “Death Spiral” concept that Jim Collins outlines in books like Good to Great. (That’s the opposite of focusing on the Hedgehog Concept and Turning the Flywheel.)

When you see a list of initiatives being taken in account management, it’s worth asking: how much of it is pure guesswork? Guesswork is nothing like testing. A testing orientation will greatly reduce guesswork. A typical “guesswork” bullet point would say something like “paused all ads with CTR below 1%.” Testing isn’t like that. Try instead: “Chose the winning ad, based on a thorough understanding of performance criteria, not necessarily reduced to one variable in all cases, and insofar as feasible, with statistically significant data (to a 95% or 99% confidence level).”

Other guesswork gimmicks include adding 1,000 new exact match keywords to an account from a keyword dump, because you have a theory about exact match. Despite 30% of those phrases being poor fits in the account. One step forward… two steps back… endless busywork… not data-driven.

When accounts are managed based on pure guesswork, they get farther and farther from perfect, rather than the other way around. Approaching perfection isn’t easy. Even the best account managers using the smartest rules will make many so-so decisions. But they need to be vastly outweighed by a strong overall sense of how moving parts in an account strategy fit together. And most of all, the actions taken should be accurate (not guesswork) most of the time.

Not as easy as it looks. It’s especially daunting to decide (many times over) that “no action” is safer than “wrong action.” How can you improve anything unless you’re constantly doing stuff, right? (Unless it’s the wrong stuff!)

If you hand a high quality account over to a relative novice, it’s predictable what will happen: performance will begin gradually deteriorating from Day One. As things worsen, the scattershot “panic tweaking” begins. It then takes a steady hand and a high quality rebuild to bring everything back into line.

Give an account to a guesswork-driven manager to build from the start, and there’s a good chance it won’t reach anywhere close to its potential.

As one of my colleagues said to a client, once: “It’s like chess.” (Unfortunately, turned out the client was a Chess Grandmaster, and far smarter than 99.99% of the population at chess. But that’s a story for another day.)



One Response to “The Relentlessly-Widening Performance Gap”

  1. Riza says:

    Took me to a whole new level of understanding about guesswork and why it isn’t enough to succeed in making decisions.

    Learned a lot from this article. My favorite line would be this: “As things worsen, the scattershot “panic tweaking” begins. It then takes a steady hand and a high quality rebuild to bring everything back into line.”


 


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