Outsource PPC campaigns

[Hanuman07]

Hi,

I would appreciate your opinion!

Want to check with you guys what is reasonable. I have a vendor doing our PPC campaigns (adwords to start with). We will spend 400k over the year in a somewhat competitive industry. Our vendor charge us 12% and will build the complex campaigns on his own account. Just received our first report where CTR in average is less than 0.5% and that all keywords are broad, short tails as well. No negative keywords mentioned yet.

We are in the beginning of our relationship but I am getting cold feet's for several reasons, above is the last reason, another is that I get the impression they don't know this (its a SEO company).

My questions:
1. Is it too much to ask for that the vendor build the campaigns on my own account?
2. What would then be a reasonable deal from vendors point of view?

I would really like to deal with an expert who can comfort me my campaigns are in good hands.

[abbottsys]

You have reason to be concerned - you do not have control. Make it your account, on your credit card, so that you have total access and control of the account anytime for any purpose. Then grant the vendor access to perform management tasks. If they are an experienced adwords vendor, then a management fee of 12% of your total spend is reasonable and within industry standards.

[adamap]

Originally Posted by abbottsys

You have reason to be concerned - you do not have control. Make it your account, on your credit card, so that you have total access and control of the account anytime for any purpose. Then grant the vendor access to perform management tasks. If they are an experienced adwords vendor, then a management fee of 12% of your total spend is reasonable and within industry standards.

I agree with abbottsys, you should own your account. Also, the negatives for an account with that kind of traffic need to be built in pre-launch. For 12% of 400K you should be working with someone that fully tweaks your campaigns, work the match types, negatives, day parting, geo targeting, campaign budgets, ad copy, long tail kw, etc. Do you know if they have content turned on? Do you want it on?

[justppc]

You may be comforted to know that your campaigns are NOT in the right hands. I know this isn't the news you wanted, but it sounds like the news you need. Based on what you have written, your vendor doesn't know what they are doing. PPC is a science unto itself and requires different tools than SEO.
I definitely agree with the last comments about owning your own account, this is important. Although 12% is a fair price for professional service, it doesn't sound like you are getting that level of service.
Negative KW's should already be in place. Broad match only is going to kill your quality score and potentially eat up your budget. Ad and landing page rotation need to be implemented. If you want the best ROI for your budget, you need to make a change.

[emart]

If this is all you know about your campaign, I would be very concerned.

There appears to be a lot of information your agent has not told you that they are doing. The list is quite long, the items mentioned by the other replies are only the start!

The CTR rate is important, but not as important as the conversion rate. Do you have Google Analytics set up to monitor this as well as the conversion tool?

Regards

Richard

[AussieWebmaster]

lol.... seems you have the payment at a good number

the advise above is solid

[Hanuman07]

Thanks all of you, much appreciated. I am actually glad that all of you agree I am in the wrong hands. Makes it easier to move ahead. Fortunately this supplier came in before I joined the company. Its definitely not my responsibility.

Though, I would prefer them doing a good job so that I could focus on my "real" job, lead generations.

However, I have another question for you, now when I know I will change supplier. What CTR can I expect from a professional? Presume we would have 1000 keywords spread over 20 adgroups for a given campaign.

1. If he is lucky, AND make great job what CTR would be impressive!
2. If he makes a good job what CTR would be expected!

Yes, I know it vary but please give me enough to tell my supplier 0.5% will just not make it. Actually I would have made it better myself. I need to get rid of this guy and move on.

[AussieWebmaster]

realistically it is not about the CTR but your CPA - what is he getting your leads for and what quantity

[StockholmConsulting]

Whoa....you should stop this campaign today and do soem more research. Please answer these questions so that we can give you some further advice:

1. Are you selling anything on your website?

2. Do you know your ROI?

3. Do you know your conversion rate?

4. If you would set up an affiliate program and gave your affiliates 10 percent of the sale. How many sales would 48K buy you. (Do not answer if confidential - but think about it).

5. Have you shopped around for other PPC campaigns. We rarely charge anyone more than $20 000 per year. Why did you chose this firm?

6. It is important for you to be number 1 on PPC keywords?

Please answer these questions and it will be easier for us to give you further advice.

Your questions totally depends on what business your are in but genarally:

1. 3 - 10 percent would be very impressive

2. 1 percent is Internet average in most markets so 1 - 3 would be expected.

[blueg13]

Hanuman07 - Another thing you should consider when you choose a percentage- of-spend based management fee - It is in their interests to spend every penny of your budget and push for more.

I'm not saying all agencies would act against clients best interest but a lower spend level may actually be more appropriate for your campaign.

Perhaps consider looking at agencies who charge a fixed fee?

StockholmConsulting - some very valid points -just wondering how you got an 'industry average' clickthrough rate?

[Hanuman07]

Originally Posted by StockholmConsulting

Whoa....you should stop this campaign today and do soem more research. Please answer these questions so that we can give you some further advice:

1. Are you selling anything on your website?

- One of the leaders in our industry is SAP. Our webpage generates leads.

2. Do you know your ROI?

3. Do you know your conversion rate?

-Too low but I am not discussing landing pages here, but building PPC campaigns and ashiving CTR

4. If you would set up an affiliate program and gave your affiliates 10 percent of the sale. How many sales would 48K buy you. (Do not answer if confidential - but think about it).

- We could probably pay thousands of money for any lead generating sales. We could probably pay a lot for any qualified lead generating a meetings. However, we are holding back on affiliate marketing for now.

5. Have you shopped around for other PPC campaigns. We rarely charge anyone more than $20 000 per year. Why did you chose this firm?

- I am doing this now and get some great response. Vendor was selected just before I joined our company. Guess they had a good sales guy. The company has a good reputation for SEO.

6. It is important for you to be number 1 on PPC keywords?

- Not really but I want to work on my quality score getting most for my money

Please answer these questions and it will be easier for us to give you further advice.

Your questions totally depends on what business your are in but genarally:

1. 3 - 10 percent would be very impressive

2. 1 percent is Internet average in most markets so 1 - 3 would be expected.

Thanks a bunch and I hope to hear from you again. I hope you find my questions within the quote.

[Hanuman07]

Originally Posted by blueg13

Hanuman07 - Another thing you should consider when you choose a percentage- of-spend based management fee - It is in their interests to spend every penny of your budget and push for more.

I'm not saying all agencies would act against clients best interest but a lower spend level may actually be more appropriate for your campaign.

Perhaps consider looking at agencies who charge a fixed fee?

StockholmConsulting - some very valid points -just wondering how you got an 'industry average' clickthrough rate?

I am also interested in to find out more about industry averages!

[StockholmConsulting]

Hi,

I agree that leads is not the prime target for affiliate marketing. You are probably right about that decision.

It would strongly argue that 0.5 is a terrible conversion rate since you are only looking for leads. I mean, after all, it is easier to sign up for a lead then to pull out your credit card. You should demand at least a 2 percent.

Here you can read a little about conversion rates:

http://www.conversionchronicles.com/...sion_rate.html

Since it is not important to be the top bidder you should be able to save a lot of money and concentrate on high quality clicks. I think you have the possibility of making your company very happy because I think you could easily:

1. Cut the budget by 10 - 30 percent - concentrate on quality clicks that leads to sign up. Pay less and get more.

2. Cut the cost of your PPC agency.

[adamap]

That is tough question to answer Hanuman07. It depends on the volume your keywords get. To venture out on a limb here I'd consider these estimates to be a successful starting point: 'high volume' keywords to get 1-2% CTR. 'Medium' volume keywords to get 2-5% CTR. 'Low' volume keywords to get above 5%. This is all contingent on these being relevant keywords.

[AussieWebmaster]

And areas where there are highly branded competitors have lower CTRs.... then there are areas where people just don't click on the ads... the organics get more....

[PPCHeroJoe]

I thought I'd through my 2 cents in here in regards to a couple of your questions, and a few other ideas:

Is it too much to ask for that the vendor build the campaigns on my own account?

***No, not at all. In fact, I would say that this is not a standard practice (at least, not at our firm). They should already be building them in your accounts. If not, they're likely paying Google/Yahoo for the clicks (and the client is simply being billed for these by the vendor). In Google's eyes (not sure about Yahoo - I'd have to check), whomever pays for the clicks is the one who owns the account. This may be the vendor's way of keeping the client tied to them - it would be possible for the vendor to stop working on the account but the client would still have to pay them for generating the clicks because they "own" the account.

What would then be a reasonable deal from vendors point of view?

***We charge a $2K setup fee and 12% per month with a minimum fee of $2,000 and maximum fee of $10,000. The min protects the vendor in the case where the budget is very low, and the max protects the client in the case where the budget is very high and/or continues to rise each month. So, for a $400K/year budget, you're spending $33.3K/month. Our fee would be $4,000. I don't know if this is a typical fee - not too many firms publish their pricing.

CTR of 0.5% isn't necessarily bad. Many clicks/impressions could be coming from the Content Network. CTR is an *indicator* of good/bad performance but isn't the end-all-be-all. CPL, sales, or revenue are typically the main metrics you should be looking at. What other metrics are you measuring and tracking?

Without seeing the keyword list, it's hard to say whether not having only broad keywords, having only "head" keywords (as opposed to "tail" keywords), or not having negatives is bad. It's the first month, and there's lots to do. Those items may be next on their list. I would recommend pushing them for a plan for the 2nd month to make sure they're on the list though. If they don't have one, they should be able to send you one fairly quickly. If they can't or refuse all together (saying that it's proprietary knowledge), get out of the contract as quickly as you can. Not having a plan is a good sign they're not really managing the account and just letting it run on auto-pilot.

I wouldn't knock the other firm just because they specialize in SEO. Just because you do one doesn't mean you can't be good at the other too. However, they still have to show a competency level for PPC. Look for indicators that they know what they're doing. Do they have a PPC only blog? Who's their biggest client? How much do they have under management for that client? When you ask questions, how quickly and/or how confidently to they answer? How soon in the month do they send reports? Are they looking at the account every day? How many people do they dedicate to the account? Are those people working on SEO too or just PPC?

Answer some of these questions and you'll be closer to getting the service you're looking for!

[Hanuman07]

Wow, again loads of good replies!

Actually they wont tell anything about there other customers. As they say, - in respect for their customers bla bla

I will deffinitly ask the what their plan as well I will set up common goals. Thanks.