Improved PPC Marketing Performance from Time-Tested 80/20 Principle

As marketers and business owners, we're always looking for "the next big idea or strategy" to maximize our business performance. Yet, the application of time-tested principles consistently achieve greater results over efforts to create newer ideas and strategies.

For example, Stephen Covey's New York Times best-selling and world-renowned book, Seven Habits of Highly Effective People is a self-proclaimed synthesis of principles taught by great teachers and philosophers over 150 years ago 1. The world-wide success of this book is evidence to the time-resistant power of principles.

In addition, many hugely successful Internet Marketers generated significant fortunes from applying 50 to 75 year old direct mail principles to the new Internet medium. Marketing strategies used by greats like Claude Hopkins, Robert Collier and John Caples have significant application in today's digital environment.

Although pay-per-click marketing is a relatively new Internet marketing strategy, its performance relates well to an old principle called "Pareto's Law" or better known as "the 80/20 Principle".

The meaning of the 80/20 Principle is best explained by a recent book, The 80/20 Principle: The Secret to Success by Achieving More with Less", written by Richard Koch:

"The 80/20 Principle states that there is an inbuilt imbalance between causes and results, inputs and outputs, and effort and reward. 80/20 relationships typically will show that 80% of outputs result from 20% of inputs; that 80% of consequences flow from 20% of causes; or that 80% of results come from 20% of effort." 2

When applied to pay-per-click marketing, 80% of outputs (or desired visitor actions on your website), result from 20% of the inputs (your keywords.)

Applying the 80/20 Principle to Pay-per-Click Marketing

One of the benefits of running a pay-per-click marketing campaign is the control gained from selecting keywords to bid on. In essence, the keywords you select enable you to target specific types of individuals among varying demographics and at various points within their buying cycle.

But because it is difficult to know specifically which keywords (inputs) will ultimately generate the most actions (outputs) the process of "keyword selection" should be applied liberally. This means that all possible keyword variations and associations should be selected to figuratively "blanket" or span across all potential search queries for your products or services. By relying on your keyword-level tracking system, over time, the resulting website actions will sort the top performing keywords from the poor-performing ones.

Under the 80/20 Principle, if you initially select 1,000 keywords for your pay-per-click marketing campaign, over a month or two depending on visitor volume, your keyword-level tracking system will uncover 20% of keywords that produce 80% of your results. Likewise, the 80/20 Principle will expose roughly 80% of the 1,000 keywords selected that produce minimal to no results.

Aside from seasonality variations and marketplace trends that effect keyword performance, the 80/20 Principle pinpoints a significant operational process that all Internet marketers should implement immediately. By tracking your pay-per-click marketing campaign at the keyword level and identifying the specific keywords that produce maximum results, you can eliminate roughly 80% of your poor-performing keywords. Through this "keyword filtration process" you will re-allocate budget dollars to the top performing keywords and reduce keyword management time spent on poor-performing ones.

Remember These 5 Keys?

1. During your keyword selection process, "blanket" your target market with every relevant keyword variation and association used by your target market to find your products or services. Use Overture or Google Adwords' editorial review to define the relevancy boundaries (or "the ends of the blanket") for your target market.

2. Define at least one value-oriented action such as an opt-in, subscription, registration or sale that you seek a visitor to perform on your website. This action (called your "marketing objective") is the determination point for measuring how your keywords are performing.

3. Implement keyword-level tracking to identify which 20% of your keywords produce 80% of your actions.

4. Pay close attention to seasonality variations and marketplace trends that may cause fluctuations in keyword performance. Instead of eliminating all 80% of your poor performing keywords, identify the most relevant ones to your products and services and the ones with the highest demand volume and work on adjusting their bids, re-writing their titles and descriptions or re-engineering their landing pages to increase their performance.

5. If branding is your primary objective as opposed to "performance" remove your brand-oriented keywords from your 80/20 Principle analysis and associated performance metrics.

Analyze your pay-per-click marketing against the 80/20 Principle to see if an imbalance exists between your inputs (keywords) and outputs (actions). You will discover that a simple revamp of your pay-per-click marketing campaign will significantly increase your visitor-to-action conversion rates, reduce your cost per action and enable a more efficient allocation of your budget across your top performing keywords.

Sources:

1 Stephen Covey, Seven Habits of Highly Effective People (New York, Simon & Schuster Inc., 1989) pg. 18.

2 Richard Koch, The 80/20 Principle: The Secret to Success by Achieving More with Less (New York: DoubleDay, 1998) pg. 4.

Kevin Gold is a Partner and Co-founder of Enhanced Concepts, Inc., which specializes in turning website visitors into leads and sales through tested website conversion strategies and performance-focused search engine marketing. To learn how to generate greater performance from your search engine marketing and to turn more website visitors into leads and sales go to http://www.enhancedconcepts.com.

---

The Google Revolution

Google is probably one of the single most important revolutions... Read More

Broad, Phrase, Exact, Negative - Four Google AdWords Terms You Must Know for Advertising Success

A few days ago, I was setting up my latest... Read More

Web Advertising: Its All About the Click Thrus!

Working in research and development for a large infomercial company,... Read More

Earning from PPC Search Engine Affiliate Programs

What are PPC Search Engines?PPC Search Engines are search engines... Read More

Keywords, How to Find Them, and Use Them Effectively

To be a successful affiliate marketer takes a ton of... Read More

How to Increase Your AdSense Revenue Stream

Google's AdSense program is one of the best, if not... Read More

Discover the Art of the Pay-per-Click Start (Round 1 of 2)

Setting up a pay-per-click campaign is simple, right? Practically all... Read More

Pay Per Click Advertising - How To Uncover Profit-Pulling Keywords And Make Your Sales Soar

Choosing to bid on the right keywords can be key... Read More

Pay Per Click Web Advertising Power Word Secrets Revealed

First impressions affect your relationship with someone for life. In... Read More

How Naming Schemes Impact Adwords Campaign Management

Improving Adwords Campaign ManagementAdwords Campaign Management - Naming SchemesKeep your... Read More

Not Sure If Your Online Advertisement is Working?

Without tracking, your online advertising is just a shot in... Read More

Get Real-time Adsense Channel Stats And Find Out Which Ads Are Being Clicked

If you have multiple sites or multiple directories in your... Read More

Managing PPC Campaigns Inhouse

Pay-per-click search engine advertising has generated ample interest in the... Read More

Picking The Right Keywords For A PPC Campaign

Running a pay-per-click advertising campaign can be very expensive if... Read More

Can I Make Money Online with the Adsense Program?

Sure you can. If you will learn how many other... Read More

Wimpy Google and Michael Jackson: Birds Of A Feather

Google Inc. is suing a Houston-based company for allegedly clicking... Read More

Affiliate Tips to Raise Your ROI - From Loser to Winner in 30 Days

"Todd" was keen to compete in one of the most... Read More

Google Sued Over Click Fraud in Adwords

On June 24, 2005, a lawsuit was filed against Google... Read More

Choosing the Right Strategy for Your Online Business: Pay for Inclusion vs Pay per Click

Back in the old days of the Internet - in... Read More

What is Google AdSense?

AdSense may be one of the fastest and easiest ways... Read More

The Fastest Way to Get Traffic to Your Site

Lots of people would like to get their Web site... Read More

Pay-Per-Click Marketing: How to Waste Your Advertising Budget

A well-oiled pay-per-click search engine campaign can land hundreds of... Read More

How To Increase Adsense Income

If you are already running Adsense on your site, you... Read More

Adsense, Boost Your Payout 400%, No Really

How?Dead easy.I implemented this tactic myself yesterday on one of... Read More

Under The Covers: ClickBanks Affiliate Tracking System

The core principle of affiliate marketing is that the referring... Read More

Wheres the Best Place to Put Google Adsense Ads?

Why, on your web pages of course. Ok, just kidding.... Read More

What is Google AdSense?

In the mid 1990's websites used to earn income by... Read More

Advertising Your Home Business With Pay Per Click Can Be Risky

An unfortunate byproduct of the pay per click advertising business... Read More

The Basics Of Pay Per Click Search Engine Advertising

Not long ago, Forbes magazine has reported that pay per... Read More

How to Quickly Create an Adsense Site That Brings In the Bucks

One of the hottest crazes for online marketers is Adsense... Read More

10 Ways To Indirectly Get To The Top Of Search Engines

There are millions of web sites trying to get listed... Read More

Top 5 Secrets to Making Money with Adsense

Did someone tell you you can make money easily with... Read More

Googles AdSense Soon To Have New Rival?

A large part of Google's multi-billion dollar annual turnover comes... Read More