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The Importance of Separating Search and Content Pay Per Click Budgets

Apr 9, 2008
When setting up a paid search, or pay per click, campaign in a search engine, you may have the option of running your ads in search engine results pages (SERPs) or on the search engine's content network. The SERP part is obvious. It represents the core reason you run search engine ads to start with - to display your marketing message in front of people who are already searching for the type of product or service you offer. The content network part is a little more nebulous.

A search engine's content network consists of web sites that have agreed to display ads provided by the search engine's ad delivering platform. In exchange, the web site owner is paid a fee every time someone clicks on one of the ads. The particular ads that are displayed are triggered by the content on the site. For example, an advertiser bidding to have his ad displayed on content sites related to tractors, would likely bid on keywords such as "tractors" and "farm equipment." A content network site that discussed such things in its copy might trigger this advertiser's ads. It's still a "pay per click" model, and it's still sort-of targeted, but much less targeted than search engine ads.

Most search campaigns combine search and content together. Oftentimes, this is not the best strategy. Even if you set separate bids for your content ads, you should probably just separate content into its own campaign. The reason is that content is almost always much less effective than search, but it may generate just as many if not more clicks.

For instance, here is some sample data:

Click-through rate: 1.57%
Avg. cost per click: $1.71
Total cost: $261
Conversions: 20
Conversion rate: 13.10%
Cost per conversion: $13.05

Click-through rate: .05%
Avg. cost per click: $1.03
Total cost: $414
Conversions: 15
Conversion rate: 3.73%
Cost per conversion: $27.64

As you can see, the content clicks, though they cost less, convert at a MUCH lower rate, and conversions cost twice as much. Also, content clicks are consuming almost twice as much of the total budget. Now, every case is different, and it very well may be that this account is getting all of the search clicks it possibly can and must run content to generate more overall traffic and conversions.

But that may not necessarily be the case! It may also be the case that if a cap was placed on the total budget that was spent on content, then more budget would be soaked up by search, which would result in an overall increase in conversion rate and decrease in cost per conversion. But the only way to do that is to move content into its own campaign.

If content and search are running together in a single campaign, it could very well be that when the daily budget has been hit, much more of the budget was spent on less-effective content ads. If content is running in its own campaign, then it can have its own budget, so we can allocate more of our budget to search. This will have the net result of improving your return on ad spend.
About the Author
Jerry Work is president of Work Media, LLC, a pay per click management and search engine optimization firm based in Nashville.
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