WHAT PPC CAN TELL YOU ABOUT A MARKET

PPC isn't merely a tool to drive customers to your site. It is also a tool that can help you determine the true value of keywords - and the state of the market as a whole.

In this article, we're taking a close look at just one set of metrics provided by Google AdWords and what lessons you might divine from it. Hopefully, you'll get a little bit of insight into how we arrive at some of the decisions we make when managing a pay per click campaign.

Market Reality vs. Perception

Google's AdWords Keyword tool is quite nifty for keyword research. Whilst it gives away a lot less information than, say, Overture (you won't see the actual number of searches performed on Google anywhere unless you're paying for ads) you can still pick up useful information.

We're currently doing some work for a software developer. One of the things that they have asked we look into is software integration - which is one of the terms they believe describes a lot of what they do.

Google's keyword tool reveals an interesting pattern. The competition for advertising slots around that keyword is very fierce, but the search volumes are actually relatively low.

In the screenshot below, the competition is the column of green bars on the right, whilst the 'search volume' is the column of green bars on the left.

Nice Screenshot. What's it Telling Me?

One thing it isn't telling you is the number of searches, or the number of competitors who are advertising. What is does indicate is that there might be more competition than the phrases themselves warrant. Deciphering that information isn't easy.

Some potential negatives you might take from that information

• The market is saturated
  It may just reflect the fact that there are a lot of software integration companies out there. Perhaps the barriers to entry in the market are low. If so: can you make money from it or will you always be competing for low-value business in a business where fees are going down rather than up?
• The term is an 'insiders' term
  In technical markets, companies often make the mistake of assuming that their potential clients speak the same language as themselves. In this case, perhaps 'software integration' is something that immediately leaps into the head of tech companies when you ask what they do. Perhaps that's not even something that potential customers can even imagine. They might be after better sales data from their software, or how to install Outlook Express. Result? Lots of competition for a low value keyword.
• Clicks might be expensive
  Given the amount of advertiser competition, it seems likely that getting a top 3-5 slot for an ad might be quite pricey. Again, this is subjective, but looking at the context of your overall budget can help you decide whether or not buying traffic at possibly £5 a click is worth it, and whether you can offer something so compelling to turn speculative clicks into concrete enquiries. If the term is pretty vague, then the chances fall. In this case, 'software integration' might mean someone's looking for detailed technical advice - not a sales pitch - in which case your £5 is up in smoke.

Some potential positives you might take from that information

• There's no smoke without fire
  If lots of people are bidding for a term that has a relatively small search volume, it might suggest that conversions are high value. You might have to buy dozens of low value clicks (speculators) at a cost of hundreds, but a single enquiry might bring about a 6 month, £100,000 project.
• The leads are self qualifying
  It might be that people who type in these terms are highly qualified just because of the term they use. This is often true in technical markets, where specialist terms reflect specialist knowledge and needs. That normally means you have a strong opportunity to place a highly specific pitch.
• There might be a gap in the market
  By actually searching on Google for some of the terms in the list will highlight what it is that other people are trying to sell. If other companies are offering broadly comparable services, it's a great chance to differentiate yourself - either on price or service.

So How are we Using This Information?

Ah... that would be telling! But in this case, we'll probably recommend that the company look at more niche terms - referring to specific software products and platforms they can work with. We think that, for what they offer in terms of their product mix, that these kind of terms are probably going to be too broad to fit in with their budget.

As we help them to create a focussed product offering, then this picture might change.

Today's Moral

Advertising online isn't just about buying clicks and watching the numbers. It can be used as part of nuanced market research to help you develop your understanding of a marketplace - particularly where the organic results might be tilted towards noncommercial results.

If you're managing your PPC campaign yourself, or if your website marketing company can't advise you at this sort of level, then it's time to take a long hard look at what you're doing. You don't operate in a vacuum, and having a broader vision of where you sit in the marketplace can be the first step to a much better website performance.

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