One of the best pieces of advice I ever got from a seasoned Google AdWords mentor was to “not try and serve two masters within a single campaign.” If your campaigns are like most, they have a fixed budget and are ROI driven. In this situation, we are constantly trying to ratchet down the cost per lead while still using up the budget to get as many leads as possible. But beware! At some point you can almost be guaranteed that you’ll be requested to “fill up the pipe” by ramping up volume (and spend) for the short term. Unfortunately, trying to jockey between the two is a recipe for long-term frustration and compromised results.
This may seem trivial to many, especially at the outset of a campaign when everything is new, shiny, and exciting. But as I and my clients have learned, as a campaign matures — and you are looking to improve upon current and past results — that lingering question once again rears its head. ROI or volume? It’s very hard to run disciplined, scientific campaign tests and optimizations if that question isn’t clearly answered and adhered to.
A Practical Example
Case in point, a niche player in the crowded web-based CRM space relies on Google AdWords for a good percentage of their inbound lead flow. The client is primarily interested in volume of leads within a reasonable cost per lead (which fluctuates based on the health of the pipeline). For instance, one month he may get 100 legitimate sales leads at an average cost of $50 per lead.
The person running the search campaign begins implementing tactics necessary to bring the overall cost per lead down (improve ROI). Things like:
- Pausing or bidding down on phrases that aren’t converting
- Pausing or bidding down on times of day that aren’t converting as well
- Changing the days of the week that ads are shown
- Restructuring campaigns to improve performance
Methodically, over time, the cost per lead goes down significantly and they can get more leads with the budget. Mission accomplished right? Not so fast.
The phone rings. It’s the VP of Sales. “What the heck happened to my leads? They are way down!” And the search marketer replies, “But we’ve lowered the cost per lead from $50 to $30.” To which the VP quickly snaps back, “Just get us more leads!”
It’s easy to just cave and turn up the dials to satisfy the demand. But that still, quiet voice in us wants to push back and do what we know is the “right” thing for the long term health of the campaign.
As a dear client/mentor of mine once said, “Todd, you need to learn, the ‘right’ thing to do, isn’t always the thing that gets done in a corporate setting.” In other words, even though we would like to believe (and sometimes are even told by the boss) “it’s all about ROI,” often times it’s simply about filling the funnel.
I know for a lot of veteran sales and marketing executives this paradox is nothing new. It isn’t specific to the Internet. But for those readers who may be climbing up the business ladder coming from the search marketing side of things, I wanted you to know you are not alone in facing this issue! So what can we do about it?
The Easy Fix In The Perfect World
The easiest solution of course is to force all stakeholders to agree to stick to one goal or the other. You’ve got to try and be steadfast. Stick to your guns, Kimosabe. When we jump between the two goals we inevitably end up paying a “stupid tax” that more disciplined campaign managers seem to be exempt from.
Meanwhile, In the Real World
Unfortunately, we know that even in ROI driven campaigns, you will probably need to ramp up the volume/spend any way in the short term to appease the boss/client. Still, remember and try and explain to the client:
In a fixed budget environment, a temporary ramp up in spend will undoubtedly cause your total lead volume for the month to decline and the cost per lead to increase.
I’ve provided a link to a spreadsheet that illustrates this concept.