Our Pay-Per-Click Marketing five-part blog series distills the EducationDynamics approach to Paid Search. These are the practices that put us consistently #1 in Auction Insights for EDU. You might like some concepts and you may disagree with some. Either way, this overview will help demystify PPC for you, and aid in making better decisions with your media spend moving forward.
To dig in deeper on each topic in our five sections you can download the full ebook here.
Part One: Align Interests
You’re a marketing decision maker at a school. You want to buy a lead and thus find a lead aggregator, call center, or other publisher and strike a deal. The deal costs $50 per lead and you have a budget of $10,000. At the end of the term, you expect 200 leads.
What does 200 leads mean in this context? Do you need to fill a particular number of seats with students? You might enroll four students from these 200, which is well above average. In some universe, you might even enroll 200! (Though not at all likely.) But even if you enroll zero students, your partner did what you paid them for: They delivered you leads.
All of us in the education marketing industry have had this experience. You pay good money but obtain a disappointing number of actual, paying, enrolled students (maybe as few as zero). There are lots of reasons this might happen, which we’ll discuss in a series of five posts, but it’s important to understand that the incentives between you and your partner are not always 100% aligned. They’re only aligned in the sense that if your partner does not deliver you a minimum level of something, you might not come back. But since you pay for leads rather than students, it can’t be a surprise when they sell you leads.
Let’s look at this from another angle that might also be familiar to you.
You’re targeting 200 leads with an Agency, and you have $10,000 to spend. It’s up to the Agency to get you the leads. You’ll pay them a 15% management fee.
Now imagine the Agency has a whiz kid Google expert and acquires your 200 leads using the first $1,000 only. Whiz kid and her Agency stand to make $150 for their troubles.
What would you do in their spot?
Think for a moment of the assignment you gave your Agency and how you defined their activities. They have a backstop (maybe) of 200 leads, but you incentivized them to spend your money rather than make you money.
An in-house PPC person will stop spending at the $1,000, or go back to the CMO or other decision maker for further instruction. But any literate media buyer in any Agency in all the land will spend your next $9,000. Because that’s how they make money.
And you know what? At the end of the term, you will have spent the $10,000 you budgeted and gotten the 200 leads you were looking. In fact, you probably acquired even more than the 200, assuming the subsequent $9,000 was not completely wasted. You might be perfectly happy.
Still, your interests were not aligned or advocated for in this example.
It can be more beneficial to approach working with Google as a triangle of interests. We want to earn as many leads for our clients and as cost efficiently as possible. Our team works best with Google by addressing what the other two points on the triangle want. That way we can align our activities and work toward everyone’s interest.
- Third party lead generator: Wants the most leads, the most cost-effectively
- Searcher: Wants something specific (indicated by their search query)
- Google: Wants two things: 1) maximum revenue yield, and 2) to satisfy the Searcher
You may have heard such things as, “Google just wants to get the highest CPC they can”. This translates to “Google is trying to get the most revenue for each click” [CPC=cost per click]. Statements like this are not accurate or particularly useful when trying to make the best possible decisions.
Google offers exceptional service, in the sense that more of us want to buy on it than there are available slots. Simple fairness thus dictates that they’re entitled to the best price they can get for those slots. But what they really care about in the long term is that people, actual humans, keep using their service. If humans don’t keep using their service, and instead keep clicking the paid listings we’re talking about buying right now, their entire business model goes poof.
So, they don’t really care about the highest CPC per se; it just turns out that advertisers pay the most because they don’t understand the system and Google’s incentive.
This is the Ad Rank formula:
Ad Rank = Quality Score x Max CPC
Ad Rank determines both which advertisers get ad slots, and the order they appear.
To find out more about how we align interests between Google, our clients, and their potential pool of student enrollments, you can download our full PPC ebook here.