After a recent experience with a (3rd party/agency) PPC vendor that specializes in product-level ad campaigns, I can share some observations about these services.
Product-level ads mean automatically generating long-tail keywords and corresponding ads with links to those product pages. Because when there are 10’s of items (perhaps thousands) or there is high inventory turn-over, this job is not something a human can keep on top of. Thus the 3rd party that specializes in this sort of thing, with black-box tech of course.
Black-box or Mechanical Turk?
Automated PPC services are typically two services packaged together that should be analyzed separately. There is keyword & ad generation. There is also campaign management. It turns out, the later is the really tricky part.
So we look at efficacy – can the “black-box” do what it claims to do? (turn inventory pages into ads with long-tail keywords) In that narrow description, it appears so, but the human-to-black-box interface presented obstacles.
There is a lot more mechanical-turk going on at the campaign management layer than is admitted. That means there is a human behind the black-box doing a percentage of the work. This was the first area of dissatisfaction as the “magic” required a human being with “expert” skills (the mechanical-turk) at PPC campaign management. Then we found the application layer between the black-box and the mechanical-turk prevented certain fine-tuning – tuning we would have done ourselves except the application would not accommodate our tuning. We were left knowing what to do to get better results, but unable to put those changes into effect.
Cost of these services is a critical consideration. A greatly improved ROI cannot be guaranteed when the service costs between $600 to an unlimited (thousands) per month fee. A basic campaign of short-tail keywords can work just fine if one has an unlimited budget, so we only consider implementing a complex service such as this in order to sell more products. Right?
So our quest for a better ROI by using long-tail keyword, more relevant ads and deep links to our inventory comes down to selling more products for the same or a lower cost of advertising.
Remember that click-share is only a matter of the overall budget, whether it goes to long or short-tail keywords. We can always spend more money to get more market-share irregardless of “method” to get it. So we need to see significant increases in conversions = increase in ROI if we are to justify another layer of agency-service.
I cannot easily publish numbers here without revealing sources, so suffice to say, the devil is in the details. In our case, while the increases in CTR and ad position improved, we found the service to be a bit too expensive because we did not see an increase in sales.