The SBS Interview: Andrew Goodman

SEO is difficult enough for many small business owners. PPC? Forget it. I speak from experience: Explaining ideas like bidding on keywords, click-through rates, daily limits, and monthly budgets is no easy task. (And that was long before the phrase “Quality Score” came into play.)

But difficult or not, pay-per-click advertising is a necessity for many small businesses. For some thoughts on how small businesses can compete in an arena where budget size is a prime element of success, I recently chatted via e-mail with Andrew Goodman.

Andrew is founder and principal of Toronto-based Page Zero Media, a marketing agency which focuses on maximizing clients’ results from paid search campaigns. He’s also co-founder of Traffick.com, an award-winning industry commentary site, and author of Winning Results with Google AdWords. In other words, he knows his stuff.

MATT: I want to start with a real wide open question and see where you go with it. How can small businesses compete in the PPC arena against companies with bigger budgets and greater resources?

ANDREW: Niche targeting does work, on several levels.

First, some smaller businesses have a local focus so they are actually targeting customers that want to find them. They can tap into various promotional avenues: local search (free or inexpensive programs) from Google or Yahoo; geotargeted ads from major PPC providers, particularly Google; directories (yellow pages and related competitors) and consumer review sites.

Second, your website and your offering can in fact be unique, even if other companies are larger. Write content to speak directly to your target customer. Make the “virtual actual” by promoting a contest, promotion, special night, event, etc. Use customer testimonials. Talk about where that customer “hails from.” Localize things. Blog.

You’ll never spend as much as a larger business, but if your business is sound, you can generate a strong ROI on that small ad spend.

Should small businesses consider other PPC options beyond Google, Yahoo, and MSN?

Everyone should be looking for ways of maximizing their visibility, period. Within reason.

So, again, for a small business you should look at what local search options are available to you. Get mentioned – use P.R. Investigate community newspapers and such for ads that may appear in both online and offline versions.

That’s a lot of legwork, though. It’s OK to just figure out how you can do best with Google and Yahoo, and refine that. I think it’s generally pretty risky for the smallest businesses to place ads with the 2nd-tier paid search firms, but as my interviewer works for one of them, I’m willing to be convinced otherwise. [Ed. note: The company I work for, Marchex, owns paid search firms IndustryBrains, goClick, and Enhance Interactive.]

I was just contacted by a car dealership group. They have a lot of measurable outcomes on their site – request a quote, schedule a test drive, and more – which is great. For a company like that, I’d begin at the beginning: a geotargeted Google AdWords campaign. Low spend, high reward. They’ve already been smart enough to find a great vertical site to hook up with to place their inventory on (Auto Trader).

Any plan to seek additional channels runs into snags, at least in this case example. Yahoo’s Canada-only functionality and geotargeting (soon to be made available with the Panama platform) may not be available until March, or July.

At very small, you are stuck with legwork. At the high end of small you can justify the budget to hire a consultant, who will help shorten your learning curve and avoid mistakes. I believe any business should be reading something like my Page Zero Advisor, because it’s infrequently published. I’m hoping Danny Sullivan or others (like Matt McGee!?) may come out with an exec summary newsletter for that community that needs just the essentials. Most current offerings are too bewildering.

The recent Google/Intuit deal was aimed directly at small businesses. What do you expect the impact will be of that partnership?

I tend to see such deals as overrated. To be sure, that’ll accelerate small business uptake of Google AdWords, but it won’t literally build their campaign or make them decide to spend in this channel. Your questions do get us into a broader theme about the outdated and unmeasurable promotional techniques used by many smaller businesses. The biggest driver of business decisions to try new advertising venues is economics. If traditional media are no longer delivering the value, that’ll make it worth your while to switch. There is only so long that your “relationship” with some sales rep will matter more to you than how well the media performs.

The search vendors are trying to make it easier to use paid search programs (Google has an optional simplified console for AdWords for newbies signing up), but there are limits to this. There is a lot to be said for scale when it comes to making it worth your while to build a campaign. So, you’ve got to be a real DIY hound if you’re a small business.

There are also a few consulting firms who specialize in very small search ad buys. The struggle is how to improve service for the little guy through automation, without depersonalizing the offering completely. I know a few players trying to crack that nut.

You just mentioned Google’s newbie version of AdWords, the “Starter Edition” as they call it. What’s your gut feeling on that service, and who should be using it? Does it offer enough power to help a small business owner decide if PPC can really work?

I haven’t reviewed the service recently, but it leaves out a bunch of functionality, ostensibly to simplify the interface for newbies. The problem is, some of these features are essential to decent ROI. This is really no different than the decades of “simplified” marketing that has been sold to small business in the past: it’s telling them, give us your money, and hopefully something will happen. Why would anyone opt out of the same features their larger competitors have access to, especially when they’re free? It would be like a Yellow Pages rep saying “don’t get a dedicated phone number to track our lead performance for you – that’s too ‘complicated'”. Or the bank lender telling you: don’t shop for rates, just go with our higher one – it’ll save you time. So no, in spite of the admirable wish to “simplify” things, you don’t improve small biz ROI by patronizing people.

As long as we’re on the subject of AdWords, Google has really tied it in pretty heavily with Google Analytics. There’s a debate over letting Google own/see your web site stats. How concerned should a small business be with that?

I’ve been saying this is a collective action problem – prisoner’s dilemma if you like. There is an incentive for business as a whole to get together and say no to Google Analytics, because so much data gives Google power in general and power in certain verticals. Once most everyone has defected, however, an individual business, especially a small one, is under no particular threat from Google having access to back-end site data. The lure of the free app is strong, and I’d expect businesses to continue taking advantage of them, as they should. It’s a tough practical choice. Google’s products won’t be good enough for or appropriate to the needs of many other advertisers, so it’s not purely a pricing issue.

I haven’t had a chance to look at Yahoo’s Panama system yet. Are there any features in it that would be particularly appealing to small business?

One major improvement is that Yahoo’s new platform gets local right. The mapping is relatively intuitive, so right away, local advertisers will have a lot easier time working with Yahoo.

Just a couple final questions… Are there any bid management tools that a small business who’s very active doing PPC should consider?

I’m not sold on any solutions. This gets to be a long discussion. But basically, if you’re so hands-off that you only want some kind of automated system that will adjust your account every couple of weeks (so as to be cost effective), either (a) why can’t you just do this by logging directly into the AdWords interface and playing with it once every 2-4 weeks; (b) or then again what are you doing bothering spending in this channel at all? There are all these marketers coming on the scene now who are saying things like “I couldn’t be bothered,” and “I’m not really passionate about this.” Is that a healthy trend? To me, that just suggests you’re going to lose. You have to be passionate, and you have to be bothered. If you have a huge retail account, bid management may well be needed, for more obvious reasons of scale and automation of bidding to ROI objectives.

Let me ask about ad position. Is it always best to be in the top ad spot, or can you succeed from a lower spot on the ladder?

Always bid to top spot. Kidding. Never bid to top spot. Kidding again. Bid to ROI and brand objectives? Yes, certainly. Or when in doubt, sit in positions 3-5 and monitor how that works for you.

Can you share a quick list of PPC mistakes others have made that small business owners should be aware of?

I can lump people’s mistakes into one general category: getting emotional and not following any type of strategic plan.

Basically, you have to measure results. You will drive yourself crazy if you think you can measure performance precisely — it’s advertising, read some history for goodness’ sakes — but do measure. The “not enough leads, hit the gas,” and then the next day “do you have any idea how much these leads are costing us!!?!?!” type of inconsistency is more prevalent among small businesspeople than among large enterprise managers. Why? Of course because feasts and famines are more severe, and because overspending comes out of your own pocket. It’s understandable — but when you feel your tendency to be getting emotional about performance, try to talk through numbers over different time frames to make rational decisions.

Also, in the same vein, you need to decide if your goal is really to grow. We’ve dealt with numerous small businesses whose goal is to grow their company, until 2:30 p.m. when they suddenly have too much business, and change their minds. Did Amazon.com shut everything down at 2:30? Of course not, and that shapes consumer expectations. Again, real life hurdles are understandable, but decide in advance: are you trying to grow to the extent that you’ll need to buy more equipment, hire more employees, and buy more ads… or not? If not, then advertise at a different pace at a strong ROI, instead of going on money-losing, erratic binges followed by complete shutdown. Advertising will lead to growth. Are you ready for it? If not, take it slower – but be consistent.

Great stuff, Andrew — thanks for your time!

[tags]ppc, sem, andrew goodman, page zero media, traffick.com[/tags]