• by Bryan Wiener , June 27, 2006

Targeted creative, though labor-intensive, pays rich click-through dividends

One of the best-kept secrets of search engine marketing is that great creative can lower marketers' costs. There are only three ways to increase the click-through rates of paid search ads running on any given search engine. One is simply to increase the bid  a reliable strategy, but not necessary a profitable one. Another is to improve the creative to make it more action-oriented or relevant. Lastly, a marketer can increase rankings in the natural search results, leading to higher click-through rates by reinforcing the brand's presence in natural and paid results.

Given the amount of attention that bid prices receive, and given the extensive business of natural search optimization, it is surprising how little attention is paid to optimizing the creative.

Studying the creative in the context of the bid price is especially important because of how the major engines rank search ads. Google AdWords ranks ads based on both the bid price and the ranking. Yahoo announced in May that it will factor search ads' performance into its rankings; this is slated to go live in the U.S. with Yahoo's new ad platform later this year.

One way to evaluate the creative is to view it in context: There's an interaction effect between the targeting of the campaign and the type of copy. Consider a matrix with two degrees of targeting (broad and exact) and two types of copy (general and specific). These ads interact in the context of a search engine where the ad's click-through rate affects the bid price.

With broad targeting and general creative, the creative is de-signed for maximum reach and mass appeal, such as with a free offer or another promotion. If the campaign is successful, searchers will respond to the promotion, click rates will rise, and marketers can maintain their search ad ranking with lower bids. The downside is that total campaign cost will increase and conversion rates will be relatively low, compared with a more highly targeted campaign.

With broad targeting and specific creative, the creative is too targeted for the high volume of searches conducted. Most searchers won't be interested, though the small percentage that are will be highly likely to convert. Still, low click-through rates mean that bid prices need to rise to maintain visibility. There is a tradeoff here, as the high conversion rate could offset the higher bid price.

With exact targeting and general creative, the creative isn't as relevant for searchers with de-fined needs. Searchers pass on the ad, click rates drop, and bid prices need to rise to maintain the ad ranking. Using general creative with targeted ads is far too common a practice, despite the damage it can cause to a campaign.

But with exact targeting and specific creative, the creative matches the need of the searcher. Searchers relish the relevance, click-through rates soar, and bid prices can drop significantly. Conversion rates should also be strong. It is very labor-intensive, so a cost-benefit analysis needs to be done before such a campaign.

Gaining prime positioning with the search ad can lead to other benefits, such as the power of incumbency. A top-ranked ad will have the highest click-through rate. As its average rate keeps climbing, the bid price needed to maintain that position gradually drops. Any new competitor will need to overbid to leapfrog your high ranking. Strong, targeted creative can prevent outbidding by even deep-pocketed marketers.

There is no universally perfect strategy, as marketers must weigh decisions based on many factors. What's most important is that marketers develop a coherent creative strategy for their entire search marketing campaign.

Bryan Wiener is president of 360i, a search-focused agency. (bryan.wiener@360i.com)