AdZoo, ReachLocal, AT&T, etc.

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I feel it is important for business owners to be made aware of something.  It pertains to AdZoo, ReachLocal, ATT and other companies who offer Online PPC services.  It is important to understand that while these companies can in fact drive plenty of traffic to your website and business, you have to be mindful of the fees you pay.  These companies have a very good business model but the problem is they take advantage of your lack of knowledge as to how the PPC systems work.

The idea is; if I am a company and I have my credit card on file with the search engine, I then bill the Client directly.  I pay certain CPC’s and I can then tell the client a marked up cost.  At the beginning this might not be so bad.  You are essentially paying your maintenance fees through your mark up.  Again, this is understandable.

But there are a few problems with this business model for the client:

Cost Per Clicks:
Most search engines rank your ads and charge certain costs per click based on the Quality Score of your account, keywords, etc.  When you begin a campaign with these companies, they will tell you that your CPC will be a certain amount (lets say $1.00 for this example).  That very well might be the case.  However, as your campaign runs, as it gains good performance history (high CTR, good conversion numbers,  etc), that CPC should begin to decrease.  That $1.00 CPC could come down to .90 .80 .70 or even lower.
So: As CPC’s decrease to the agency, they do not extend that decrease to you as an advertiser/client

CPC’s Continued:
Actual CPC prices differ per Keyword.  It is also important to know that each keyword has a separate CPC and additionally every time you receive a click, you might pay a different CPC.  Depending on the time of day, your geo location, the amount of competition as well as other factors, your CPC’s will vary.
So: You are not made aware of this by these agency and once again, while they begin to see decreases in click costs, you do not.

Keyword Lists:
When advertising with many of these companies, you will be given a Keyword List to review.  These are all the Keywords that the company plans to use to advertise your business and capture clicks and traffic to your website.  The problem is that these lists are often very limited, short sighted, and DO NOT CHANGE.  It is extremely important to update your list as your account runs.  Removing under-performing KW’s (those that generate high costs and low or no conversions), as well as adding KW’s (based on other Keywords that are successful or pages/products that begin selling well on your site), are very important steps in making sure your account is performing at an optimal level and that you are getting the best ROI.
So: KW lists need to be changed and updated as you gather performance data

Forcing Traffic (and lack of quality of traffic):
Since you have a set monthly budget with these agencies they are going to do their best to make you reach that budget.  The problem is that with the aforementioned short sighted keyword lists, and eventual decrease in CPC’s, it may become difficult for them to get you enough traffic to reach that budget.  In order to get you that traffic they may place your ads on lower quality websites, push lower quality keywords, etc. 100 Quality visitors could be as beneficial as a 1000 less Quality visitors.
So: Why spend money advertising to someone who is not interested in purchasing your service or advertise keywords that while they may draw more traffic are less likely to lead to a sale.  Additionally, you may see more traffic for keywords that are lower Profit Margin items.  Spend more on the items that make you more.

Account Ownership
This is one of the MOST IMPORTANT things to be aware of.  When you run an account with these agencies, the accounts are in THEIR name.  They own the account.  If and when you decide to cease advertising with them, they maintain ownership of that account.  All performance histories and Quality Scores associated with the account are non transferable to other accounts.  As previously mentioned, as your account runs, you should begin to see lower CPCs.  However if you leave these agencies and want to continue advertising on your own, you will start over and will see your CPC’s return to their starting point.
So: having ownership of your account is of the utmost importance.

I hope this information was useful.  When we explain this information to clients who have been working with these agencies, they are often very quick to terminate their contracts with those companies and either work with us or work on their own.  Our business model for PPC advertising is much simpler and more honest.  The account is created in the client’s name, with the client’s credit card on file.  Our fees are simple, straight forward, monthly maintenance fees.  You have full access to your account and can see your costs direct from the search engine.  We work hard to make sure that your Keyword list is constantly updated and optimized.  We make sure that your CPC’s are set at the right levels and that your ROI meets your demands.

This entry was posted in Advertising Agencies, Cost Per Click (CPC), Featured, Google AdWords, Return on Investment (ROI), Yellowbook. Bookmark the permalink.

One Response to AdZoo, ReachLocal, AT&T, etc.

  1. Pingback: Yellowbook?…. more like YellowCrook! | SEO | Website Design