Warning: your paid search campaign may be defective

With customer acquisition central to almost every marketing strategy, it’s hardly surprising that marketing advice is teeming with formulas to optimise paid search advertising campaigns. It’s an important conversation to have. The average PPC campaign produces all of its sales from just 12% of keywords[1] – to be clear, that means that 88% of search terms may be going to waste!

This would be cause for alarm even in ‘normal’ times, but the pandemic has tightened budgets and made financial planning more important than ever before. In 2020, 8.37 billion pounds were spent on search advertising in the United Kingdom,[2] so minimising wastage could produce significant cost savings.

In the financial services sector, fierce competition pushes search advertising costs higher than for other industries. Across all industries*, the average cost per click in Google AdWords is approximately £1.95, while the finance and insurance sector pays an average of approximately £2.50.[3] However, smart investment has the potential to produce significant rewards, since conversion rates are also higher (5.1%) for the finance industry compared to the general average of 3.75%.[4]

The issue is that as many as 42.3% of account managers have no conversion tracking system in place to indicate whether their campaign is running efficiently or not, and therefore may not be seeing a full return on investment.[5] Good tracking enables refinement of paid search strategies and therefore better results; for accounts with good conversion tracking, only 15.2% have a conversion rate of less than 1%.

At Go Inspire, we conducted a series of trials to find out exactly the level of savings that could be obtained by taking a different approach to paid search campaigns. Our findings conservatively show that UK businesses could be saving £728.7 million of their paid search budget,[6] with £88.2 million of potential savings in the financial services sector.

Unlocking paid search savings and optimising strategies

So how can businesses unlock these savings? Beyond measures such as refining keywords, there needs to be a more sophisticated approach to PPC marketing. A common defect in paid search campaigns is that they tend to view all members of a target audience as one and the same. If each click is presumed to be a net new customer, a multitude of opportunities may be lost from customers who already have a relationship with a brand, and should be receiving differentiated messaging. In an offline setting, company representatives are likely to ask customers many questions before suggesting a financial product – this personalisation should not be completely absent in online advertising.

A sophisticated campaign will consider the stages of the purchasing journey where customers are most likely to be responsive to paid search advertising. To achieve this, businesses must first build a picture of customer journeys and triggers, specific to their client base. The more holistic the understanding of the customer, the better – so combining offline and online data is invaluable to produce a comprehensive overview of all customer touchpoints in their journey to purchase, referred to as a 360-degree view. Only 10% of companies have this 360-degree view of their customers[7] – though there are numerous tools available to achieve this – and the rest are missing out on the ROI benefits of the greater visibility, differentiation and control that this view provides.

For instance, understanding the customer’s intent prevents remarketing messages being lost on a customer that has already purchased or moved to the next stage in the customer journey. Delivering remarketing messages to phantoms – those customers who visit a page through accidental clicks or misdirected searching – is likely to make click-through rates drop and cost-per-click rates rise. Similarly, companies may be wasting their budgets by bidding their name to customers who were already searching for their company organically and would have clicked through to their website through the organic search result. The paid search advert is particularly effective when a customer is lapsed or seeking a competitor – this is when it is worthwhile to try and recapture their attention.

Keeping paid search campaigns fresh

Marketers are often aware that some of their paid search advertising budget is going to waste, but  may struggle to identify where the waste is happening and how to prevent it. This is especially critical for the financial service sector. Not only are rates higher, but businesses in the sector must also contend with tighter regulatory constraints and a lack of trust from consumers.[8] Wasting or misusing marketing opportunities may be particularly detrimental. As customer behaviours continue to evolve in line with a fast-changing world climate, marketers will need to continue to review and reassess their customer segments and journeys and revise their paid search strategies and messaging accordingly. To achieve this, insights gleaned from intelligent analysis of customer data is the key, and this should be the starting point for marketers.

*The data is reflective of a sample of US-based accounts.

[1] Digital Marketing Institute, 5 Reasons PPC Campaigns Fail (And How To Avoid Them!), 16 February 2016

[2] Statistica, Search advertising spending in the United Kingdom (UK) in 2019 and 2020: https://www.statista.com/statistics/293943/search-engine-advertising-expenditure-in-the-united-kingdom/

[3] WordStream, Google Ads Benchmarks for YOUR Industry [Updated!], 23 April 2021: https://www.wordstream.com/blog/ws/2016/02/29/google-adwords-industry-benchmarks

[4] Ibid

[5] Disruptive Advertising, Why Google Ads Accounts Succeed and Fail, March 2020: https://disruptiveadvertising.com/adwords/2000-adwords-audits/

[6] Go Inspire, Which Bit’s Not Working: An Estimate of Current Wastage Rates On Paid Search Advertising: https://www.goinspire.co.uk/whitepapers/which-bits-not-working/

[7] SuperOffice, HOW A 360-DEGREE CUSTOMER VIEW WILL HELP YOU GROW YOUR BUSINESS, 8th February 2021: https://www.superoffice.com/blog/360-degree-overview/

[8] The Drum, Five common digital marketing problems for the finance sector - and how to overcome them, 15 February 2019