How to Lose Money on Paid Search Advertising

How to lose Money on Paid Advertisement - PPC - SEO |

Not finding a mistake like this can really hurt...

I have wanted to write this article for quite some time.  It just seems there’s not enough time in the day to get to all the little “want to do’s” lists that I have.  However, I finally have a minute to sit down and bang this one out, so here it goes.   It’s an important topic and one that is all too often overlooked by Internet Marketing professionals (both in-house marketers and agencies).  It’s a serious problem that most often results in finger pointing once found.  The in-house manager says the agency should have caught it and the agency will most likely state that the company reviewed and approved all keywords before launching a campaign.  In the end, no matter how it happens, it’s still a BIG, expensive problem in some cases and one of my biggest pet peeves in the search engine marketing world.  The truth is, they both (in-house management and professional SEO Services agency), have an obligation to prevent things like this from happening, even more so if it’s done entirely in-house!  The issue is having Paid results come back for the same term that already ranks #1 organically, when results come back like this:

How to Lose Money on Paid Search - ZAPPOS |

Note the results.  The search term was “Zappos”.  Now don’t get me wrong, I have a whole lot of respect for Tony Hsieh and his team over there at Zappos.   They have truly built a wonderful thing with an innovative, unique and truly effective customer service business model.  But to be honest, with all the brain power over there how was this missed?  Look at the results again.  The search term “Zappos” returned the “Top Organic” result and then the “Paid Search Box” also shows Zappos.  Call me silly, but I’ll bet you anything this oversight is costing Zappos a pretty penny every month on their Google Adwords account.  In fact, let’s look at a quick analysis from on the term search term “Zappos”.  SPYFU is a well-known and search industry recognized resource for internet marketers for SEO and Paid Search marketing data.  Note the estimated daily clicks and cost for this term:

Zappos Paid Search Mistake - SPYFU |

Now if we are to believe these numbers, and trust me when I say they can be deadly accurate, then the total monthly cost for this little over sight could be costing Zappos  as much as $99,300.00 each month!  Maybe Zappos can afford that considering annual revenues at just over a billion dollars at this point and further, some might say that having the top two spots on Google (i.e. more page one real estate) is worth the cost.  Some people would also argue that certain users will ONLY click on paid search results for various reasons (trust, ignorance of the search results page, etc.).  All of these might be viable arguments for a smaller company, but how many people that actually search for the term “Zappos” are not going to click on the top organic result just because a paid result is not shown?  I’m guessing very little, if any, loss in traffic if this one term was dropped from the PPC campaign, yet the monies saved by this simple move could then be spent on other more effective terms that don’t show up as the first organic result and yield even more buying visitors to the site.  I hope at some point, internet marketers wake up and realize that top paid and organic search results are not needed at the same time for MOST instances.

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  1. George P.

    Another great article Mike! Thanks for sharing.

    I have a quick question though. How do you suppose something like this happens with such a large company? I would think this would have been caught before now.

    Thanks again for writing this blog. I always look forward to your posts because I always learn something new.

    • Hi George! Thanks for th reading and the very kind words!

      I think somehting like this happens because all to often Internet Marketing Pros get into a routine. It was probably routine to add the name of the company into the Adwords campaigne because well, for a new website that is pretty common. The mistake IMHO was not realizing when they could take it out and just live with the organic search results. I’m guessing about 5-6 years ago easily…if not longer!

      Thanks again for reading and the comment!

      • Mike, great article and great reads on your website.

        With branded campaigns, I think companies run these types of campaigns to reach out to those users who click on ads regardless of what organic listings are there. I believe some are programmed to want to click on those bold ads. Now the real question is why?

        I have seen that many people who have seen our ads will continue to click on only the ads in the future after first seeing it. If you search for “running shoes” and see a brand that you are slightly familiar with within the ads at the top, you might come back and search “brand running shoes”. Brand being whatever the company is. If you didn’t have the “running shoes” campaign running at that time, then the branded campaign would pick up. However, if they searched “brand running shoes” but couldn’t find your ad.. and there was another ad there advertising for 20% off, you might lose your business just because you didn’t have branded campaigns up.

        With that, the low cost of branded campaigns is why I think they could be running regardless. Misspellings, confusion of how to find a brand online, and other competitors using variations of your brand as targeted keywords are why I still believe branded campaigns exist.

        I’d love to hear your thoughts! Visit my site, find my email address and hit me up!

  2. Marie Smith

    I have never heard of SPYFU before reading this post. I checked them and they seem legit. Can you tell me if there is any reason why I should not just use them for 100% of my research? Do you use them exclusively? If not what else do you use?

    Thanks for writing this article. I learned something new.

    • Hi Marie – Thanks for reading and taking the time to comment.

      I use a varitey of Keyword research tools. I use Google Adwords and SPYFU primarily though. I would never use either of these (or any other service) exclusively though. It’s always better to way your sources and use an average in my opinion. No one is 100% accurate when it come to predicting traffic IMHO.

  3. Seems like PPC should have the option to be setup with an algorithm that will not show the PPC if the organic result is even on the page.

    • Now that’s a good idea. I don’t know if Google will ever implement that though. I’m guessing they are making a pretty penny off of mistakes like this one from the larger corporate customers that spend 6 figures (or more) on paid search advertising.

      Great way to think about it though Ken!

  4. Katelin Hansen

    Good day there administrator, I actually wished to place a quick comment to say that in fact I liked your article very much. Thanks!

  5. Nice color choice on the blog. It is really easy on my eyes and I have bad eyes too so that’s a really big compliment lol
    Welcome to my blogger investment advisor.

  6. Yes!! You’ve done it again Mike! Thanks … currently trying to find evidence, thoughts, posts, arguments for and against PPC on your own brand – this post sums up perfectly about using PPC when you rank organically (effectively very similar circumstances)

    Id love to find out some more stats on the split of PPC /Organic clicks by demographic, industry, location etc to get a real insight in to the behaviours if you can recommend anywhere??

    Currently we spend 35% of our monthly PPC budget on our brand name (or various terms surrounding it) and i think we could be saving money but dont want to risk losing a big chunk of traffic (and ££££) . Common sense would say why pay for something you can get for free but most articles ive looked at scream why you should PPC your own brand – I need some looking at it from the other angle! If you can help?

    Thanks again
    Michael recently posted..mprice14: RT @TheRealSkibz: When David Beckham scored for England, all the kids wanted Beckham haircuts.

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  7. Michael – Thanks for reading and the comment!

    There is scare little statistics available on this optic. We are in the process of gathering data that our current clients are using, but it is not a controlled data set at all. I am not sure if anyone has done that or not. Maybe it deserves a little more research….

    My general rule of thumb is I always recommend that a client avoid using their Brand Name in the PPC Adwords Campaign. If someone is searching for “Zappos” then they are going to click on the natural link for “Zappos” just as quickly as a Paid link because they are already looking for Zappos.

    Now if they were looking for shoes, one could argue lost money if a paid link and natural link both brought traffic and that a competitor would seem to “outrank” Zappos, especially since Google has lightened the shade of the box so of Paid links that it’s almost non-existant.

    Another post to follow once we gather some more data (or find some)
    Mike Glover recently posted..Does SEO Still Work After the Penguin and Panda Updates?My Profile

  8. Hi there! I know this is kinda off topic but I was wondering which blog platform are you using for this site? I’m getting tired of WordPress because I’ve had issues with hackers and I’m looking at alternatives for another platform. I would be great if you could point me in the direction of a good platform.

  9. Nicely written but there’s a tonne of data to show that both is better… that more SERP real estate through paid and unpaid is better for the bottom line regardless of high organic rankings. Some people just do click on the first listing whether it’s an ad or not, and if you’re not bidding and spending on that ad then that click goes to a competitor. Even with no competition bidding (which is rare) then still often the organic listings aren’t top of the page, and even when they are the ranking isn’t guaranteed to stay… or rank for all others, what with personalised search, different data centres, geo factors, etc… plus the old issue of never relying on one channel, always try to ensure a healthy split in GA between a number of channels.

  10. George Coem

    Pitty SpyFu legs behind in number of databases and their updates. I had to stop using it when our business started growing. It’s good that you focus on US and UK, but that’s not even close to what others got. Serpstat’s got like 10 databases, 4 of which I use to check competitors for our dropshipping busines and 2 extra for content to test the waters in new areas. Guys add more databases!