Comments on: Pay Per Click Strategies http://www.bruceclay.com/blog/2007/04/pay-per-click-strategies/ SEO and Marketing Blog Sat, 20 Mar 2010 13:43:49 -0700 http://wordpress.org/?v=2.9.2 hourly 1 By: Doug Winenger http://www.bruceclay.com/blog/2007/04/pay-per-click-strategies/comment-page-1/#comment-16262 Doug Winenger Fri, 27 Apr 2007 02:54:39 +0000 http://www.bruceclay.com/blog-test/2007/04/pay-per-click-strategies/#comment-16262 <p>How many of you are Seinfeld fans? Do you remember the Soup Nazi? "No soup for you!" <br /> The patrons of the soup shop only visited for one reason, the soup! It was really, really good. They were willing to dance through all the hoops (all except Elaine of course) to get their dose of "liquid heaven". <br /> Imagine if the soup was terrible? Do you think the people would tolerate the poor service, the rules, etc? I don't think anyone would go through all that for "no return" or even a "poor return". <br /> That's why it always surprises me when people measure their paid advertising based on anything other than profit. That would be like jumping through all the hoops and not getting your soup at the end (or worse, not knowing if you got your soup or not, or, if you could have gotten more, etc). <br /> In the post above, I agree with Mike's comments regarding budget limitation. However, if at all possible, I would recommend using profit rather than ROAS to determine the success of advertising . <br /> Using ROAS, it is possible to overvalue the performance on an ad if it sold items that were below your average margin. Or, you might undervalue an ad if it sold items that were above your average profit margin.<br /> Using profit based optimization allows advertisers to target ads that are producing the most profit. This is accomplished by identifying the products sold, applying the unique profit margins for each product, and factoring in the ad cost of the ad that generated the sale. Then, advertisers can follow Mike's advice and pump their ad budgets up to maximize the profits generated!<br /><br /> PS - If you don't know who the Soup Nazi is, do a Google-search on "The Soup Nazi" and click on the "video" tab. It's classic TV!</p> <p> </p> How many of you are Seinfeld fans? Do you remember the Soup Nazi? “No soup for you!”
The patrons of the soup shop only visited for one reason, the soup! It was really, really good. They were willing to dance through all the hoops (all except Elaine of course) to get their dose of “liquid heaven”.
Imagine if the soup was terrible? Do you think the people would tolerate the poor service, the rules, etc? I don’t think anyone would go through all that for “no return” or even a “poor return”.
That’s why it always surprises me when people measure their paid advertising based on anything other than profit. That would be like jumping through all the hoops and not getting your soup at the end (or worse, not knowing if you got your soup or not, or, if you could have gotten more, etc).
In the post above, I agree with Mike’s comments regarding budget limitation. However, if at all possible, I would recommend using profit rather than ROAS to determine the success of advertising .
Using ROAS, it is possible to overvalue the performance on an ad if it sold items that were below your average margin. Or, you might undervalue an ad if it sold items that were above your average profit margin.
Using profit based optimization allows advertisers to target ads that are producing the most profit. This is accomplished by identifying the products sold, applying the unique profit margins for each product, and factoring in the ad cost of the ad that generated the sale. Then, advertisers can follow Mike’s advice and pump their ad budgets up to maximize the profits generated!

PS – If you don’t know who the Soup Nazi is, do a Google-search on “The Soup Nazi” and click on the “video” tab. It’s classic TV!

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