Working with your Pay Per Click Management Firm 
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Posted by: Scott: Thursday, June 1st, 2006 | 
Question: How do you set goals when working with your pay per click marketing firm? How do you position yourself for success?
My answer: First, it is helpful to understand the nature of the products and/or services being sold. What kind of margins do you have? What is the revenue opportunity? Do people tend to place repeat orders? It’s important to figure out what, on average, you can afford to pay to bring a sale in through pay per click in a profitable way. It is also important to understand the competitive landscape intimately.
So, let’s say you’re a retailer selling widgets, and your average sale is $100, and your profit margin is 50%. Would it be profitable to pay 20% of that amount in total marketing fees? All things equal: Yes. That may not be optimal, but it may be acceptable.
Start by setting a goal for what you are willing to pay for a sale or lead, and monitor reports to see if you are progressing towards that goal. Month 1 may not be close to that goal, but if month 2 and 3 get closer, you are moving in the right direction. Some times pay per click campaigns perform well from the beginning, and other times they take time to get going. Just make sure you are heading in the right direction.
Also, be clear about what kind of feedback you are looking for. The best firm in the world will not ALWAYS make pay per click work for you. If your website does not convert traffic into sales efficiently, for example, it may be worth talking to them about what you could do to improve conversions. A good pay per click management firm will have the resources required to improve the performance of your website, not just your ad campaigns.
In my experience, the key is being open and honest with the firm. If you are happy, tell them. If you are not happy, tell them that too, and set very specific objectives. Let them know what success looks like to you. Give them the license to be creative, to take risks, and to give you blunt feedback. Treat them like a partner and if they are good, they will act like a partner.
