Tuesday, 12 October 2010

Concerning Fixed Rate Managed Services

We often see questions about companies who offer a simple, monthly fee based Adwords service. Such companies typically offer a number of keywords, a 'guaranteed' position in the ad rankings, and may offer a 'guaranteed' number of clicks. Their approach is attractive to potential advertisers because it's a quick and easy route to Adwords advertising, but are they any good?

Straight away, I want to make it clear that I have no reason to believe any such company is actually 'scamming' or 'cheating' their customers. The issue is not whether there is anything immoral about such services but whether the product they offer is actually worthwhile and offering good value for money.

To understand this question we'll need to look at the service being offered. While such companies may vary, typically their service will consist of one or more of the following features:

  • A fixed set of popular keywords (often around 10 - 12)
  • A 'guaranteed' position
  • A fixed monthly fee

The key problem I have with this approach is that it is very difficult - perhaps even impossible - for an inexperienced customer to judge the results of such a service. Let's say you sign up and pay $300 a month. The company creates your keyword list and fulfills all their promises and your site receives 200 clicks a month. Out of those 200 clicks you make enough sales to cover your $300 and make $100 profit. So, you're quite happy.

However, you as an end-user, divorced from the actual account/campaign, really have no idea whether these figures represent effective performance. It may be that a well structured, managed campaign should return $900 in sales, not $400. You'll carry on earning $100 a month for a long time without ever realising that it could be far more.

You'll note that I haven't actually suggested that a well-run campaign will return more clicks. That's because Adwords isn't just about the number of clicks, it's all about the sales from those clicks, the conversion rate. The well-managed campaign may be able to generate $900 in sales from only 150 clicks, not 200, if the campaign structure ensures that the keywords are more relevant, the ad copy more enticing and the bid structure more appropriate.

Yes, a company offering a fixed fee, fixed keyword list may well employ decent Adwords users who can make a good attempt at creating a decent start to your campaign, but I doubt (strongly) that any will offer the sort of week on week, month on month, analysis and review that creates a truly cost-effective and efficient account.

Adwords is not a simple and easy product to use. To get the very best performance takes learning, effort and frequent management and review. It does not, in my opinion, suit a 'one-size-fits-all' approach and I can only recommend that anyone considering using a company as described above should think very carefully before signing on any dotted lines.

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