Episode Four: Life Science AdWords and SEM Secrets

When done right, the results from paid advertising can be incredible, especially because most people in the life science space do it wrong. When paid advertising is done wrong, it can be one of the most costly investments with virtually zero measurable ROI. In this episode, we tell you the differences in advertising on major networks like Google AdWords, Facebook, and LinkedIn.

This episode includes:

  • When you should use Linkedin, Facebook, and Google AdWords
  • The most effective strategies on different ad networks
  • How you should be measuring and thinking about conversions
  • How to know when a campaign is performing well

Resources mentioned in this episode:

  • Perry Marshall – Ultimate Guide to AdWords and Facebook
  • Ezra Firestone: Traffic MBA for e-commerce
  • MOAT.com

What’s coming next:

  • Life Science AdWords Secrets feat. Eric Southwell, AdWords Specialist

Transcription:

Sheldon:

Hello everyone. Welcome to Episode 4 of The Life Science Marketing Lab with your host, myself, Sheldon Zhai. I’m the founder and CEO of Supreme Optimization, the first data marketing agency exclusively for life science companies. On here, I have Leigh Wasson as well.

Leigh:

Hey guys, Leigh Wasson here. I’m the Chief Marketing Officer for Supreme.

Sheldon:

Cool. Today, what we’re going to be talking about is a bit more about paid traffic and one of the most common channels, in particular, is AdWords. Some of the previous episodes we’ve talked a little bit about traffic, conversation, list building, and … Actually, the four elements of digital marketing, in general, are traffic, conversation, list building, and the following. We’ve already talked a bit about traffic and a bit about conversion, as seen in previous episodes, but on this one in particular, we’re going to dive a little bit deeper into the pin drop.

I’ve been getting some great responses over the past couple of episodes. A lot of people have been asking us a lot of questions or they have on what’s going on with their current campaigns. Today, we would actually just like to … We’ve compiled some of the questions. We’d just like to go over some of them with you.

Keep in mind, if you do have any other questions are you’re listening to this podcast, you can always feel free to comment directly. If you’re visiting our website and found this podcast through our website, there’s a comment section. Leave your comments, we do read them or if you are leaving comments on LinkedIn or some other channels that we’re sharing the podcast, just be sure to comment. We promise we’ll be seeing it and we’ll be adding it to our list of questions. Alright, Leigh. I think you have some questions so we’re going to take it away.

Leigh:

Yeah. For sure. Before we dive into some of the specific questions, maybe we should just talk about the main differences. If we’re talking about organic traffic versus paid traffic. What would you say are the main differences and some of the pros and cons of paid traffic, specifically?

Sheldon:

Okay. Yeah. That’s a good question.

I’d say … First of all, when we say organic traffic, that just means your ranking naturally on the top of Google, hopefully. If you are clicking and find you directly through that channel. Inter-traffic is something that, a lot of times if you … It’s something that’s faster. I’d say SEO and organic traffic is more like a long term play. You probably won’t see results for the first few months. Whereas, paid advertising, you can get your campaign set up in about a week or two, LinkedIn, Facebook, AdWords, if you have an expert, they can probably get a good campaign set up as an initial pilot run. Your ads will start showing up for the viewers that you’re targeting. This can be really effective and advantageous to organic traffic for a few reasons.

Number one is, if you have some sort of first to market advantage, maybe you don’t have the time to afford to wait to start making an impact in the market. Maybe you need to just show up but as soon as possible before competitors start taking that market share. Of course, you’re going to buy traffic.

Some other things is sometimes you have some highly competitive keywords in your company that might take you maybe … Honestly, maybe eight months. Maybe a year to rank on the first page in a good position for some key words. You do have the budget, so … Then, you can invest in paid so you can invest in there.

Those are probably some of the key advantages is just speed the system results versus organic. Was there anything you wanted to add to that?

Leigh:

Yeah. Speed is a huge one. That ties into scalability, too. With SEO, like I said, it’s a longer play game. With paid traffic, you really have to know your numbers but once you do, it’s kind of like the key to unlock hockey stick type growth, right? You can flood your website with traffic and if you know it’s converting and it’s converting profitably, you can just really turn on the faucet. That being said, that’s kind of the holy grail of hitting that, right?

The opposite is that because you’re paying per click, you can also waste a ton of money really, really fast. It’s definitely a higher stakes game, I’d say, then organic traffic, but it depends on how you define risk, right? It can take you forever to build up organic traffic whereas …

Let’s say for the example of testing out a new product idea, with paid traffic, you can get data back instantly. You can kind of figure out, right away, if people are purchasing, if people are opting into your offer, and get that feedback immediately and make adjustments, right? Then, build more of a holistic campaign around that but it’s a really good way to test new ideas. It’s also a really good way to scale what you know is already working. I think those are some of the key benefits there.

Sheldon:

Cool.

Leigh:

Yep.

Sheldon:

Cool. Alright, one of the questions that we had was … We’ve got two good questions here and they’re kind of different, one is the question about getting started, another one is how to optimize and scale up. We’ll start with the first one, here.

Leigh:

I’m brand new to paid traffic, I’m not sure exactly where to start. I don’t want to know what the main networks are to consider and what are the main differences between networks and then what KPI’s am I looking for? How do I gage success is what they’re wanting to know there? Then, in terms of timelines, how long is this going to take? Yeah. You’ve seen that situation a lot, I’m sure. How do you usually start that conversation off?

Sheldon:

Yeah. That’s a good question. Someone that’s brand new to digital advertising in general … First of all, I’d say, first of all, have a plan. I see a lot of people that are brand new and they’re like, “Well, we want to get something up and running. So, they just set it up themselves or sometimes they have someone from Google, one of the account managers help them set up and let me just tell you, a fact is their account managers, yeah, they know what they’re doing when it comes to helping you set up the campaigns. Keep in mind, their goal is to get you to spend as much money as possible.

I’ve spent, 10s, 20, 30, you know, a ton of hours on a call looking at all account specialists from the networks and, you know, usually, they’re not looking into, actually, your target audience or into the effectiveness or the ROI inter campaign. They’re looking at how much you’re spending, right? They’re going to try to just get you to spend more by targeting more keywords but just because you’re targeting more keywords and spending more money doesn’t mean you’re making an ROI. If I say the first step would be figure out what networks your audiences are on that’s going to be most effective.

Ideally, hire someone. Hire someone that does this every single day. Otherwise, you’re just going to be wasting money. It’s too easy to waste money on those networks if you don’t know what you’re doing. Get the campaign settled correctly after you’ve figured out which networks you want to advertise on. I think, Leigh, you probably have a lot to say in terms of different types of networks that are effective. I know, just the top of my head, feel free to chime in but I know LinkedIn is extremely powerful for a lot of B2B businesses, AdWords can be more B2C or B2B. Facebook, I think a lot has to do with different interests. I’m not as familiar with Facebook, Leigh. That’s more your area, I guess.

Leigh:

Yeah. For sure. One thing to keep in mind, the two big ones are google and Facebook, right. LinkedIn is definitely a player for, if we’re talking about B2B specifically but the two major sources of all traffic on the internet right now are Google and Facebook. It’s important to understand the main distinction between how those ad networks work. AdWords is query based, right? That means you’re putting ads on top of what people are actively searching for and then Facebook is … The targeting capabilities have gotten a lot more sophisticated, even in the last six months, but fundamentally it’s based on interests and what’s called look alike groups. It’s basically a demographic base. You’re looking at pools of people rather than pools of search queries. What’s important with that, that’s kind of obviously, but what’s important about that is the to think the intent that people have in the context that they’re at, right?

People are either looking for information or looking for a fix to a problem, predominantly. That’s why they go to Google. Products that solve a specific problem can be really good or information that answers questions. You’re going to do really, really well on Google for that. Facebook is really good for targeting types of people but then also re-targeting. What can work really well is actually doing a hybrid model where you’re getting initial traffic from Google. You answer peoples questions, you’re solving the pain points. Those people lower down on the funnel, right? If people are searching for a solution to a problem that they have, you know that’s by definition a really good market for targeting. What we can do with Facebook, is follow up, which is called re-targeting where you put a pixel on your site, right? They don’t have to opt in. They don’t have to enter their e-mail or anything for you to actually have that pixel on their computer. That means you can show ads to them through the Facebook network, which is incredibly powerful. You can get really, really quality traffic for really low costs per clicks.

There’s ways to hybridize both of those. It’s important to understand the distinction between targeting people based on demographic and interests versus targeting people based on what they’re searching for in the moment.

Sheldon:

Yeah. One more thing that, especially, I’ve found personally effective when it comes to LinkedIn is targeting, although you can target a lot of different things as well I think, primarily, what works really well is being able to target people at specific organizations or companies and targeting people with specific positions.

Leigh:

Mm-hmm (affirmative)

Sheldon:

It can be, let’s say if you’re targeting market directors, or, you know, whatever it may be. You can really zone into those specific positions, which is really helpful, whereas you can’t really do that with Google AdWords because they don’t have that data what your job title is.

Leigh:

Mm-hmm (affirmative). You can do that to an extent, with Facebook, obviously because LinkedIn is a professional network and the first thing you’re entering is your job title, position of work, et cetera. It’s going to be more accurate, however, for LinkedIn, you really have to know your numbers and you have to have a high ticket service or product to be selling, meaning if you’re in the $10,000 to $15,000 range of a service, LinkedIn can work really, really well because the cost for click numbers there are high. They’re just set high. We’re talking five to eight dollars a click, usually, minimum. Sometimes they can do better than that but that’s kind of the usual. Whereas Facebook, you’re dealing in a more sub one to two, three dollars per click range.

With LinkedIn, you’re going to get a more targeted audience but you’re going to pay for it. It’s good to test between their networks at first and see what kind of cost per click numbers you’re getting but more important cost per acquisition, meaning cost per lead or cost per sale.

Sheldon:

One more thing is, just back on the topic of, okay, you’re brand new. If you’re brand new, I know it’s easy just to say, well, we’ll give it a little try. We’ll put a little bit of a budget in every single month. We’ll see what happens but that tends to not be the right approach because while if you’re just investing, let’s say, $1,000 a month and on, let’s say, Adwords. I’m at work and you don’t even set it up correctly. You’re probably not going to see results and you’re going to spend $1,000 over the course of a year, $12,000, and you’re not going to be able to gain enough data fast enough to be course correcting, to be measuring our alacrity, seeing what’s working and what’s not.

I know something that Leigh brought up just a few weeks ago when he was talking with someone else was, you really should be thinking about allocating a significant budget that you can really be testing. That you can get a lot of data, that you can course correct quickly because if you’re going to spend the same amount over a year, why not just get those results faster and allocate that budget more up front.

Leigh:

Yep. That’s a great point. When you think about it, it’s actually more risky and you end up losing a lot more budget if you don’t have enough data and you’re just kind of trickling a little bit of money over a long period of time, you’re going to end up spending a lot more then if you condense that budget into a shorter time frame. Say, less than 30 days and figure out what’s working, what’s not working, because then you can say, “Okay, this image is working with this copy. Let’s test different images to see if we can now beat that image, right?”

Let’s just rewind real quick, a big mindset shift change that I understand when I started studying direct response marketing is what’s called a control ad, that wasn’t really something that … A control is basically you find your most profitable, most successful ad and then you’re always trying to beat that. You have one thing. That’s where your goal is, to get one thing that’s working. That’s at least break even or better. Then, you’re always trying to beat that. You never stop a campaign just because you think it’s old or it needs a brand refresh. People throw the brand refresh around all the time. No. Figure out what’s working and then always try to surpass that, which is just a different way of thinking about marketing than most people are exposed to. That’s really the goal. To be able to do that you have to know your numbers.

Sheldon:

Do you think that’s probably … That’s something that probably people traditionally couldn’t do until direct response marketing came around, right? You can’t … It’s hard to measure that ROI with a banner ad or some ads you put in a subway.

Leigh:

Yeah. Right. There’s kind of a difference between direct response and then brand awareness type marketing, which-

Sheldon:

For the people that don’t know that much about direct response, when you’re talking about that, what specifically are you-

Leigh:

It’s anything that’s trackable. A direct response started with mail order catalogs, basically, and you could track down and send what you’re sending out and what return you’re getting back. That has translated, in a lot of ways, into the internet, which then is really just the biggest response medium ever. It gets kind of diluted when … Okay. For example, Madison Avenue type … Brand awareness type campaigns are not trackable down … They’re tracking different things, which is just a different … It’s not a world I exist in or care to because it’s more, I don’t know. It’s based on you just got to hand over a huge budget to a creative agency and then they put an advertisement out at Super Bowl and you’ve got to blow an entire budget in a month rather than actually tracking what you’re spending versus what you’re getting back.

In a nutshell, that’s what direct response is.

Sheldon:

Okay. Cool. Then, let’s see … What to consider in order to start your KPI’s? I think probably one of the hardest things, at least just talking to the people that I work with in the Life Sciences Industry is that not many companies really have a system of setting up conversion tracking or attribute where sales came from. They can’t even get into direct route. Direct response marketing is something where it’s still very alien, I think. It’s very foreign because they just … If you don’t have the tracking set up, it’s really hard to do that, right?

Leigh:

It’s impossible.

Sheldon:

What would you say to some of the key things you should be tracking with conversions? Obviously, you know, one of the main things if you’re going to stop ad campaigns, you have to have good conversion tracking set up, that probably would be my number one consideration. If you don’t have that, you’re kind of just flying blind. I’m not even sure what you’d be optimizing for, unless it’s going to be one of those vanity metrics, like, okay, we’ve got a ton of impressions, clicks, but-

Leigh:

Mm-hmm (affirmative)

Sheldon:

It’s really hard to invest more into that just based off of that, unless that’s what your investors want to see. Sometimes that’s the case. They just want to see more … That’s probably not going to help your business ultimately in the long run.

Leigh:

Yeah. I’ll be very wary of anyone that gives you data back on impressions, likes, shares, things like that. Those are all great but those are an outcome of an effective campaign that’s making sales or making leads. Yeah.

In terms of which KPI, it depends on what your objective is and what kind of business you’re running but let’s take an e-commerce business for example. The numbers, the KPI’s that you want to look at is what’s your CPA? That means cost per acquisition. How much are you spending to acquire a customer? In order to know where to even set that, you have to look at your actual average ordered data. You want to know your average cart value. What the average amount a new customer spends when they check out. Then, also the lifetime value, meaning over time, how much are people spending with you over time?

Then, with the cost per acquisition number, you’re going to know your spend, your cost per acquisition, and then ultimately your return on ad spend, which is a direct number versus how much you’re spending versus how much you’re making. Those are the core. Those are the core numbers that you need. Everything else, impressions, reach, quality score, likes, shares, favorites, all of that stuff is secondary. It’s nice, sure, but it comes as a result of ineffective sales campaign and not the other way around.

Sheldon:

Mm-hmm (affirmative). Also, back on the topic of AdWords specifically, number one, make sure you set up the campaigns correctly, that’s really important because nine out of 10 times we go into a campaign that’s existing that was set up by someone that just didn’t have the experience of setting … They just shouldn’t have been setting up AdWords. We go and then there’s just so much money being wasted that the keywords that are being targeted are completely irrelevant, which so many other things that can be improved. Number one, make sure it’s set up correctly.

Leigh:

What are some other mistakes or issues that you usually see when you go in and look for the first time at something that’s set up?

Sheldon:

It’s hard to say because there’s so many different factors. Obviously, the keyword targeting but they’re all like synergistic, you know? They’re all like, if your keywords are set up that aren’t the right type of keywords, that means that your quality scores for … For people that don’t know AdWords, how your cost per click works, essentially let’s say I have a keyword and I have an ad and I want to bid five dollars for that ad. For that keyword. The market rate’s about five dollars for a top ranking for that keyword. Some companies will pay more than five dollars and some will pay less. It’s dependent on what’s called the quality score. That quality score is from a number of different metrics. It’s one a scale of one to 10. The higher quality score you have, the lower you pay per click, relevant to other people bidding. Other competitors. Your goal is to have quality scores above a six. You’ll be in the eight range is pretty good. You’ll be paying less than someone that has a quality score of four, by a decent amount.

Now, we get into … It’s like a domino effect. Your key returning as well. Your ad relevance is probably also wrong, which lowers your quality score. Likely, the landing page that you’re running traffic to is probably not that good so your quality score is also … That’s in just even people don’t realize the difference between campaigns and ad groups. They aren’t running split tests or having more than just one ad per ad group. There’s so many things. That’s why I just try to make it simple and say, “Look, you need an expert that’s qualified to set up in the first place.” It’s hard to point out one thing that’s wrong because when it’s not set up right, everything is just wrong. It’s like you really just have to go and set it up from scratch because there’s no salvaging something that has so many issues with that. You’re just going to have to re-do it, you know?

I know that was a long winded way to answer the question but, in short, having an expert that’s certified to set it up for you. Make sure they have their advanced AdWords special certification or an agency that has some of those people. Beyond that, number one, have someone set it up correctly.

Number two, have a budget allocated. Not just $500 a month for indefinitely or $1,000 a month. Have a serious budget, 10K, 15K, just a start and be able to test with, you know? How media buys work is the first one is going to be the worst results you’re going to get but you’re getting data, right? Then every month after that, it gets better and better, better, and better, and better. That’s how it works.

Then, also, other things to consider is, consider where you’re running those ads to. Consider the ads that you write. There’s so many bad advertisements out there. There’s a lot of ways that. Even, Leigh, I think you had a really good resource actually of you can actually see your competitors, what their ads are like. SEM Rush, you can do some of that stuff. You can do the competitive research to see what competitors are running. You can also use … What’s the tool you can use to see the actual display ads?

Leigh:

Yep. It’s called mote.com. It’s fantastic. It’s just a search engine that you type in a competitor and then it will show you what display ads they’re running. You can just kind of see a visual grid. What’s interesting, this is an important note, is that you can actually click on them and then see how long it’s been running, which is really important, because if, assuming that they know what they’re doing if they’re one of the big brands, they should be, the longer that they’re running an ad means that that it’s actually profitable.

It’s a way to actually tell what ads are actually profitable because when you look at all of them, you don’t want to just model everything that they’re doing because those are also going to include the duds that they’re testing. You want to make sure that it’s been running for a certain amount of time and then look at what elements they’re using. What kind of call to action are they using? What kind of headline, are they doing a headline and a sub headline? Are they using questions? Are they using curiosity? Are they using fear and pain points? What kind of images are they using? Is it multi colored imaging? Is it just one solid color or two? Try and pick apart the elements.

Sheldon:

Even languages. We were just looking at some of the big players like Thermo and as the AdCam in we saw a lot of the ads that AdCam was running was actually in Chinese.

Leigh:

Yeah.

Sheldon:

Chinese display ads.

Leigh:

That was really interesting.

Sheldon:

Yeah. I mean, that’s my point. It’s like, if you’re not a company, like most companies, if you don’t have a huge, huge budget, like Thermo or AdCam or some of these really big players, you’ve just got to be smarter. You’ve got to be more agile and smarter and using the tools that are out there allows you, essentially, not to be wasting money doing the testing because you can find out that based off of what Leigh was saying, these companies have done the testing for you. You can just pick the winners.

Leigh:

Yeah. One mistake that I’ve seen too is trying advertise too many things at once. If you’re just starting out, I would definitely pick your core product offering. Make it as easy for yourself as possible. Pick what you know is your best selling product and try to get that working for paid traffic. You can get that, then you can start introducing up sells, cross sells, things like that. That gets more complicated. Just start with what you know has the best shot of success up front. You’ll get there.

Sheldon:

Yep. We’re almost ending our 30 minute mark soon, so we just want to answer … We still have a ton of other questions on AdWords. I think what we’ll do is a two parter on this, maybe next part, we will answer a couple of the adverse questions. Just to wrap up this question, it’s about timelines and objectives and what are realistic. Timelines for AdWords, like I said, it’s very quick to get them set up but it doesn’t mean it’s going to be very quick to find them in the campaign. If you do have that budget and you put it up front then, of course, you’re going to find something that works sooner rather than later. If you’re spending it out over a year then you’re probably not going to find a winning campaign, maybe ever, or maybe a year later. Who knows.

I think realistically, it just comes down to good testing and having some budget to play with and experiment with and objectives, I think. Your key goal, I’m curious to have your thoughts on it but for me, when I go to AdWords or I go into really any media buy, digital advertising campaign, I try to put away all the noise. There’s so many different metrics, demographics, time of the day, audiences, you know? Increasing bit amounts by certain percentage or zero impression share. There’s so many of these metrics.

The one that I really look at at the end of the day is just your cost per conversion. That’s probably the most important and your goal. Your main objective is to reduce your cost per conversion, you know? To reduce how much you pay for what you define as a conversion. Whether it be a sale or a lead. If you can get that number down that’s always my goal.

One way I think about it, this might be an over simplification, if you were to go into a shoe store and there was the same pair of shoes but one was $30 and one is $90 and they’re the same pair of shoes then you’re just going to want to pay $30 and buy up all of the $30 pairs of shoes, which are the same. Like I said, it’s a little bit of an over simplification because your lifetime value and how much you make from one lead and one service offering versus another one might be different.

Leigh:

Yeah.

Sheldon:

It’s hard to compare apples to oranges but let’s say they’re all apples, you know? Different campaign but it’s for the same ad goal, the same lead, then it makes sense that you just want to lower that cost per conversion.

Leigh:

Yeah. I like that because it’s important what you said. You want to buy up as many pairs of those shoes as you can. Really, that’s the goal of … The goal of paid traffic is to spend as much as you possibly can, which is a weird way to think about it because usually you think, “Oh, I want to have a marketing budget, which is a cap and spend less than I have to.” It’s actually the opposite, I think, with paid traffic. You want to find profitable campaigns. If something is working, you ought to funnel as much money as you possibly can in there.

Now, what will happen is that there will be a limit, right? Your cost per acquisition will rise the more that you spend ultimately but you want to see how far you can take that, basically. The goal is to spend more but at a profit.

Sheldon:

Yeah. Alright. Just wrapping this up, we … Just to recap, today we talked a little about AdWords, the question was just about if someone was brand new how do you evaluate the different networks? What’s different? What do you consider and where do you start? What KPI’s factors and time lines are realistic for a good paid advertising campaign.

We have another question for next week. It’s about someone that’s currently running AdWords. How do they know when to scale up? How do I know when to end a campaign that’s not working? What does working and not working mean? How can I tell what my competitors are doing? We’ll down a little bit deeper on that in the next episode. That’s it for today. Leigh, any last words before we sign off?

Leigh:

Yeah, if you have questions leave them in the comments. Let us know if you’re doing AdWords, if you’re doing Facebook, what are some of your challenges right now? Let us know and we’d be happy to help dissect them with you.

Sheldon:

Cool. Alright, everyone. Thanks for listening.

Sheldon Zhai

Sheldon Zhai

Sheldon Zhai is the founder and CEO of Supreme Optimization. He's an expert digital marketing and technical web development specialist. Previously he was a molecular biologist and researcher at the University of Wisconsin - Madison. You can find Sheldon Zhai on LinkedIn.

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