I want to share a horror story I recently heard about AdWords managers:
“…we’ve been down that road before and we have decided on keeping our ppc management in house. The last two companies we hired to manage our accounts cost us $60k in fees, a google product feed disapproval (which I just now got running again), a few million dollars in sales and worse, I had to teach THEM how to manage our campaigns … “
How and why do these things happen? Since you’re reading this, you can probably guess I have some thoughts on the topic. I do, so follow along as I consider something seemingly unrelated.
What can AdWords managers learn from manufacturing titans such as Intel and Toyota? At first blush, it may seem like there is nothing in common. Indeed, in the day to day operations there isn’t much commonality. But if you think a little bit more deeply about what made these corporations so powerful, some ideas bubble to the surface that can benefit those of us in the digital marketing realm.
This whole train of thought was motivated by reflections on my personal experience. Not only what I learned in my time as a process engineer at Intel Corporation, but the sorts of challenges I face as my agency grows. It has dawned on me that the solutions to my problems already exist, and indeed I already know what they are.
You see, Intel and Toyota did not become synonymous with high powered CPUs and ultra-reliable automobiles by accident. No, their legendary status was earned by implementation of what are called Lean systems. Just as the word implies, it involves removing many different types of “fat” or waste from systems, and developing solid processes around frequent activities. When you really think about it, it’s just an extension of the scientific method. When you care about making connections between cause and effect, you had best minimize variations in your causes.
While many of the elements from the manufacturing realm don’t crossover to AdWords exactly, the core principles are incredibly useful.
There are quite a few Lean principles, but those which have the most overlap are:
· Information should flow directly
· Processes should be standardized
Let’s think about each one of these in turn
The obvious point is that agencies should have clear lines of communication with the client. In particular, the client should have direct access to the person with the answers to their questions. If that person is the account manager, or someone in close contact with the account manager, this is optimal. This reinforces trust between the agency and the client, as well as allows the agency to react as quickly as possible to changes in the client’s business.
Returning to the horror story in the beginning, had the agency implemented Lean systems, they would have partnered with the client to learn the nuances of their business. While many aspects of account management are the same across industries, buyer avatars, acceptable tolerances of key performance indicators, and many other factors vary greatly. It is only by creating a simple and clear line of communication can horror stories like these be averted.
Less obvious is the need for clear flow of information where software is concerned. Suppose a business is using AdWords to drive prospects to their website. Of course, the landing page then attempts to turn those prospects into leads, and fill out the contact form. AdWords is particularly well adapted at dealing with this, and if this is all that is required we are in good shape.
However, in many instances this is not enough. After filling out the form, a member of the sales team will contact the lead and attempt to advance the sales process. The results of this will be recorded in some CRM, which can ultimately serve as a black hole. If that information is not then fed back into the AdWords system (remember, you can always import offline conversions) then a critical line of communication has been broken. The account manager is unable to truly optimize for revenue, as she has no insight into the actual sales! Clearly, this is a broken system.
Many businesses will recognize and solve this issue, but will not implement Lean principles. For instance, the offline conversions may be imported at different times, which can result in inefficiencies in the operations of the account manager. Further complications can arise if there is no standardized definitions of terms. Details will vary by the business, but the principle of direct information flow dictates that information should be transmitted between required nodes at agreed upon times, in an agreed upon format. Each and every time without fail.
Standardization of processes:
Manage accounts for enough time and you will come to appreciate the seemingly random nature of web traffic. Click through rates and conversions can fall off cliffs for seemingly unknown reasons. Less dramatically, there are daily variations in your parameters that you cannot control. This results in “bands” of performance for your key performance indicators. Rather than having a singular value, they have a range. Every business will have an acceptable range of these indicators.
One thing that makes Toyota’s cars so reliable is the fact that they are each built in precisely the same way (within tolerances of course). The process is standardized. The 10th Camry off the line is built in precisely the same way as the 10,000th. This is enormously powerful. Toyota can’t control natural variations in materials, or even the weather, but they can control their process.
Likewise for Intel, each and every wafer is (ideally) processed in the same way. Of course, things happen. Robots tend to be twitchy and electronics at the industrial scale can be just as touchy as your own PC. This results in variations in the process, however Intel takes great care to make sure the recipes are standardized to minimize unnecessary variation.
This means that if (when) something goes wrong, they have a system for tracking down exactly what went wrong and figuring out how to fix it. The engineers are able to construct mental models of the processes involved and deduce where things have gone awry. They can then modify the process on experimental wafers to either validate or disprove their model.
The analogy for AdWords is in how we deal with variations in the performance of our accounts.
Because so few account managers have an engineering background, and even fewer have experience in high volume manufacturing of expensive products with tight tolerances, they will gravitate towards working on “gut feelings”.
The end result for clients is frustration, thousands in wasted management fees, and even more in lost sales. Worst of all, there is no solid foundation on which to scale the business. If you can’t predict what is going to happen to your sales as you change your marketing, then growth is all but impossible.
The Lean AdWords System dictates that all processes are standardized. This is everything from keyword bidding to split testing to keyword research. Any and all processes that are undertaken more than once should be standardized, documented, and followed precisely. This enables a system of continuous improvement that is nothing but a pipe dream for account managers who rely on their gut feeling.
This is the foundation of our system at Dr. PayPerClick. We are attempting to bring AdWords into the realm of science, to the furthest extent possible. As our process evolves, I’ll share the learning so that the AdWords community can avoid horror stories like what I shared in the beginning.