You know how it goes… testing, testing, testing.  That’s really all that marketers do for a living.  In my case, much of my testing deals with pay per click advertising.  Well, the latest adventure in PPC was focused on determining the value of being in the top box for paid search.  Typically, in order to get into the top box, you need to be bidding for the #1 or #2 spot (although sometimes you can get there as #3).

At any rate, I decided to take one of the more trafficked search terms in the billiards industry, pool cues, and bid it up.  In order to get into that top box, I had to increase my bid by about 25%.  And what were the results you ask?

• Traffic from that term increased by 166%
• CTR actually dropped by 16%
• Conversion dropped by 18%

So what happened here?  Essentially I paid 25% more on a cost per click basis and saw zero improvements from a conversion standpoint.  In fact, my CPA jumped quite a bit due to the fact that I was paying more per click and converting at a lower rate.

This is pretty much what I expected to happen, but you’ve always got to test.  As for reasons why, the answer is pretty clear – tire kickers.  When you have high traffic keywords, you are logically going to attract more visits that are not ready to buy.  They click, they look around and they leave.  These visits are useful from a branding perspective and could turn into assists at a later date, but the conversion rate on these terms is traditionally pretty awful as compared to long tail.

At any rate, we’re happily settled back into our lower paid position (typically floating between #4 and #6) for this high traffic term.  We won’t get as much traffic, but we’ll still get plenty of exposure at a far lower cost.

Here’s an oldie but goodie.  This comes from the Chicago Department of Health circa 1910.  As you can see, in addition to beer and coffee, apparently things like meat, bread and candy will “poison baby”.  Because apparently moms in Chicago were constantly pouring beer and coffee down the throats of their babies.

This is a perfect example of a scare ad that doesn’t work.  Generally speaking, scare tactics fail miserably.  Those awful “Truth” anti-smoking ads, the new Meth commercials, the “Marijuana Harmless” PSAs from last decade, the list goes on and on.  Simply put, shock ads don’t work.  The main reason they don’t work is because they are more often than not incredibly insulting to the target.

The drugs  = terrorism is a classic example of this:

Instead of getting people to stop buying drugs, the viewer watches the video, rolls their eyes and turns the channel.  The commercial is so ludacris it becomes insulting to anyone who watches it.  No one but the people who made the commercial believe this, so in the end the commercial does more harm than good.

As drug/peer pressure PSA’s go, I actually really liked the “Own Your C” series.  Most of them were indirect, getting kids to think instead of sledgehammering the message.

Ever wondered why when you go to buy certain products, the price is exactly the same wherever you go?  It’s not price fixing (even though it seems that way).  It’s a policy called Minimum Advertised Pricing, or MAP for short.  Here’s how it works:

• Retail store buys product from distributor/manufacturer
• Distributor/manufacturer tells retailer, you cannot advertise the price of Product X for less than Price Y
• Retailer immediately discounts the price to the minimum based on the policy
• Retailer wastes countless hours “policing” his competition looking for anyone who’s breaking MAP

Now I know what you’re thinking.  How is this not price fixing?  Here’s the catch.  The manufacturer is telling you how much you can advertise the item for.  If say, someone comes into your store or calls you on the phone and offers to buy it for less, this is not a MAP violation.  That’s why from time to time you’ll see websites or stores that put “call for pricing” in their ad instead of the actual price.  When they do this, it is because they’re likely wanting to sell the product for less than MAP.  As a result, they can’t print the price without breaking the rules.

Let me give you an example.  Say you’re in the market for some billiards supplies and want to buy this Elite break cue:

What you’ll find is that pretty much anywhere you look (although you should only be looking at PoolDawg.com for obvious reasons), you’ll see the price set at $79.20, 20% off the retail price of $99.  This is because the manufacturer has MAP set at 20% off.  As a retailer, we are not allowed to advertise this product for anything less than 20%.  When a product gets discontinued, MAP usually gets thrown out the window, but other than that, MAP is the rod for the billiards industry (as well as entertainment, electronics, toys, etc).

Now you might wonder what happens when a store breaks MAP.  Typically, they get told by the manufacturer to bring their prices in line.  Some manufacturers will not ship out future orders until they are back in line, others will simply cut them off completely and close their accounts.  When you have an industry where there are only a few major distributors, trust me when I say you don’t want to get cut off.

This might sound odd, but I love MAP.  MAP completely removes price as a point of differentiation.  It doesn’t matter where you look, you’re not going to find this cue for less than 20% off (if you do, let me know so I can report the cheaters!).  This means that we can focus on other points of differentiation like customer service.  Plus, MAP helps me maintain reasonable margins so our company can actually make a few bucks, thus keeping me employed.

For me, the biggest downside to MAP is that you end up spending far to much time looking for cheaters.  Really, this should be the job of the manufacturer, but in the end it is always the retailer that finds the cheaters.  Sure, there’s less flexibility when there is a MAP policy, but in the end it makes my job easier.