4 Things Online Businesses Should Have

Posted on December 7, 2011

In the paid search industry we talk a lot about how to get the most out of a PPC account by tweaking settings in that account. We rarely talk about changes that can be made within a business to aid online success. I’m no business guru, but here are my thoughts on 4 things businesses need to have to win at PPC

1. A Business Model Google Likes

Good luck trying to make money on AdWords with your thin affiliate site.

Other business models that may be doing OK now but which I would consider high risk:

  1. Price comparison sites
  2. Review sites
  3. Any sort of aggregator.

The following business models should be pretty safe (ranked in rough order of “safeness”):

  1. Manufacture a unique product and sell it.
  2. Brand name reseller.
  3. B2B lead generation.
  4. Non brand name reseller.
  5. B2C lead generation

Aaron Wall writes in a lot more detail about business models that Google does not like on the SEObook blog.

2. An In House Development Team.

For a company who want to win big online the website is too important to outsource.

I have no doubt that there are quality agencies out there who can lead and manage the development of a cutting edge website that is responsive to changing business needs. However, my experience has mostly been with the other type of development agency whereas, without exception, the in house teams I have worked with have all been excellent.

At the very least you need a person who is competant enough at web development that they can tell an agency that two weeks and $2000 for simple tagging is unresonable.

3. A Flexible Finance Department

There is nothing worse than missing out on profit because of low budgets.

For some businesses I have worked with, paid search budgets are set at the start of the fiscal year and then they can’t be changed. The budget estimate is normally based on a forecast which, for a new or rapidly growing business, is based on predicting results way beyond the (low quality) data that we have access to. For PPC, the data quality issue is not as bad as for SEO, but many points from Sam Croker’s post on SEO forecasting still stand.

For a PPC manager, leaving money on the table because of a low budget is massively frustrating ("I can make you an extra $10k/month. It’s so easy! It will take hardly any time. Why are you doing this to yourself?"). Trying to avoid this problem leads to inflated forecasts and disappointment.

Businesses with shortish buying cycles and good cash flow do not need to worry about budgeting for PPC. Volume is better controlled by varying target ROI or by measuring profitability. All other things being equal, these businesses will crush those with more ridgid accounting practices.

4. Be Really Good At Something Else

If your company is only good at marketing, you have to be really good at marketing. Like 99.99th+ percentile good. If your company is good at marketing and one other thing then I think you only need to be about 80% on each of them to succeed.

I would say the most important non web based competencies for online success are

  1. Product (e.g. Apple)
  2. Logistics (Amazon)
  3. Customer Service (Zappos)

My target audience with this blog are other people who manage PPC accounts. So this post might not be that relevant. But I think it is important to keep a view on the whole company/business not just the impression share and conversion rates.

I look forward to being corrected by any business experts who may read this in the comments! (I’m sure many of my points are not as simple as I’ve made them out to be)