I recently started following @swardley on Twitter
In his tweets he expresses many of my misgivings about how "strategy" is done (or not done) except that rather than just moaning about how everyone senior to me is an idiot - he has a solution.
... maps are fundamentally a communication and learning tool, a way of describing a context and learning from one to another ...— swardley (@swardley) October 28, 2015
Here a "map" is not something related to geography - it might be better to think of it as a 2D simplification of the real world. Two might be the wrong number of dimensions here; maps have symbols and colours on them too.
Whatever. That isn't the point
Wardley likes to use how visible something is to consumers as one axis and how evolved/developed a component is as the other.
I might return to Wardley mapping later. For now, the important observation is that if you know where you are on a map you can tell what is around you and where you might want to go.
This differs from a common approach to strategy which is to start with figuring out a goal or purpose. Without knowing where you start from this is meaningless.
Every little girl can stamp her foot and say "I want a pony!" And every business can make a lofty sounding yet vacuous statement of purpose which dissolves as soon as they evaluate their current position and realise the only important thing is survival.
Enough with the hatred for strategy consultants. I will try not to do any more of this. How can we use this in PPC?
The first thing is to figure out what axes to use. What is out North/South? And what is our East/West?
Here is my first go at this - let's see if anything interesting pops out the other end:
Now we can begin to play around:
Google wants people to be using their platform for brand and direct response.
They probably don't want people to be incredibly sophisticated direct response advertisers because once people get into measuring incrementality and profitablity their spend drops a bit.
I would believe that this is true of the most sophisticated brand advertisers as well but I don't know enough to say for sure.
Discussion on the specific location aside, being in that general area (top right quadrant) is good for advertisers too. How do they get there?
Of course, not everyone has to start in the bottom left corner.
I currently have a client in the following situation:
My preferred path is partly because this puts them on the proven road of starting with direct response and then when this starts to suffer from diminishing returns moving across to branding. AdWords works really well on this path with companies getting comfortable with the platform where it is strongest before moving into more uncertain territory.
This raises a tonne of questions about what is the optimal route. I am sure it is possible to straight from where the client is into the top right corner. And I am sure it is possible to head "due North" as their plans seem to require. But I feel that I can move them very quickly up and to the left after which they will be making a lot more money. The focus on developing both brand and direct response tactics is spreading me rather thin.
To make another analogy with a geographic map - the shortest route isn't necessarily the fastest.
We should put these barriers on the map so that it is obvious that we have to navigate around them.
Don't get me wrong, I think this barrier is hard to cross wherever/whenever you try and do it. But there are advantages to crossing higher up. i.e. do direct response first and then move into branding:
There is a skills gap in AdWords. Most practicioners are better at direct response. Anyone who is good at branding can do more interesting things. Unsophisticated accounts are unlikely to have the broad range of skills required to run both direct response and branding.
So on the margin, it is better to hire another direct response guy than a PPC branding expert (do such people exist?). When this stops being true, it is time to cross the wall.
All the above is really just me reaching into the excuse bag. Doing (and particularly measuring/being accountable for) brand stuff is outside of my comfort zone.
The advantage of a map is that I can use it to outline where my comfort zone is:
And say what areas I am interested in developing:
So far, this does not seem to be giving us much actionable insight. Perhaps that is to be expected; if I can provide you with PPC strategy in some generic blog post where I know nothing about your business then you really need to up your game.
But it does give us a way of expressing context which is often useful. Let's see how it helps with the oft repeated question "how should I charge clients?"
There is a great deal of disagreement on this inthe #ppcchat community with the pnly items of consensus being:
There are three main ways of costing a project:
"Pay for time" is best suited for smaller, simpler projects where the link between "I do a good job" and "the client invests more money" is uncertain.
Percentage of spend deals are perfect where the link between "I do a good job" and "the client invests more money" is very strong. As can be seen from the map, this covers a great deal of the available space which is probably why this kind of cost structure is so common.
But as direct response advertisers get more sophisticated the link between "I do a good job" and "the client invests more money" is broken again - indeed, part of what doing a good job means for these clients is to advise them when their returns have diminished so much that the marginal return is negative.
I doubt this will end the debate forever, but I think it does demonstrate how a map can add useful context for "it depends" type answers.
So to answer the "how should I charge?" question for my business I look at where on the map my clients are and where they would like to go (or where I wish they would like to go!):
Right now I mostly charge clients a day rate or a fixed project cost. This map shows that I should switch to percentage of spend.