PPC is "Not About The Ranking" - 7 Ways to Convince Your Client

As the online marketing manager at SARBRO Solutions, I deal with some small business owners who advertise online. Often enough, they are in very competitive markets, where there are millions of searches a month, and the Cost per Click is between $2-$5. Similar to the "Rankings are Dead" argument Bruce Clay makes in regards to SEO, it's not about the rankings, it's about the conversions.
But it's not only small business owners that have this misconception, CEO's and others who are responsible for the budget, often have an ego issue, "why am I not number one on the Search Engines"? They will obsessively check their rankings to see if they are number one, convinced that their decrease in leads is due to not being in the first place on Google.
At one point, I was working at a company where we were spending a couple hundred thousand a month on Paid Search. At that point, while we were dominant on the search engines on paid search, our cost was consistently going up, and not only that, our biggest competitor consistently outranked us. The CEO was convinced that if we would be in position number one, we'd do much better. Of course, we adjusted our bid, raised it to $15/click, our budget burnt out by the end of the morning, and we spent an extra $10,000 on leads we could have gotten for cheaper.

Now maybe I live under a rock, and all of your clients are extremely web savvy, but I would guess that you hit this challenge with clients sometimes. So how can you convince your client that it just isn't the best idea to spend $3 a click, when you can just as easily spend $1 and get (up to) 3 times the traffic?

So here are 7 suggestions to use when you talk to your client:

1. Trust/Reputation - As the "Expert" in this field, I care about your business, and I know that you are going to get more leads if you lower your bid. Aaron Wolski from Zip.ca adds a great twist to this. In his words; "They hired me for a reason and their interference will only hinder the results I can generate for them. I have an ego, yes, but more importantly I have a reputation to protect!"
2. "Test it My Way" - Test it my way for three weeks, and we can always change it back if it doesn't work.
3. Tell The Story - Assuming that you've been in the industry long enough, you have some type of success (or failure story) that involves a similar scenario, where all you did is lower you bid.
4. Ask, Ask, Ask - Figure out what exactly is bothering the client. Most clients are just expressing their frustration by proposing answers. By identifying with their frustrations, you can move on to suggest the business realities, and what you are going to do.
5. Uhm, Give the Client what they Want??? - Sometimes, the client really is on an ego drive. Accepting that your' clients "KPI" is being number one for a specific keyword, they will have to accept that they can only be in the top 10 for a specific amount of time each day.
6. Go Through the Numbers with Them- One of the most effective techniques I've used is to go through the numbers with them. Opening up the google adwords suggestion tool, showing them their account dashboard, the cost per click to be on page one. At this point, it's a visual exercise, where they understand that if they bid lower, they can get more clicks.
7. It's All About Quality - Dan Gajewski, an analytics expert, suggested an analogy to the retail sector, where manufacturer's also pay for "visibility space". Often times, it's the new company with a product that people don't really need are paying for the premium space. Why? Because they need to be on the top in order to get people to buy the product. In contrast, Mac and Cheese stays on the lower shelves, and still far outsells the product on the top - because people are looking for it. Similarly, in PPC, many of the people clicking on the top links aren't necessarily going to buy.

In my experience, some industries get much higher conversion rates from the lower positions, while others get the highest conversion from the more premium positions, and obviously, the top positions get most of the clicks.

This post was helped by all of the people who answered the post on linkedin.
David Jaeger is the online marketing director at Sarbro Solutions, a Los Angeles Search Marketing Firm specializing in ecommerce marketing, and online lead generation.