Ah, the age old question every agency owner has to answer… How much wood could a woodchuck chuck if a woodchuck could chuck wood?
The answer is so obvious. A woodchuck would chuck all the wood he could chuck if a woodchuck could chuck wood.
So how does this tongue twister apply to advertising agency owners like us? Let’s make a comparison...
You start out on your own, chucking wood and selling it outside of a local campground. You are profitable and, because you’re ambitious, you want to grow. You chuck as much wood as you can but soon realize the more time you spend chucking wood, the less time you have to sell it. Which is more important? Chucking or selling? Both.
Since you’re a savvy entrepreneur, you hire your first jr. woodchuck. But how much wood can this woodchuck chuck?
Your woodchucks wood chucking goal: 250 pieces/day.
Week 1: Although your woodchuck’s processes are slow, he goes beast mode and chucks 500 pieces of wood!
Week 2: After a week of chucking non-stop, he gets tired, pulls a hammy and his girlfriend breaks up with him. 100 pieces.
Week 3: He gets better but still fluctuates between 150 - 200 pieces/day.
All of a sudden, you have increased your sales process but your fulfillment is slow and your employee is underperforming.
Is there a smarter solution?
Let's say that instead of hiring a woodchuck, you went to Costco and bought a woodchucking machine. This woodchucking machine claims it has 50 horsepower and can chuck 500 pieces of wood per day, everyday, comes with a one-year warranty.
Is the comparison obvious yet? As ad agency owners, our wood is advertising campaigns. The more advertising campaigns an employee can manage, the more profitable they will be and the more scalable your business will be.
The problem is, there is a point of diminishing returns. If one account manager has too many accounts then some of those will be neglected. Happens every time.
Depending on your business model your agency might just manage AdWords, Facebook or a combination of both (or even offline). This article is geared towards AdWords automation to both increase productivity and reliability of account management.
First, let's make a very important distinction between automated rules and automated bid strategies.
Automated rules; Perform the same tasks that a human account manager would perform, but through automation, for free.
Automated bid strategies; Control bids to minimize CPC, hit a Target CPA or ROAS. Put away your Texas Instruments calculator, spreadsheets and don't even try to mess with the bids manually. You won't win.
The most common automated rules that we use on a daily basis are for keywords and display placements.
Things to consider
Client’s budget; How much do they have to spend on ads and how much for management?
Client’s CPA; if the client is in a vertical where conversions are very expensive then you must be extremely careful with your targeting choices. More expensive conversions mean more money is required to get statistically significant results.
As a general rule of thumb, you want to begin with a test CPA of about 3x the value of your client's Target CPA. If you have a list of 100 keywords and a target CPA of $10, then you need $3,000 in order to accrue a significant amount of data across each keyword. Why? Because $30 x 100 KWs = 3000, that's why. Now imagine if your client’s CPA was $100. You really need $30K before you start to see the light.
At the campaign level, click on automation > change the rule for keywords > pause keywords when > then, if your Target CPA was $10 your rule would look like this.
It’s fairly obvious, but this will pause a KW that got $30 in traffic without a single conversion. You want to choose all time because some KWs may be low volume. This does not eliminate the need for adding negative KWs to avoid further waste, but it does help lend a helping hand in your client’s account.
If you want to win with display then you have to eliminate low-quality placements as quickly as possible. Since you should start out using the maximize clicks bid strategy, AdWords will automatically begin allocating more of your budget to wherever is generating clicks for the lowest CPC. If you’ve ever run a display campaign before then you know you will get tons of clicks but if none of those converts then nothing matters.
We recommend automatically eliminating placements with a spend 3x your client's target CPA and performance below their Target. You use essentially the same rule as you did with search, but apply it to placements. To do so, click on a display campaign > Display networks tab > Placements > Automate > Pause placements when...
Remember, we are talking display here and there could potentially be thousands of placements or even tens of thousands. In order to be more efficient if your client’s budget is small then you might want to do this on the topics level or even display keyword level.
Automated rules are not perfect, but they save us hundreds of hours per month and make our client's campaigns more successful, and quicker, with lower management costs.
There are dozens of rules like this you can apply to any aspect of your account. Be creative. Just think, if I were the account manager what would I do when I open my client’s AdWords account? What would I look for? What would I change if the numbers were above or below a particular metric?