Jon Kelly will be speaking about “Advanced PPC” at SearchFest 2010, which will take place on March 9th at the Governor Hotel in Portland, Oregon. Tickets are available now. To purchase, please click the following link.

1) Please give me your background and tell us what you do for a living.

I started my career consulting to insurance companies at Mercer Management Consulting (now Oliver Wyman) in the mid-90’s.  From there, I had a brief stint in marketing at Oracle.  I’ve been working in online insurance since 1998, when I became a co-founder of eCoverage in San Francisco. We were the first venture-backed online insurance company and ended up selling to GMAC Insurance in 2001. Among other things, we were one of the first advertisers on Google, actually buying search ads on a CPM basis.  After eCoverage, I set up my own consulting/affiliate shop and did pretty much everything: managing affiliate programs, buying all kinds of online media, and building affiliate sites.  In mid-2004, I merged my business with Cyberspace Communiations Corp. to form SureHits.  We continued on primarily as an agency until 2005, when we introduced the SureHits Ad Network.  That grew incredibly quickly and we stopped bringing on new clients for our agency soon after.  In 2008, we sold the business to QuinStreet, where I now run the insurance vertical. 

2) Under what circumstances should a business consider creating and operating an affiliate program?

Most businesses should create and manage an affiliate program.  A well-designed and run affiliate program presents little risk to the advertiser and a lot of cost-effective sales upside.  As a business owner, I think you should avoid affiliates only in the following scenarios: 1) if you have more business than you can currently handle (seriously, affiliates are hard to shut down without damaging your reputation), 2) you are unable to assign resources to properly manage an affiliate program —  a good program takes a ton of effort and nurturing, 3) your technology and/or product is sub-par for conversion, or 4) you are in an industry where regulatory issues make affiliate advertising too big of a risk.  One other consideration for retailers are the new state laws that could compel them to pay additional state taxes in states where they have affiliates.  Unfortunately, we are facing that now in my home state of Colorado.

3) How should a paid search marketer deal with competitors who bid up terms to seemingly unsustainable levels?

One of the keys to success in paid search is to manage to your own key performance indicators and not worry too much about what competitors are doing.  All you can do is to maximize the performance of your campaign.  It’s not really possible anymore to bid strategically to push competitors out (it definitely once was on Overture).   Many competitors will come in with aggressive bids but exit once they realize their campaigns are unsustainable.  In terms of maximizing your own campaigns it’s vital to test and measure at each layer of the campaign, from creative to bids to landing pages, through to online and offline conversions and re-marketing.  Given the competitive nature and pricing in search now, there is very little room for complacency at any part of the purchase funnel.  We are even seeing issues like website speed becoming major competitive disadvantages for those who are behind their competitors.

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