When I planted beets this summer, I followed the instructions on the seed packet and spaced them 6 inches apart, with 15 inches between rows. In a three-foot wide bed, that meant I had room for only two rows, or a total of about 32 plants.
After all, each plant had exactly the same requirements for growth: the same nutrients, the same need for space, the same need for water and sunlight. Because they were identical, competition among the plants was at a maximum.
In a different bed, I planted a mixture of lettuce, turnips, kale, carrots, basil, tomatoes, and pole beans. Since the root crops didn’t compete with the leaf crops for sunlight or underground space, and the tomatoes and pole beans could run up the trellis on the north side of the bed and stay out of the way of the other plants entirely.
I was able to get a lot more yield out of that bed, because the crops weren’t competing with each other nearly as fiercely as in the all-beet bed. Actually, the plants’ interactions were often helpful.
The shade-giving lettuce kept down weeds. The basil’s scent confused caterpillars searching for yummy carrot greens. The turnips pulled up nutrients from deep in the soil, which I’ll return to the top layer when I compost the turnip greens.
The lesson: the more similar the organisms in a given environment, the more fierce and harmful the competition.
This is true in all of ecology, including the human branch known as economics.
The Google SERP: The Ultimate Competitive Environment
Arguably, the most competitive of all advertising media is the Google search results page. Think about it: all your most savvy competitors in one place, with extremely limited space, jostling to attract the attention of the consumer who has just signaled a powerful present desire to fill a need in their life.
Perry Marshall has written extensively about the “Winner Take All” principle in AdWords: the competitor who has a slightly better sales process, and so earns slightly more profit per click, can end up dominating the market entirely.
For a single keyword, that can happen. But when you look at the entire universe of keywords available to most advertisers, there’s another way competition can play out: niching.
Just like a bed of mixed crops is more productive than a monoculture, a Google SERP that has listings for a variety of products that satisfy a variety of needs is a healthier business ecosystem.
Unfortunately, most advertisers aren’t interested in evolving to fill a niche. They write ads as if they’re trying to collect every click they can possibly get.
You can tell markets in which undifferentiated head-to-head competition reigns by two markers: hyperbolic marketing and differentiation by price.
The marketing gets hyperbolic because the only way to be heard is to scream louder than the next competitor. This produces a positive feedback loop that leads to ear-splitting unpleasantness, turning prospects off.
Competitors differentiate based on price because it’s the easiest message to get across amid all the shouting and wild gesticulating. People make decisions on price when they have no other means of comparison.
So what’s the solution? What do you do if you’re in a market in which all the ads are saying more or less the same thing? After all, they’re probably all following some best practice, so deviating from it might be risky.
Niching Your PPC Ad
As always, when I’m faced with a business conundrum, I turn to nature as a model to mimic for a solution.
In nature, as in business, competition for scarce resources drives evolution. But in nature, unlike business, evolution always means increased diversity. Less head to head scrambling. More niches. More efficient sharing of scarce resources.
And often, mutualism, in which neighboring species actually enhance each other’s prospects for survival and reproduction.
How to Niche in PPC
The first thing to realize is that each keyword actually represents a universe of searchers with diverse needs and search criteria. Only a small segment of that universe is of interest to you.
For example, if you sell greenhouse kits, you could be serving any number of markets:
- Serious suburban gardeners
- Rich people who want a beautiful sun room
- Preppers who want to grow their own food so they can eat when society collapses
- Small scale farmers
- Contractors and architects looking add another service to their mix
And so on.
Look at the Google SERP for the keyword “greenhouse kits”:
There’s almost no attempt by these advertisers to target a particular demographic or market segment. The result, from the searcher’s point of view, is a confusing and overwhelming page.
When I teach students about strategic differentiation, I simply ask them to choose a niche and look at the SERP through that niche’s eyes. A serious suburban gardener, for example, has any number of criteria completely ignored by these advertisers, including:
- Safety and sturdiness
- Adding fans and grow lights
- Swapping glass for screening in the summer
- How to determine which greenhouse will work for their climate and hardiness zone
- The technical support they can access while constructing the kit
Rich folks looking for outdoor sun rooms that beautify their gardens have a completely different set of criteria (I’ll let you brainstorm those on your own).
And so do preppers, and parents of young children (remember the gruesome greenhouse murder scene from "The Hand that Rocks the Cradle"?), and small-scale farmers who need to justify every purchase on an ROI basis.
For Each Keyword, Choose a Niche
Once you’ve identified the niches, choose one for each important keyword in your account.
If you can’t decide, run an A/B/C/D split test, with each ad speaking to one of the potential niches. Tally up the results to see which niche is biggest and most responsive.
Empathize with Your Niche
What questions do they have? What features and benefits are most important to them, and why? What preconceptions and objections do they project onto this search?
If you already serve this niche, you might already know the answers. Calling on existing customers is a great way to do market research while reminding them of your existence and demonstrating that you care about them.
If you aren’t familiar with this group, spend some time on blogs and forums and following Twitter feeds to get to know them.
Study the SERP
Look closely at your competitors, both paid and organic. Where do they connect with the needs and desires of your chosen niche? Where do they miss the mark?
Which are the best ads for this niche? What are they doing well? How can you improve upon them?
Write Ads for Your Niche
Using the existing ads as a jumping-off point, write new ads that clearly signal to your ideal prospect that you are thinking of them. In the greenhouse kits for suburban gardeners example, this might mean including a “USDA Hardiness Zone guide to greenhouses” or offering a “free 24/7 installation hotline.”
Test the Ads
Put your market insight to the test and measure both click-through and conversion rates for your ads. You may find that click-through rate (CTR) drops from your control ad, since you’re no longer targeting the big undifferentiated market, while your conversion rate increases, since you’re disqualifying those who aren’t going to buy from you anyway.
Make sure your attention to a given niche is deeper than just your ad. If you send suburban gardeners to a page that isn’t optimized for their criteria and concerns, you might as well not bother.
When you stop viewing competition through a blood and guts lens, and instead take a cue from nature, you can cut through the clutter even with limited resources. The big mind shift required is a willingness to serve a few people extremely well, rather than serving a lot of people in a mediocre fashion.
At that point, you may find the SERP full of potential business partners rather than cut-throat competitors.
Upcoming Webinar: PPC Pause and Reflections for 2013
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