RLSA for Competitive Markets: A Ridiculously Awesome Way Forward in PPC

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Paid search is a pretty awesome channel. Obviously, I’m a huge fan – I built a company around it. But it’s not without its challenges.

For one, as the chart below illustrates, the cost per click (CPC) in certain highly competitive verticals can get super expensive – we're talking more than $100 per click in some cases, for industries like law and finance:

RLSA top CPC ads on Bing

(This is Bing data, but it’s a similar story in AdWords.)

Another challenge is that conversion rates really haven’t changed much in 15 years, whether you're selling washing machines or alarm clocks. It's around 2.5 percent.

Finally, we know that desktop search query volume peaked in 2013 and that more searches are happening on the smaller, more competitive screens of mobile devices.

As marketers, we want to get more for less. We want more conversions and we want them to cost less so we can maximize our profits, right?

I frequently get emails like this:

Larry, how do you make money with PPC today?

If my cost per click goes from $1.50 to $4 with a Quality Score of 9 or 10, and it takes 75 to 100 clicks to make a sale, the cost of acquisition goes from $150 to $400. I can’t believe I’m the only one in this boat!

Is there a way we can overcome these big challenges – knowing that in the near future search inventory will remain flat, CPCs will keep being expensive, and conversion rates won't change? Can businesses in competitive industries stay the course? Is there a way we can turn this ship around and make sure we get more for less?

Will RLSA Save the Day?

With RLSA – remarketing lists for search ads – you tailor your paid search campaigns based on whether users have previously visited your website (or app) and which pages they viewed.

So is RLSA the superhero technology we've been waiting for? Let's look at some data.

RLSA vs non-RLSA campaign data

In this account, we can see two campaigns that have the exact same keywords. It's just that one is targeted to existing site visitors (through remarketing) and the other is targeted to new visitors.

Notice how the RLSA campaign has a third the cost per conversion ($36 vs. $100)? That's because that audience is already familiar with your brand.

See how the click-through-rate (CTR) for RLSA is double (4.8 percent vs. 2.2 percent)? That's because they're familiar with your brand.

And notice how the average CPC for RLSA is about half as expensive ($1.45 instead of $2.80)? That's because of the higher Quality Score (in turn because of the higher CTR).

This is all very interesting. You have this technology that basically lets you find the conversions and clicks from people who are going to click through at twice the rate, half the costs, and triple the conversion rate.

RLSA unicorn fighter

Awesome, right?! Well…

RLSA May Be Super, But It's No Hero

There’s one problem: RLSA doesn't create new volume. It actually cuts volume substantially. You're only getting about a tenth of the volume.

And to make things worse, if you look at the previous month, RLSA added nothing in terms of total conversions (245 this month vs. 250 last month).

RLSA disappointing

Looked at in these terms, RLSA is kind of a shell game. It's segmenting the cheap conversions out of a bucket of conversions that used to include both cheap conversions and expensive conversions.

You're just cherry-picking the 10 percent of cheap conversions out of the pile you would've gotten anyway, and looking at them in isolation. It's all well and good to get those conversions, but you're still basically stealing all the cheap conversions from your existing campaigns.

While this may be interesting if you're limited by budget (e.g., you only have $100 to spend), most marketers want to see more quantity at better costs. RLSA delivers on cost savings, but it actually cuts down on the amount of conversions. It's almost like all you're doing is applying a repeat visitor vs. new visitor segmentation on your conversion set.

So what’s a marketer to do?

The Ridiculously Awesome New Way Forward

So we all know the issues with RLSA.

The problem with RLSA

But what's the solution?

What follows won't be a solution for everyone. This applies only to certain verticals that have very high CPCs where there's a lot of competition and where conversion rates are challenging. This strategy will be especially game-changing if you’ve got a small marketing budget and you want to make sure that budget goes as far as possible.

The crazy new idea is to only do RLSA and completely forget about doing unbranded vanilla search ads.

Then, use the power of social media ads to dramatically – I'm talking 10x to 100x – increase the size of your cookie pools. If you can increase the size or your remarketing pool by 10x, then it stands to reason that you'll get 10x more conversions. That means instead of getting only 10 conversions, you'll get 1,000!

How Do You Get More Conversions on the Cheap?

Well, lucky for you, the WordStream team (including yours truly) has shared plenty of tricks to help you master social media. Check out these articles:

One of my favorite tips: If you promote a unicorn (a piece of content that gets ridiculously high engagement), you'll get a really low CPC and a high amount of free clicks, so that you can actually get hundreds, thousands, or even millions of visitors for very small spends of $500 to $1,000.

How RLSA works

The reason RLSA works is because people who are familiar with your brand are biased. They want to believe in your brand.

So later, when the need arises, they'll either do a branded search, in which case you win, or they'll do an unbranded search, but will be much more likely to click on your result in the SERP, because they've already visited your site and your brand has name recognition. This is how you reap the benefits of RLSA.

Here’s the trick: If you reduce or totally eliminate the budget for non-RLSA campaigns and put them toward feeder campaigns for your RLSA audiences, then you actually get the best of both worlds. You're going to have:

  • A higher quantity of conversions.
  • Higher click-through and conversion rates.
  • Lower costs-per-click and costs-per-action.

Crazy Insane or Insane Crazy?

This process might seem a bit counter-intuitive. It's almost like a strategic realignment for certain verticals. Call it Larry's Operation: Unicorn Surge!

RLSA UNICORN SURGE!

We're shifting unbranded search campaigns toward social campaigns that will build the audiences who want to like you, so you can drive more cheap RLSA conversions through search.

Is this crazy? No!

There are people who do display advertising and just don’t do any interest- or demographic-based targeting or managed placements (where you specify certain websites you want to target). Rather, they do Google Display Network advertising exclusively using remarketing.

Why? It's because the ROI for remarketing-targeted ads is so much higher than interest and demographic targeting alone. Those are much weaker signals.

So all I'm suggesting is that you do the same thing with search!

Just target your target audience (e.g., wealthy people, who live in a certain neighborhood, who own a boat, who are Republican ­– or whatever it is). Target them with social ads. Bias them so they'll search for your stuff. You'll still be competing with other businesses for that search, but now you'll have a HUGE advantage.

RLSA Deadpool approved

The Future of Paid Search

Despite all the obvious challenges posed by click prices, conversion issues, and inventory concerns, I've never been more excited about future of paid search. These new technologies and targeting options provide a tremendous amount of leverage to PPC marketers.

In you’re in a super-competitive vertical and you don’t have a huge budget, unbranded vanilla search is a rat race, if not a suicide mission. Where's your edge? You're just one of seven companies – and I don't like to play games with money unless I have a ridiculously unfair advantage.

Wouldn't you much rather play a game where the odds are rigged in your favor? RLSA is basically printing money.

RLSA is awesome

While RLSA in itself won’t give you much leverage in most cases, RLSA campaigns have HUGE potential when they’re coupled with a viral marketing strategy that has the capacity to dramatically increase the size of your cookie pools. Big cookie pools will give you the power to make the most of RLSA.

People too often obsess about small changes and little tricks that might increase results by 5 percent. Depending on your niche, what I've outlined in this post could be totally transformative for your business.

Are you ready?

 

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Comments

Davorin Cernoga
Jun 08, 2016

So, what you are saying is that instead of spending money on "vanilla" search campaigns you are now spending that same money on social "marketing activities"? Let us say that you have 100 units of money. Until now you spent it like this: 50MoneyUnits on "normal search" campaigns + 50MU on RLSA. Now you spent it like this: 50MU on RLSA, 50MU on social. Is not that the same thing - from client perspective (from invested money" perspective)?
And what if you actually spent more on social (to get more cookies ;) than on adwords?
And what if you spend even more MU on RLSA and same on social (50MU on social + 100MU on RLSA = 150 MU)
This looks like "I want to show how good adwords are, even if I need to turn one blind eye on same spending (shifting of spending?) on social" thing...
Just my 5 cents...

Larry Kim
Jun 08, 2016

well there's a lot here. let me see if i can unpack this.

1) it would be hard (though not impossible) to be in a situation where you were spending 50/50 RLSA vs. Regular AdWords since the RLSA volume is generally going to be much smaller than the regular campaigns.

2) the assumption of this post was that it would be much cheaper to get cookies from social than search ads. remember, this strategy is for ridiculously expensive keyword verticals.

thanks.

Utpatti
Jun 10, 2016

I have been reading out many of your stories and it’s clever stuff.

Larry Kim
Jun 21, 2016

lol thanks

Corey Zeimen
Jun 13, 2016

You can actually market content in one search ad, and do a more direct offer on RSLA, I have had a lot of success doing this specifically in competitive markets.

Larry Kim
Jun 21, 2016

sure. and that's kind of how google suggests using RLSA (to vary your ad copy and bids). and yes, it makes a small difference in ROI. but i'm suggesting an even bigger way of using RLSA in certain situations (like high competition, low budget) is to skip the non-RLSA campaigns altogether.

kentmere
Jun 21, 2016

Hi Larry,
I really like your post, I run RSLA with the same goals
I see results different from yours.
- 2X CTR as you
- 3X CR as you
- I see also 2X CPA
I use rlsa targeting 90 days website visitors.
What do you think? should I have 30 days website visitors as target?
thank you,
kent

Larry Kim
Jun 21, 2016

i do not understand how increasing conversion rate by 2x can lead to doubling of Cost Per Action. (mathematically impossible). Regarding your remarketing audiences, you can have say 7-day, 30 day and 90 day remarketing audiences, or whatever makes sense for your business. it doesn't make sense to just have one remarketing duration for all prospects.

kentmere
Jun 22, 2016

Hi Larry thank you for quick reply.
my RLSA campaings have a + 50% bid adj using the target and bid setting. So the CPC is consistently higher.
Regarding the 3 segments would you have the same campaign triplicated with audience 7 days, 30 days , 90 days and each one is excluding the other audiences?
To clarify:
- campaign A target audience only new visitors
- campaign A RLSA target audience only 7 days visitors excluding the other audiences
- campaign A RLSA target audience only 30 days visitors excluding the other audiences
- Campaign A RLSA target audiences only 90 days visitors excluding the other audiences

Thank you,
kent

Asg
Jun 23, 2016

Wouldn't money have to be spent on PPC for RLSA to be generated? So I didn't understand how PPC expense is being saved.

Rob
Jun 25, 2016

The idea is if you have a set budget, say $5000 a month and a very expensive niche, say insurance where it's $25 / click. At most you can drive 200 new users to your site. However if you put half of that ($2500) into Facebook ads that are $0.50 a click for example, you can drive 5,000 new people to your website, build your remarketing list, then if any of those people search for you on adwords you are going to capture them with the remaining $2500.

It's an interesting strategy, but is highly dependant on how relevant the users you are driving from social to your website end up being.

kentmere
Jun 24, 2016

Hi Larry,
Could you please provide a feedback on my question above?
Thank you!
kent

Julien Hamerlinck
Jun 27, 2016

Hi Larry,

Interesting read. I think the strategy of completely cutting the adwords prospecting budget and reallocating it to a social channel is quite rigorous. Especially because you are going to target people who not necessarily have a purchase intend or interest in your product at all. Of course this depends on your targeting setting. In contrast, search (nonbranded) prospecting campaigns, assuming you have relevant keywords, target users who are at least somewhere in the buying-cycle. Hence, I believe that the quality of the cookie-pool generated with search campaigns will often be higher than a cookie-pool generated with social campaigns. Again, this depends on your targeting methods and keywords. This can greatly affect the effectiveness of your RLSA campaigns. Having said that, I do think it's worth testing with allocating with part of the budget to, for example, a 1-week large social-campaign to generate a big traffic boost and evaluate the effect on RLSA campaigns. What might be nice to add as a strategy is to create a specific RLSA list that capatures all traffic deriving from social campaigns (e.g. url contains utm_source=facebook_...).

Phill
Jul 01, 2016

To dramatically increase the size of your cookie pool means that many of them will be low quality and the strategy won't work. Btw what about the infantile unicorns, I thought WordStream is mainly for serious marketers?

Elisa Gabbert
Jul 01, 2016

You can set your targeting parameters through social ads so that the audience is qualified.

James Veillon
Aug 06, 2016

When someone from an RSLA list searches on a particular keyword then the quality of that prospect shouldn't be a surprise. RLSA searchers show the same intent as all other non-RLSA searchers. Put another way, the low quality cookies would perhaps never search on your RSLA keywords.

Dan Perach
Aug 30, 2016

this article gets my vote for most innovative out of the box thinking, truly a disruptive strategy. Kudos Larry for coming up with such a bold and innovative strategy!

I'd call this a tactical nuclear weapon if we're talking about the nuclear option, ie. turning off all ppc to save money.

This method, shifting budgets towards cheaper social cookies and following up with rlsa on adwords search/shopping is a rad concept.

Robert
Sep 13, 2016

Hi Larry,

I always to love to read your articles and they keep me up-to-date. But with this article I have some thoughts. You say: "RLSA delivers on cost savings, but it actually cuts down on the amount of conversions.".

Why is RLSA cutting down on conversions? The way I see it (and understand it) is that in stead of paying $2,80, you are paying on average $1.45 for a conversion. Like you said RSLA is all about lowering your costs and not for increasing conversion. But I don't see how it cuts DOWN on conversions.


Robert
Sep 28, 2016

I am still very interested in your reaction

Elisa Gabbert
Sep 29, 2016

Hi Robert, in the "it's no hero" section Larry explains what is going on here -- RLSA campaigns generally drive FEWER conversions because they are cherry-picked out of your regular campaigns.They are very cost-effective but low-volume.

greg florez
Jan 24, 2017

Great read. Really affirmed I'm on the right path. First of the year integrated my tags for FB / Google and RSLA campaign is the final piece. Keep you posted. Thank you for the insightful article.


Greg Florez
Founder
Sol Solutions

Anthony
Feb 01, 2017

I work in the legal vertical and our RLSA's often get disapproved for certain legal services, i.e. Bankruptcy, not for the ad copy, but because Google won't allow a "collective list" to people that could potentially be taken advantage of.

Have any experience with this?

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