Pubmatic released a report covering the massive drop– Q408 average CPMs are at 26 cents.  Before folks claim economic peril, let’s consider a few other factors.  The mix of inventory for ad network has shifted dramatically to social, which has historically terrible CPMs.  From a weighted average perspective, it’s hard to say exactly the impact, but we know that 4 of the top 10 sites out there are now social and that social traffic recently passed adult as the largest category.  And the reason that social network have bad traffic is not necessarily because of a young demographic.  The more pages that users consume on a site, the lower the frequency they click on ads.   If heavy users are consuming 60 to 100 pages per day on a social network, as opposed to 6 to 10 pages on other sites, you cannot expect ad clicks to increase in linear proportion to pageviews.

What I’d like to see is gross earnings by site quarter over quarter.   Internet advertising is such that we have a growing audience of users consuming more pages per session– thus CTR will continue to slide.  And if revenue per click is constant, you can’t help but see eCPM (what publishers are earning per thousand impression) and CPMs slide.  My hunch is that gross earnings per site are flat, as opposed to down 50%.  Falling CPMs is both normal and good.

Have you seen YSlow? It is a Firefox plugin that extends Firebug’s functionality to show some interesting information, such as page load times, and the heaviest parts of the site. You can use the information gathered to increase performance on your sites. Here’s an 8 minute video presentation on YSlow by Jeremy Zawodny, who was at Yahoo! when I was there.  BlitzLocal.com, which admittedly a work-in-progress, scored only a 64.  Humbling, as are the scores of many of the sites that we know and manage.  If you already have Firebug and like it, then you’ll love Yslow.

I said “suck” above to get your attention. There are many ways to suck– your product or service sucks, your design sucks, your customer service sucks, or whatever.  But you should never suck because your site loads slow or has coding issues.

Update: Perhaps the most common culprit we see that is an easy fix is to not compress images.  That will often balloon the page to 1 MB.

How about making a resolution to not make any more resolutions? Seriously, when you example instances of when people fail versus succeed, a few key traits stand out. I’ll explain at the end of the article– but first… I read a study where patients were told by their doctors that if they didn’t stop smoking or change their diets that they had months to live. The doctors explain what their patients would experience with heart disease, lung cancer, and other complications over the remaining months if they didn’t drastically change. You know what happened?

In the majority of cases, people didn’t change. You would think that would be a wake-up call, if any. But a factual recitation about how smoking causes lung cancer is something we, as intelligent human beings, all know. Yet folks smoke anyway. Or they overeat at meals, overspend their credit line, choose bad boyfriends, and make a host of irrational decisions. Why do they fail here, even when literally threatened with a life and death situation?

They make a public commitment, they involve friends in achieving their goals, they have specific goals in different timeframes, they connect emotionally with their goals, and they have a feedback loop. Incidentally, aren’t those the same characteristics that make videos games highly addictive? Aren’t those the same dynamics that cause folks to spend hours on Facebook or (insert your favorite social media site here), coming back day after day? Imagine if you could harness that same level of dedication and enthusiasm in your job, your diet, or any other goal you want to achieve?

How about for the low, low price of $1,995? No, how about just $599 if you act in the next 30 minutes? Operators are standing by now. How about actually for free with no strings and no free set of Ginzu knives? The answer is sparkpeople.com. Sparkpeople.com is a community for folks who want to achieve their fitness and life balance goals. And with great fitness comes success in all other aspects of your life. This site hits upon all the game dynamics mentioned above. Chris Downie, who founded sparkpeople.com originally as a weight loss site, had the community of enthusiasts to prove it.

Instead of the traditional monthly attrition rate of 35% that you see in most programs, he’s less than 1/10th that rate. I had the pleasure of meeting Chris several times, as he explained these motivation principles to me– and it’s amazing how many people he’s been able to help because of this. Look out Tony Robbins, here comes Chris Downie! And what a humble fellow he is. He walk the talk with his own lifestyle. It reminds me of the obese CEO of a famous athletic shoe company or the CEO of a major search engine that didn’t even have a computer their first year. If you want to spark your lifestyle into success into the new year, tap into SparkPeople.com to make losing weight and getting fit as fun and addictive as Facebook.

The dirty secret of PPC is that for every one unit of effort you spend in gathering keywords, you’d probably need to spend 5x that effort in ad copy and 20x that effort in great landing pages. I have NEVER seen a client who only needs PPC, despite what they say. And it’s not about– when you have a hammer, everything looks like a nail!

Thus, the $200 a month in PPC will be accompanied by a ton of effort in analytics, SEO, landing pages, etc..
And we can demonstrate an amazing case study showing XXX% ROI from only $200/month. It may be somewhat dishonest, but then again– where does PPC really end?  And when do stats not lie?

With distributed campaign management, you divide into functional roles– pure PPC (keywords, ads, bids), landing pages, analytics, engineering. Rare is the person who has the skills to cross all these disciplines– any more than creative people do math well.

For some Fortune 500 clients of ours– for example, Quiznos and Analog– we do have multiple people on PPC, because we divide by product lines and by language.   But for these little clients– you basically have to break out your team into functional specialists. And for each client, you designate a SPOC (single point of contact) who serves as a team lead, gatherer of content/requirements— and can make sure that the Unique Selling Proposition (USP) of the client is reflected across the keywords, ads, landing pages, and eventual conversion event.

As to what clients to take on:

• they have a great product/service: great marketing can’t fix a bad product– can’t make chicken salad out of chicken shit
• they have the time and energy to assist: you need their content and to be able to clearly reflect the USP to convert.
• no internal nonsense: no protective webmaster who won’t give access, family member who is emotionally tied to the current design, etc…
• growth potential in short run: they currently have horrible marketing and don’t have a long sales cycle or ultra high product value (low data rate).

Did you know there is a web 2.0 conference in India?  Our friend Vivek Bhargava, CEO of Communicate2, had kindly arranged for us to be there in Bangalore.  Looking forward to seeing how Indian companies adapt and sharing what we do in the United States.  Moreover, we’ll try to adapt the small business marketing concept of BlitzLocal.com to the Indian markets.

Update: Because of the Mumbai bombings, the conference was cancelled.  But I still got to hang out with Vivek of Communicate2, as well as Sameer Jain of Net Solutions India. We see Facebook as the new frontier of PPC.  To show that we eat our own dog food, see the Dennis Yu Facebook profile page to read more.

We’ve got over 100 projects in our Basecamp– and that makes for potentially messy project management.  Basecamp doesn’t allow you to group projects together, except under companies.  So our workaround was to create companies named “Non Profit support”, “Tier 1 Clients”, “BlitzLocal Platform”, “Cosmetic Surgeons”, and so forth to bucket projects together.  On the plus side, it does organize projects into nice indented groups.

But then I took a tip from how we name our campaigns and ad groups inside AdWords Editor– to prefix the names of these items to force them to sort in the vertical hierarchy on the left.  You see, in AdWords, we can force sort campaign names by calling them 1_[theme] or 2_[theme] or 3_[theme] to group by priority and by head or tail.  

Same thing with our project names in Basecamp.  I hope this helps those of you with a ton of projects in basecamp– or perhaps too many ad groups and campaigns to manage in AdWords.  I’d give you a screenshot, but I think you get the idea here.  Sometimes the simplest tricks are the most effective– the ones that require zero programming.