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Things are changing a lot in the search ad arena. There is a steady ongoing shift of traffic from organic to paid search. You can’t fight it. Any profitable searches are going to be bought by competitors if you don’t pay for them. And increasingly that also means customers searching for brand terms and coupon codes for your site are getting directed to other sites where you’re losing some sales. There's no longer any question of whether you should be using PPC, or even whether you should bid on brand terms. You must. Paid search is going to become a bigger factor in your success going forward than it has been in the past. It’s critical to get it right.

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Google recently deployed another stealthy change that will have a mixed impact on the performance of countless ecommerce merchants. Your shopping ads are going to start showing on YouTube and Discover (an Android app), even if you didn't select that option.

Now, I love Google. But I do wish they would be a bit more transparent when they opt all of their customers in to new features that cost them money. This change hasn't been very well communicated, other than some hyped-up announcements back in May about new features coming soon.

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Direct response advertising through Google Ads probably has an ROI greater than any other investment opportunity available to an ecommerce merchant. It’s far greater than most people realize. The real return on investment is obscured by the way traditional cost accounting records the transactions and reports on them on a monthly basis. It’s easy to get distracted by tax accounting rules and forget the fundamentals of solid financial decision making.

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Fundamentally, with pay-per-click advertising, the idea is to balance the cost per click that we’re willing to pay with the profit per click that we expect to achieve. As advertisers, we attempt to find the right level of spending that maximizes the business profit. And since every business is dif...

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In a word, “No!”

In two words, “Hell no!"

In eight words, “No, because of the law of diminishing returns."

Here’s why…

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