1. Davis Baker | @DavisBaker
PPC Team Lead | Forthea Interactive
Behavioral Economics & PPC
Using Searcher’s Irrationality In PPC
2. Who Am I?
• Professional Background:
– SEM for 7 years
– PPC Team Lead @ Forthea Interactive
– Clients include: CenterPoint Energy, Cemex, Toshiba, Intel
• Inspiration:
– The classics
• Outside the Office:
– Running, dirt bikes, hiking, camping, Texans, Astros
– COFFEE.
3.
4. What the heck is it?
Behavioral Economics
What the heck is it?
Behavioral Economics
10. How To Apply Social Proof
• Make the user feel like they’re not the only one making this choice
• Show them directly how many people have chosen their product or
service
• Show them that experts are making that choice and recommending
it
• Use the rating and review extensions within the Adwords interface
• Create a feeling of envy
15. How To Apply Scarcity
• Communicate time sensitivity and product
quantity. Convey the point that this deal won’t
last long
• Make the user feel a sense of urgency using
words like “hurry”, “only” and “ends soon”
• Utilize the ad customizers and countdown
features in Adwords (Matt’s about to drop some
knowledge!)
20. How To Apply Anchoring
• Set the value with an anchor. Give the users a
number or piece of information they can latch
on to
• Create an environment where B always looks
better than A.
• Always promote the original price with the sale
price
• Offer a lower price than your competitors
25. How To Apply Framing
• Frame the product, service or proposition as a
gain or loss
• Use absolute numbers instead of percentages
• Think like a lawyer or car salesman – present
the facts in the best possible way
• Break down the cost of a product
28. PPC Text Ad Application
Social Proof: How can I make the user feel like they’re not the
only one making this choice?
Scarcity: How can I communicate time sensitivity and product
quantity?
Anchoring: How can I convey the benefits compared to the first
piece of information received?
Framing: Can I frame the product, service or proposition in the
best way possible?
29. Closing Thoughts
“Our irrational behaviors are neither
random nor senseless- they are
systematic and predictable. We all
make the same types of mistakes over
and over, because of the basic wiring of
our brains”
- Dan Ariely
– Ogilvy, Burnett, Trott, Abbot & McElligot – To me, they’re responsible for most creative and effective advertising. I try to find ways to implement their strategies to my sem campaigns
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Before we jump into what behavioral economics is, I want to talk briefly about classical economics.
Let’s take a step back and talk about classical economics. CE is a theory that says we are rational – we make well thought out decisions and aren’t influenced by any outside factors
Enter BE – BE says that people are irrational – our brains are hardwired to be influenced by outside factors and biases.
It isn’t anything new, it’s been around for a couple of decades, but I feel that as PPC experts, we don’t utilize it enough.
What I want to talk about today with you all is how behavioral economics affects the digital decision funnel and how its principles can be applied to PPC ad copy
Now, there are dozens of BE principles, but there are four that I felt were especially applicable to PPC strategy
Websites like groupon, living social and woot.com are goldmines for BE. Multiple principles in play at once.
Here, they’ve used social proof by showing that “over 1000 people have made this purchase” – When your brain sees this, it thinks, “geez, 1000 people can’t be wrong!”
When applying social proof to ad copy, you want to ask yourself – “how can I convince the user that they aren’t the only ones facing this decision or making this choice?” How can I get them to feel envious?
Here on the left I have generic ad copy – on the right I have, in the same ad group, a text ad with social proof applied.
On the top right
In the middle
Bottom right
Most of the time, social proof has to be done manually. However, social rating and review extensions do a great job at assisting with social proof.
When applying social proof to ad copy, you want to ask yourself – “how can I convince the user that they aren’t the only ones facing this decision or making this choice?” How can I get them to feel envious?
Here on the left I have generic ad copy – on the right I have, in the same ad group, a text ad with social proof applied.
On the top right
In the middle
Bottom right
Most of the time, social proof has to be done manually. However, social rating and review extensions do a great job at assisting with social proof.
What scarcity does is tap into the condition in which our wants appear to be greater than the resources
We place a higher value on an object that is scarce, and a lower value on those that are abundant
We love to feel like we got something special that not many other people can get (limited quantity)
When applying social proof to ad copy, you want to ask yourself – “how can I convince the user that they aren’t the only ones facing this decision or making this choice?” How can I get them to feel envious?
Here on the left I have generic ad copy – on the right I have, in the same ad group, a text ad with social proof applied.
On the top right
In the middle
Bottom right
Most of the time, social proof has to be done manually. However, social rating and review extensions do a great job at assisting with social proof.
So what I asked myself when implementing scarcity was “how can I convey time sensitivity or limited quantity? How can I get the user to feel a sense of urgency?”
So when does a $50 bottle of wine seem like a great deal? When it’s next to a $75 bottle. However, that same $50 bottle looks like a crazy high price when next to the $10 bottle of wine.
This technique is known as anchoring. It hits on our tendency to rely too heavily on the first piece of information we see. Often times, the anchor isn’t even relevant – it’s completely arbitrary. As consumers, we latch onto the first price or piece of info we see and compare everything that follows to it.
Restaurants are notorious for their use of anchoring. They intentionally place an outragiously high priced entrée at the top of a menu. That was everything beneath it looks like a great price.
Orbitz.com has done a great job at using the $110 price point as an anchor, that way $49 seems like a good price. You can’t afford to NOT move forward with this purchase!
When applying social proof to ad copy, you want to ask yourself – “how can I convince the user that they aren’t the only ones facing this decision or making this choice?” How can I get them to feel envious?
Here on the left I have generic ad copy – on the right I have, in the same ad group, a text ad with social proof applied.
On the top right
In the middle
Bottom right
Most of the time, social proof has to be done manually. However, social rating and review extensions do a great job at assisting with social proof.
As you create PPC ads with anchoring, you want to give the users something they can latch on to. Give them a comparison where B looks better than A
Would you rather take a pill that has a 90% chance of keeping you alive or one that has a 10% chance of killing you?
Framing describes that our choices depend on how the problem is presented
In other words, it’s not what you say, it’s how you say it. I know a lot of married folks in here probably know a thing or two about that.
Is the glass half full or half empty?
Two identical cartons of ice cream.. 1 label says 80% fat free other – 20% fat.
99.999% of us would choose the one on the right – who the heck wants to eat 20% fat?
When applying social proof to ad copy, you want to ask yourself – “how can I convince the user that they aren’t the only ones facing this decision or making this choice?” How can I get them to feel envious?
Here on the left I have generic ad copy – on the right I have, in the same ad group, a text ad with social proof applied.
On the top right
In the middle
Bottom right
Most of the time, social proof has to be done manually. However, social rating and review extensions do a great job at assisting with social proof.
With these ads, I asked myself “how can I present this information in the best way possible?”
How can you, as a ppc expert, unleash your inner behavioral economist?
When applying these four principles to your ad copy, ask yourself the following questions -