Interview with PPC expert Alan Rimm-Kaufman

It is a privilege to count among our “Cool Friends” Alan Rimm-Kaufman, who leads the paid search marketing agency Rimm-Kaufman Group.

Alan gets around. He’s a regular speaker at SES, DMA Annual, ACCM, Shop.org, eTail, NEMOA, and DMD NY conferences. He writes the internet retailing column for Catalog Success. He’s quoted in the media, including Business Week, and The New York Times. And he’s a Fellow at the University of Virginia’s McIntire School of Commerce and guest lectures there.

Alan wasn’t always agency-side. Prior to founding his firm, he was the VP of Marketing at Crutchfield, where he helped grow Internet revenues over 450% to $80 million in 2002 and helped earn Crutchfield “best of the web” commendations from Time Magazine, Internet Retailer, BizRate, Forbes, US News & World Report.

So this is what Alan had to say in an interview with me (Stephan Spencer, founder and President of Netconcepts):

What are the biggest problems facing online retailers in relation to paid search? Is it click fraud or something else? And how does one effectively deal with that problem?
The biggest challenge (and opportunity) facing retailers in Paid Search is complexity and the speed of innovation. The industry is changing so quickly — new ad formats, new engines, new platforms, new feeds, new pricing — every week brings new innovations, more options, more complexity. Google raised the bar when it comes to rapid innovation. Retailers and agencies alike need to scramble every week to keep up.

And I don’t see this trend slowing — if anything, it may be accelerating. If you’re into thinking about future, check out Kurzweil’s The Singularity is Near. While Kurzweil is writing about technology as a whole, I think his core observation — that the rate of change itself is speeding up — applies fully to online e-commerce and online advertising. Expect to see as much innovation in the next 2 years as we experienced in the last five.

Great point. I love Kurzweil’s writings and have warned those who will listen of the rapidly accelerating rate of change. Now, what are a couple of examples of common mistakes that companies make when they enter into the paid search arena and what are a couple of examples of mistakes that seasoned companies make?

Typical mistakes made by newcomers to paid search include using an insufficiently large term list, not understanding the strengths and limitations of their tracking systems, not customizing copy to match the search phrase, not having a firm grasp of their online acquisition economics, and not bidding wisely.

Typical mistakes made by more experienced search marketers include not separating their brand from their non-brand results in reporting and bidding; not understanding the (non)incremental value of their affiliate programs; mishandling dayparting; and overbidding on broad generic terms.

Can you describe an ‘Aha!’ moment you had, something that was like a paradigm shift for you?

I enjoyed (and recommend) John Battelle’s book, The Search. I think Battelle’s “Database of Intentions” concept is critically important to us as marketers, but also to us all as citizens. I had an “Aha” moment when I spent some time surfing leaked AOL search logs. Those logs show first-hand the tremendous power of click streams to track and understand our individual and collective thinking. Search is an amazing technology, a total paradigm shift for advertising and for society.

You have a pretty interesting scientific background that includes complex mathematics. Can you tell me how that comes into play with what you are doing now? I know, for example, we have had some stimulating discussions about graph theory and how that relates to SEO.

Yes, I happily survived (!) a PhD in optimization and statistics at MIT, ihtfp. That background provided me the mathematical chops to contribute much of statistical & optimization horsepower supporting our bid management platform. I also enjoy collaborating with academics to increase our collective understanding of online marketing. We have some great collaborations going with professors at University of Rochester and University of Santa Clara. I also like working with our team on internal studies (for example, see here). And like all good SEM firms, we do a tremendous amount of ongoing staff training on search, marketing, statistics, and web tech, the teaching perspective I picked up while serving as a graduate teaching assistant come in handy.

Describe a huge win that you have recently achieved for a client.
This year we helped a Fortune 500 retailer nearly double their tracked direct sales from PPC while simultaneously increasing their ad efficiency by 28%. We,re managing about 250k active terms for them, spending about $250k/month non-peak. Going in, we knew they weren’t advertising efficiently and were certain we could really increase their efficiency and profits. We didn’t expect our efforts would drive top line as well. Very happy client, happy agency.

Can you describe the significance of the initiative you started with standardizing shopping search feed formats? That is a pretty important initiative and I am sure our readers would love to learn more about it and where things are at.

I got really fed up with the comparison shopping engine mess last year. Why do these engines all require almost identical data in different formats? Why don’t they support Unicode and foreign characters? Why do they make extracting detailed cost data (by URL, by day) so difficult, frustrating retailers seeking to optimize their campaigns? Working with the great folks at ARTS and the NRF, along with representatives from the engines, agencies, and retailers, we’ve crafted three feed formats to simplify this whole situation. The specs were released earlier this month and we,re starting to get some traction. More here, get involved!

You used to work client-side for Crutchfield.com. How has that helped you be more effective on the agency-side now?

Great question! I still feel like a retailer, even though I’m wearing a vendor hat these days. My retailer background (VP Marketing, Crutchfield) taught me what it means to have to make every ad dollar pay. It also taught me what I liked and disliked about client-vendor relationships. At our firm we,ve tried to adopt all the “likes” and avoid all the “dislikes”. We take a retailer-friendly approach: high transparency, easy-out contracts, fair and straightforward pricing, no commissioned sales people, etc. I don’t think I’d have that view if I hadn’t been on the other side of the desk for five years.