Analyzing PPC Verticals: Health & Supplements

This week Matt Umbro (@Matt_Umbro) came up with yet another great question set titled “Analyzing PPC Verticals: Health & Supplements.” The following is the transcribed Streamcap from the live chat:

Q1: What makes the Health & Supplements vertical so competitive?

  • I would say margins – many products are low cost, but bids are extremely high. – Matt Umbro
  • High margins, unending customer base, always a new wave to ride. – Jesse Semchuck (@jessesem)
  • Pharma clients have deep pockets & bid high. Also, navigating the AdWords policies makes “good” kw hard to find. – Theresa Zook (@I_Marketer)
  • HIPAA requirements are a huge obstacle, if you deal with Personally Identifiable Information (PII). – Andrew Miller (@AndrewCMiller)
  • I don’t see the books, but I have a suspicion that it is an extremely lucrative venture. High profit margins and there is increased interest in natural remedies lately so also high demand. – Kirk Williams (@PPCKirk)
  • At a guess high lifetime value if the customer reorders. – Josh Devlin (@JayPeeDevlin)
  • Competitiveness is attributed partly due to volume of approved keywords,knowing that the Pharmaceutical Industry is regulate. – Juan Restrepo (@juanrrestrepo)
  • Bids are high because of LTV. Many of the products aren’t a single purchase. They need to be taken monthly. – Jesse Semchuck
  • There seems to be a huge demand and a lack of product-loyalty. People are eager to try new “solutions." – Amy Bishop (@Hoffman8)
  • The two supplement companies I (barely) worked with had lots of outside funding. They have the capabilities to spend a lot. – Joe Martinez (@MilwaukeePPC)
  • Profitability, growth, and sheer volume of interest. Affliate marketers entering early. – Travis Phipps (@phipps)
  • Bundling is huge. Why buy one when you can buy a 3 or 6 month supply at a lower cost? Increases LTV. – Jesse Semchuck
  • It also has a fairly low barrier to entry. Can’t really “patent” things like “garcinia” supplements. – Bryant Garvin (@BryantGarvin)
    • Yes, anyone and their mother can sell these products. – Matt Umbro
    • True. I can name 5 manufacturers for garcinia right now with a 100 bottle minimum order. – Jesse Semchuck
  • 1st mover advantage. A product’s lifespan is usually super short, so you gotta be aggressive early. Think Pharma penny stocks. – Aaron Levy (@bigalittlea)
  • People assign high value to personal health & very emotional. Great sales opportunity. – Robert Brady (@robert_brady)
  • There’s also a ton of upsell potential. Vitamins, workout DVDs, meal plans, anyone? – Amy Bishop
  • Low regulation i.e. anyone can get into the game. Even my face has been slapped on brands I never used. – Nicole Mintiens (@Tregesy)

Q2: What are some strategies that have worked well for you in the Health & Supplements vertical? Why?

  • Customer testimonials are key. I would venture to say that testimonials actually trump price. – Amy Bishop
    • Only to some extent. you REALLY have to sell WHY your product should cost so much more than 90% of the others. – Bryant Garvin
      • I think they key is having “previous customers” sell it for you but there’s only a certain amount that can bridge. – Amy Bishop
  • Bundling 3, 6, even 12 months into a package. Duplicating those bundles as Amazon child items. – Jesse Semchuck
  • Getting a competition cost baseline, then adding 50% to the cost and selling product purity and high quality packaging. – Jesse Semchuck
  • Slightly shady but have found “long form personal blog” style sites can really perform well.. especially with a great domain. – Bryant Garvin
  • Well, if medical procedures count: Heavy Display, Targeted Audiences, Huge AOV, Ridiculous Volumes of Traffic. – Travis Phipps

Q3: How do you deal with (constant) disapprovals in the Health & Supplements vertical?

  • Keep resending for approval, maintain contact with Google rep, watch the ever-changing disapproval list. – Kirk Williams
  • Following guidelines and reviewing prior approved ads (both my own & competing ones). – Juan Restrepo
  • In reality it slows down ad copy testing & makes having an “engine” rep that much more valuable. – Bryant Garvin
    • Great point – I wouldn’t envision running an account in this industry without a dedicated rep. Though I’m sure they get mad when I email everyday about it. – Matt Umbro
  • Look at what competitors have gotten approved and steal some strategies/inspiration. – Margot da Cunha (@ChappyMargot)
  • Try, try again! .. and again.. and.. again. – Amy Bishop
  • Spend enough so that your Google rep will change your ads to the allowed copy for you. – Jesse Semchuck
  • Constant comm w Google Rep. Anyone have ideas for Bing? I’ve had serious probs in this vert & others. – Travis Phipps
  • Like disapprovals in any vertical. Apply for a waiver if I disagree. Lots of things don’t get approved, tho. Frustrating. – Theresa Zook
    • And lots of things that get approved, only to later be disapproved. Frustrating. – Amy Bishop
  • The feed disapprovals are the biggest pain in the ass – when it goes down it takes at least 3 or 4 days to get back up. – Matt Umbro

Q4: Specifically across this vertical, how much emphasis do you place on text ads (vs. remarketing, PLAs, etc)? Why?

  • Like with many ecomm clients, PLAs still cost less than text ads in both time and budget and perform better. – Matt Umbro
  • Only for medical procedures (not supplements), surprisingly 75% Display. No PLA, 25% Search (not enough volume). Lead Gen rules. – Travis Phipps

Q5: What advice would you give a potential client in this vertical who wants to start running a PPC account?

  • You had better be one guy doing this, bc if you have any overhead you could be crushed overnight by a rule change. – Jesse Semchuck
  • Carefully monitor the pharma list – even potentially create a script to review your site for disapprovals. – Matt Umbro
  • Expect constant road-blocks & disapprovals. Just the way it is. – Kirk Williams
  • To do LOTS of research and perfect their account structure before running. Also consistent monitoring is critical. – Margot da Cunha
  • Diversify your product set. The hot trend will not last. Hope for an Oz rerun on your product. – Jesse Semchuck
  • Bring lots of $, test like crazy, and increase CLV or AOV. Focus on CRO. – Travis Phipps
  • Don’t expect clarity from engines on disapprovals/flags. They’re cloudy by design. – Aaron Levy
  • Expect to lose money all through Q4 in weight loss. – Jesse Semchuck
  • New Year’s is a HUGE rush in this vertical. Don’t let the numbers surprise you Q2-Q4. Playing off of seasonality. – Travis Phipps
  • If you are going to bid on more general terms (ie: weight loss pills) – have an EXTENSIVE list of negatives. – Matt Umbro
  • Focus on quality of product. Word will get out if you are shipping shit in a bottle. – Jesse Semchuck
    • Yes! Your agency is there to promote your solid product. We aren’t there to lie for you. – Kirk Williams

Q6: Knowing what you know about this vertical, would you take on a client in this industry? Why or why not?

  • Probably not. If they knew what they were doing and had budget, maybe. – Jesse Semchuck
  • Honestly, I don’t now, & don’t think I would. Lots of extra time/energy for a solo operator. – Kirk Williams
    • I’m right there with you – I always cringe when there are sales calls in this industry. – Matt Umbro
  • Yes, but I would make sure the client knew (and paid for) the extra time it would take to manage disapprovals. – Matt Umbro
  • Yes, if they committed to a LT contract & had plenty of $$ for testing. Of course, great product or service. – Travis Phipps
  • I honestly wouldn’t be in a hurry to chase one down. There seems like better uses of time elsewhere. – Kiko Correa (@obiwankikobi)
  • The thing that sucks the most is that you have to do so much admin and are less focused on strategy – not fun. – Matt Umbro
  • Probably not. I’m a one-person shop & don’t have time to babysit anything this time-intensive. – Theresa Zook
  • Never say never, but I’d want to make sure I had the time for a roller coaster ride. – Aaron Levy

Q7: Have you found specific paid platforms produce better results in this vertical? If so, which ones and why?

  • Perfect Audience allows for health retargeting on the FBX, while Adroll does not allow these type of products. – Jesse Semchuck

Resources

More PPCChats

Don’t forget to stay tuned for the next #PPCchat on Tuesday at 12 noon Eastern, 9 am Pacific and 5pm in the UK. Same Chat time, same Chat channel.

Participants

Check out the PPCChat Twitter list to see and connect with all current and prior participants.

• Matt Umbro (@Matt_Umbro)
• Paul Kragthorpe (@PaulKragthorpe)
• Aaron Levy (@bigalittlea)
• Amy Bishop (@Hoffman8)
• Andrew Miller (@AndrewCMiller)
• Bryant Garvin (@BryantGarvin)
• Jesse Semchuck (@jessesem)
• Joe Martinez (@MilwaukeePPC)
• Josh Devlin (@JayPeeDevlin)
• Juan Restrepo (@juanrrestrepo)
• Kiko Correa (@obiwankikobi)
• Kirk Williams (@PPCKirk)
• Margot da Cunha (@ChappyMargot)
• Nicole Mintiens (@Tregesy)
• Robert Brady (@robert_brady)
• Theresa Zook (@I_Marketer)
• Travis Phipps (@phipps)
 

Analyzing all PPC Verticals, via Streamcaps

This is a guest post by Paul Kragthorpe; works at WebRanking in Minneapolis, Minnesota.
Connect with Paul @PaulKragthorpe, and Google Plus.

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