Mikkel deMib Svendsen and I had an interview in which we discussed PPC and SEO. At my site, you can read part 2 where we cover SEO business models. Below, we discuss PPC. I try to discuss arbitrage thinking that the father of blackhat PPC must do PPC arbitrage (he's too smart a businessman, as it turns out), and we get a view into the mind of one of the search marketing world's leaders. (The repeated PPC questions were not because I'm stubborn, but were rather drafted and emailed; it wasn't a "live" interview.

How did you get into PPC?

It was just a very natural extension of my work with organic SEO. When GoTo.com came around as the first successful PPC engine, I think most of us (the first few SEOs there was) jumped on it.

What was the most useful learning resource for you on PPC?

Clients! It's through the actual work and experimentation with the systems that you gain the real insights. Of course, there are plenty of great blogs and forums around where a lot of interesting PPC ideas are discussed but not one that I would say is the one most important resource. It's all just great inspiration - the real resource is the work you do and the testing you are willing to go through.

What distinguishes your approach to PPC from other people's approach?

I am not sure my approach is particularly unique, but it is an approach very similar to how I manage organic: I do what's right for the client and project I work on - not what other people tell me is right or wrong :)

What are the most difficult fields in PPC and what makes them the most competitive?

More and more verticals are seeing an increase in competition. There are a lot of good PPC-optimizers out there that fight for their accounts - in any way they can.

Each vertical has its own set of challenges. For some, like the antivirus market, one of the challenges is the enormous amount of completely new keywords that appear each month - keywords you won't even find in historical keyword databases (the PPC engine's own or services like Wordtracker) because they are so new - and you can't even grab them using any sensitive kind of broad matching. For other verticals, the problem can be that it is polluted by too many small companies with too much VC money to burn without focusing on ROI.

Do you do any PPC arbitrage?

No, I have faster ways of making more money with less risks :)

What are the essential problems you need to solve to succeed in a PPC arbitrage campaign?

I don't care :)

Do you prefer any parking providers for PPC arbitrage, or do you use content pages with Adsense/YPN slapped on?

I usually do not keep much more domains on stock than what I actually use :)

I'm personally buying specific keywords [...]

I don't do arbitrage ... :)

Is there a minimum spread you look for between keywords[...]

I don't do arbitrage ... :)

How deep do you split up adgroups?

It all depends on what clients pay us to do. There are no set rules.

How far down the longtail do you go in buying keywords?

Again, this is totally up to each client - some only focus on top 10 keywords, and others take it all. Anything in between. There is never one solution that works for all.

With regards to PPC arbitrage, [...]

I don't do arbitrage ... :)

What do you think of PPC to CPM arbitrage?*

I don't do arbitrage ... :)

Do you think that PPC to CPM model [...]

I don't do arbitrage ... :)

Should CPM advertisers try and cut out the middlemen by publishing their own content and buying ads like that?

That depends on where you think your time is best spend. My time is better spent on other things than being an ad-salesman :)

* PPC to CPM arbitrage is largely done through buying content network clicks and directing them to big publishers (I mentioned it on YOUmoz, in my earlier post on a failed PPC arbitrage experiment). Essentially, the publishers have a fixed value for each page view and just need to get a non-bounce visitor to their site to accrue a pageview. The conversion doesn't require any action from the visitor beyond clicking the ad and not bouncing until the full page loads. 

For example, the National Post might go off buying a 10 cent click to bring the visitor to a story framed by ads that generate 50 cents in ad revenue.

The math heads amongst you will probably be asking who in the world can get a 50 cent pageview - this amounts to $100 CPM! Well, for starters, some media sellers have an answer:

"I am a media seller and lets not forget a full page ad in MAXIM Magazine for one month goes for $100K and a 30 second spot on CSI-Miami runs around $250K. So that $300K facebook sponsorship has an eCPM of $12 MAXIM's has a $50CPM and the CSI Miami spot would be a whopping $150CPM.The FACEBOOK sponsorship is high value and a cost effective medium."

 Then consider that most of these PPC-CPM arbitrage sites aren't counting on a single ad-block to sell for $100 CPM. There's usually something like three ads per page, plus text links, Adsense, etc.

In addition, making 50 cents in CPM advertising off a visit doesn't necessarily mean just getting one page-view. Most large publishers interlink their content so that a visitor will often read a couple of related stories.

Let's say, for argument's sake. that a site averages 2.5 page views/visitor, with three CPM ad blocks/page. In effect, each average visit is going to trigger the display of 7.5 ad blocks. Divide $100 CPM by 7.5 and you get $13.33 - you would need to sell your CPM ads for 13 dollars and 33 cents each to achieve the $100 [total] CPM. It's the total CPM or aggregate CPM number that counts. And while $13 is a bit expensive by some standards, it's obviously well within reach.

On a related note, while we're on the topic of advertising,  did I mention I popped my conference speaker cherry at FacebookCamp Montreal with a presentation on Facebook Advertising? (Special thanks to Valleywag for a lot of excellent content on Facebook.) And of course, much thanks to Mikkel for the interview! If you read Danish, check out his markedsføring i søgemaskiner blog !