July 13, 2011
Case Study

Analytics-Driven Marketing: Putting an engineer in charge of PPC ads reduces cost-per-lead 37%

SUMMARY: Because of the sheer volume of data they produce, PPC ads lend themselves to a great deal of metrics analysis. Everything from information about clicks to ad performance numbers can be obtained on a real-time basis.

In this unique case study, learn how an engineering- and analytics-driven SaaS company took a counterintuitive approach by putting a software engineer in charge of its PPC campaign and created a Director of Marketing Analytics role.
by David Kirkpatrick, Reporter


Pay-per-click ad campaigns were an important part of lead generation at Smartsheet, a software-as-a-service (SaaS) company with an online project and work management tool.

Although its numbers were solid, the company desired more from these efforts. They wanted metrics that tracked the value of different campaigns through the sales cycle that could provide performance numbers illuminating what worked, and what didn't work, with its PPC ads.

Learning what worked with PPC campaigns could improve those important lead gen results, and tracking each ad through the pipeline would provide ROI data to justify future ad budgets.

Finding more traditional PPC efforts lacking, particularly in data collection and analysis, Smartsheet went in a completely new direction and hired one of its internal engineers to take over the PPC function.

In next week’s issue of the MarketingSherpa B2B Marketing newsletter, we'll take a look at specific tactics used by a PPC ad manager with a software developer's background. This week, let's look at the "why"s and "how"s of Smartsheet's decision.

You may not want to take such a drastic step with your own PPC function, but this case study offers insight into how an engineering- and analytics-driven company views PPC execution and defines its success.


The entire idea of changing the role of managing PPC ads at Smartsheet was started by its management simply wanting more detailed metrics on the performance of each ad campaign.

Step #1. Understand there is more science than art in PPC results data

Brent Frei, founder and Executive Chairman, Smartsheet, said the company was getting more than 35,000 people to sign up for a trial version of its product each month, with a significant portion of this number coming from its PPC ads. PPC ads make up less than half -- still a significant percentage -- of Smartsheet's lead generation, so completely rethinking its PPC function was a business gamble.

He said the company looked to catch prospects searching for specific keywords around its business area, such as:

o Project management tool
o Simple sales pipeline
o Event management

- What works vs. what doesn't work

The company's PPC ad campaigns were handled by its marketing team. By using Web tools, the team knew where those clicks were coming from, and why they arrived at the website. However, the marketing team was, as Frei put it, "just watching the numbers," and not doing any deeper analysis beyond the number of leads generated and website traffic information.

By only looking at these limited metrics there was no understanding about what was, or was not, working in PPC campaigns. Management knew with the wealth of data coming in for each campaign, questions about performance should have corresponding answers.

- A new approach for more results

The decision was made to tackle the PPC effort in an entirely new way, from how the marketing team had been developing and tracking each campaign. Frei stated that the company couldn't tell why things were working, and what changes made a difference in the performance of PPC advertising.

"That was the initial impetus for us sitting down and thinking that we had to approach this a little differently," he explained.

Step #2. Define the role for managing PPC ads

Once the decision was made to take PPC ads in a new direction, management put together a list of attributes they sought in an ideal candidate:

o No preconceived notion about the approach. This ruled out classically trained marketers.

o Needed to think "like a chess player."

On this Frei said, "They needed to think about 'How will I test down many paths at the same time?' and how each path has its own branches that can occur until really we are oriented around A/B testing in multiple dimensions."

o They had to be a "data jockey," to understand data arrays and analysis.

o They had to be technically savvy.

These four attributes led Smartsheet to one conclusion.

"So when we laid those things out -- no previous position [in marketing], a chess player data jockey and technically savvy -- that was effectively almost exactly the senior developer criteria," Frei explained."And we just thought, 'Hey, it's definitely worth the try.'"

The new PPC position even acquired a new job title in the company, "Director of Marketing Analytics."

Step #3. Find the talent

Because Smartsheet was an engineering- and analyst-centric company, it decided to look internally for a candidate to fill the new position and handle the PPC campaigns.

Management posted the job specs through a simple internal email and was quickly approached by one of the company's best developers -- the employee management was targeting for the job, Todd Jones.

Frei said Jones had been instrumental in the distribution side of Smartsheet's business, and he felt Jones enjoyed the opportunity of seeing his work directly affect the bottom line.

Jones, now Director of Marketing Analytics at Smartsheet , came to the job with 12 years of experience adding new features to existing products and welcomed the new position as " very interesting and very different."

"Something that I sometimes miss from the engineering side is the progress of when you are actually building something tangible and seeing the action of people getting to use it for the first time," Jones explained. "But, this is totally different. It is analytical, and is contributing a lot to the success of the company."

Frei mentioned one negative about hiring Jones to take over PPC ads -- losing one really good developer.

But he added, "[That move] has been more than made up for in revenue generation so I don't know that we look back and say that there was any downside."

Frei also stated, in terms all too familiar to marketers, that Jones accepting the new position was "going over to the dark side."

Step #4. Make the change immediate and complete

Because the idea was to take PPC ads in a completely new direction, Jones assumed responsibility over the entire function as soon as he was hired for the new position.

And because the original impetus for the change was management's desire for deeper metrics, Jones' first task was to benchmark PPC data and track campaign results through the sales cycle. Where Marketing had been providing monthly numbers on the different campaigns, management now wanted to know when those leads turned into revenue.

"It was a pretty hard cut-over," stated Frei. "Many people who had found you in January didn’t actually become customers until February or March or April. So we needed to build the waterfall analysis that led back to the leads we originally paid for and generated in January."

Once this analysis was complete, Jones began making decisions on what was working, per the job specs, and begin testing different elements of the ad campaigns.

Frei said Jones was to, "just try a bunch of things, see what works out and just 'pour gas' on the ones that do."

"The new position was really exciting in the beginning," Jones said. "Seeing great results at the beginning of a test and watching the numbers converge as you get more sample size."

Step #5. Use analytics to shorten the learning curve

This focus on hard numbers and analyzing metrics helped shorten Jones' learning curve in the completely new position.

From management's perspective, it took Jones about three or four months to really get a handle on the new job. At that point Frei said, "He has just been expanding the footprint of what we advertised and the depth of it."

Jones credits his quick start to having plenty of useful data to analyze provided by online tools.

He said a "good portion" of his initial learning came from heavy use of an online ad analytics tool to quickly see what was going on with ad performance and to begin what he described as "contextual targeting."
He began tracking every change made to an ad, and when, in his words, "something happened and the numbers went down," Jones would immediately undo the losing change and begin new campaigns.

He also used a testing and optimization tool to run tests on campaign landing pages by continually modifying losing pages and starting new tests while retaining constant tracking within the system.

Describing pioneering the Director of Marketing Analytics position, Jones said, "I mean I didn't really know what I was doing, but when you have concrete numbers to grade you, you quickly get pointed in the right direction."

Both Smartsheet's management and its engineer-turned-PPC marketer are pleased with the move.

From the top floor, Frei said simply, "We think we were brilliant," when describing the company's big takeaway from this decision.

Jones said he enjoys the opportunity to have an influence over the larger direction of the company beyond his previous role of adding features to existing products, and actually seeing his contribution to the bottom line.

In the two years since Jones took over the PPC function, the basic numbers support Frei's opinion:

o Paying customers per month attributed to PPC has increased by 2,900%.

o The above number was partly driven by a bigger budget for PPC. But that is part of the success story too, since the company now had a stronger analysis to justify investment. Metrics showing PPCs impact on ROI led to a 1,400% increase in the PPC budget.

o Even with the increased budget, PPC cost-per-lead is down 37%

Smartsheet's against-the-grain approach in this PPC campaign paid off with some significant numbers. Be sure to read more unique and successful case studies each week by subscribing to the MarketingSherpa B2B Marketing newsletter.

Useful links related to this article

1. Internal email with PPC management job specs (subject line: "helping out in marketing")


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