Updated: Doh! It’s on Tuesday, 9/13/11

Next Wednesday, 9/14/11, I will be conducting a free webinar on the top 11 AdWords Mistakes as part of my Market Motive PPC class.

What I find top mistakes lists are useful for are learning what you don’t know so that you can focus on the areas where you can improve your PPC campaigns.

I often talk to advanced marketers who are unaware of modified broad match or aren’t using the display network properly. The webinar will be geared to all experience levels.

This workshop will cover the top 11 mistakes in about half an hour; and then we’ll leave plenty of time open for Q&A afterwards.

You can register for the webinar here.

I hope to see you there.

The Advanced AdWords Seminar for success tour will be stopping in Miami, October 11 & 12, 2011.

Our events have been selling out recently, so if you want to attend you should register early.

Learn more about the AdWords Seminars.

Register for the Miami AdWords Seminar.

The AdWords Seminars have been a huge success over the past few years. But instead of me prattling on about how good they are, you can see what other’s have had to say:

 

Can’t Make it to Miami?

Here is the advanced seminar schedule for the rest of 2011:

• Seattle – September 22 & 23
• Philadelphia – September 28 & 29
• Miami – October 11 & 12

You can see the curriculum and learn more about the seminars on our AdWords Seminar Event page.

 

 

Read Attendee Testimonials

First, I flew down to your conference in Houston not really having any expectations on what I was going to learn in a one day seminar over something that has paralysis by analysis written all over it like Adwords. However, I feel afterwards, it was one of the most positive and understandable conferences that I have ever attended.

You did a great job in explaining and relating the information into a plan that even an amateur like myself can understand. I have taken a lot of the information and began to implement the ideas into actual measurable results.

I just wanted to send you a note in appreciation for your time and thank you for all the information that you provided. I hopefully will get to goto another seminar in the future.

Neal Freeman, Catalog/Assistant eCommerce Manager, Dallas Cowboys Merchandising

Read the rest of this entry →

Over the past several years, I have done numerous case studies with companies looking at the differences in their paid traffic when they also rank organically for a term.

In this column, I’m going to share some of that data and walk you through some simple calculations you can do to see if you should buy that keyword.

Running Your Own Experiment

When running your own experiment, you need two sets of numbers:

• Your traffic information when you are only in organic
• Your traffic information when you are in both

This is a very easy experiment to run, just follow these simple steps:

1. Find a term you rank number one in the organic results
2. Add that keyword as an exact match negative in your paid search account
3. Benchmark the results over a week of time
4. Buy that same keyword for a week
5. Compare:
   • Click through rates for your paid traffic
   • Organic referrals
   • Conversion rates

The length of time you need to run these tests depends on how much data you receive based upon budgets and click volume. If you have a small to medium budget, you might want to buy keywords for a week, stop for a week, buy keywords for a week, stop for a week and then aggregate all the results.

If you have a larger budget, and the search volume and conversion rates are fairly static, you might just run each test for a week of time.

As with any testing, the more data you have, the more confident you will be in the results.

The final analysis is to examine your revenue for each time period to see if your total revenue is higher for one period than another. Of course, subtract your paid search marketing costs from your revenue to see accurate pictures.

Profit Results

For this company, we ran several tests across various time frames and keywords. The results were fairly similar for almost every test we ran. Here are the results for one keyword:

In this case, you should be buying the PPC keyword as when you do, you pay $3422 in PPC costs, but that additional spend results in $7,395 in additional profit.

Over all the tests I’ve done, in the vast majority of cases (but by no means all) being in both the organic and paid results at the same time was a good idea.

I have seen some cases where it was not a good idea to buy PPC when you rank organically from a profit standpoint (there are other reasons to do it such as demand generation). Generally I see that happen for keywords that are early in the buying funnel and they are not high converting keywords, but more awareness and interest focused keywords.

What About PPC Cannibalization?

Another common complaint about buying paid search when you rank organically is that you will end up paying for clicks you would normally have received for free.

Again, some math can solve this problem. In the first example, we did examine the cannibalization number. The keyword we choose had consistent week over week referral and conversion information. There was some variance, but it was less than 10% over the past 3 months. To give SEO the most credit possible, we looked at the highest referral week in the past three months.

We then calculated the maximum ‘cannibalization’ clicks at 1,421 clicks. During that time frame we received 4,123 paid clicks. Therefore, even if we had removed all of the ‘other clicks we paid for and shouldn’t have’; paid search added another 2702 total clicks to the website. However, that number wasn’t one to really focus on. The concept to focus on was: the revenue was higher when both SEO and PPC were running.

Does SEO & PPC Convert the Same?

One of the advantages of paid search is that you can create dedicated landing pages that are solely designed for actions. This is not possible (or at least very difficult) with your organic efforts.

Another big question is: Does SEO & PPC convert the same?

The answer is: it depends.

I hate that answer as much as you do; but it’s necessary. The reason? It depends on the landing page and ad copy.

I was working with a large company that uses a lot of whitepaper download lead forms. Their marketing and design departments did not want to create PPC only landing pages because they already had lots of lead forms across their SEO pages and didn’t think it was necessary to duplicate their efforts.

The whitepapers were targeted to very web savvy audiences (like you reading this column) that knew the difference between organic and paid traffic. Since the audience understood the difference in traffic source, they didn’t think there would be any advantage to creating dedicated landing pages.

They had even done a test to see if there was a conversion rate difference being in both SEO & PPC. Here were their numbers:

This wasn’t a big difference in overall conversion rates based upon their traffic source (similar or same keywords). In fact, often I see larger conversion rate differences when you are in both SEO and paid search, which is often called the ‘halo effect’. Most likely their audience did know the difference between PPC and SEO and therefore the halo effect did not kick in as much to this type of an audience. However, I still thought they should test the difference.

Personally, I dislike when marketers say, “I think….”. I try to tell myself that whenever I say that I should stop thinking and start testing. Not every thought is correct and only testing will give you a good answer.

After a while, I convinced them to stop staying ‘I Think’ and to create just one landing page focused purely on conversions. We removed most of the navigation, focused on some bullet point benefit statements, and a simple lead capture form. Here’s what happened:

Even web savvy people enjoyed the conversion focused landing pages. They might be able to tell the difference between organic and paid search; but in the end, they do convert better with conversion focused pages.

The Lesson

In many cases, it is worth buying keywords even if you rank organically for them. Just create a simple experiment following the steps outlined above. If your total profits are higher when you are buying the same keywords – then keep buying them. If your profits are lower (and you are not buying words for other reasons), then do not buy them. It really is that simple.

However, creating dedicated landing pages is often a good idea – no matter the sophistication level of your audience. With SEO, your pages must have certain elements to rank well. With paid search, you can purely focus on conversion actions and not have to worry about a search algorithm’s opinion of your site.

Just remember, don’t just think about what you should or should not do: test your hypothesis and let the numbers tell the story.

We’re teaming up with SMX to conduct a one day intensive AdWords training course before the conference starts.

If you live in the NYC area and want a solid day of training – this is perfect.

If you’re going to be at SMX East; come a single day earlier and leave with a lot more knowledge about the intricacies of Google AdWords.

The event will take place on September 12th, and the Sheraton in New York City.

Here’s all the good details:

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Even with all of the new marketing channels that have opened up over the years, AdWords is still the core of many companies interactive campaigns. If your PPC campaigns are not running efficiently, it can have a drastic impact on your bottom line.

Join Brad Geddes for a full day of AdWords education and discussion that will teach you not only the best practices, but also advanced concepts and strategies that are based upon a decade of research and testing.

What Will I Learn?

Comprehensive Keyword Research: The absolute center of every PPC campaign is keywords. Learn the effective methods to discover and research keywords. While keywords are the lifeblood of PPC, perfecting your match types usage while controlling your negative keywords can drastically increase your overall revenue.

Writing Compelling Ad Copy: You will learn how to sync your ad copy with both your keywords and buying cycle stages.

Ad Copy Testing: Testing ad copy is essential to any AdWords account’s success. You will takeaway several ideas for ads to test by the time you leave the session.

Demystifying Quality Score: Quality Score has a larger effect on your account’s visibility than any other setting inside of AdWords. Quality Score can be a challenge to increase. Receive step-by-step instructions in how to prioritize Quality Score improvement, and what actions to take to increase your Quality Scores.

Increase your Reach Through the Google Display Network: Consumers spend about 5% of their time with the search network. The rest of their time is spent on content sites. Learn how to effectively reach users beyond search with contextual ads, placements, and enhanced campaigns.

Control Your Ad Display with Location Targeting: Do you think that geographic targeting isn’t relevant to a national business? Think again! Whether you are a brick and mortar local business, or a global e-commerce site, learn how geographically targeted campaigns can create additional connections with searchers.

Increase Your Landing Page Conversions: The first impression to a potential customer is the landing page. With only a few seconds to engage the buyer this may be more important in your conversion funnel than anything else. This section of the course will not only go into best practices and usability, but how to test landing pages in a simple and effective method.

Networking Opportunities: Conferences are fantastic places to network and meet fellow practitioners of online marketing. Lunch will be provided so you can spend time getting to know your fellow attendees.

Who is Brad Geddes?

Brad Geddes is the Founder of Certified Knowledge, a company dedicated to consulting, educating, and training marketers on Internet marketing theory and best practices. Not one to hold secrets, Brad is a prominent educator in the PPC industry.

• Google Certified AdWords Trainer
• Author of “Advanced Google AdWords”
• Host of Marketing Nirvana on Webmaster Radio
• Internationally recognized speaker
• Trained more than 10,000 businesses on AdWords
• Columnist for Search Engine Land
• Founder of Certified Knowledge
• Worked with companies with budget ranges from $17 month to millions each month
• Has worked with Red Lobster, Encyclopedia Britannica, Yahoo, Google, Amazon, YellowPages.com

 

Past Training Video Testimonials

How to Register

If you would like to attend the Advanced AdWords Training @ SMX East you will need one of two passes for SMX:

• Workshops: September 12
• All Access Pass + Workshop

More Information:

• Learn about SMX East
• Register for Advanced AdWords Training
• Learn more about the workshops

Please Note: This is a one day event that is a partnership with SMX. This is not the same as the AdWords Seminar for Success. This is one day event that is jammed pack full of information in a short amount of time. Please come ready to learn.

Let’s talk about bidding, and a strategy to aggressively compete for your keywords. Specifically, by bidding heavily out of the gate ads can be positioned highly, enjoy a higher click through rate, enabling a higher Quality Score. This is referred to as a “Positive Spiral” since a series of events are setup that enable future successes.

The bids are what they are based upon your Quality Score, level of competition, as well as the historical performance of the keyword across all past advertisers. The Quality Score, the only lever that can really affect it, is based upon the landing page relevancy to it & the speed it loads, the performance (CTR), and bids.

Budgets should not determine the bidding strategy. Instead budgets should be used to determine the scope. If, very budget conscious, go after very specific traffic, looking for pockets of highly qualified searches that also drive volume. This will enable advertising targets to grow and bootstrap future efforts.

The two scenarios below outline how initial bidding approaches can impact your account costs down the road.

Scenario 1: Nickel & Dime to the Top

Many times new advertisers will want to dip their toe in, and set low bids and see how they do. After doing a number of searches after it goes live (and probably not clicking on their ad) they start to wonder why they show up low or not at all. They then go back into AdWords and raise their bids, maybe from $0.15 to $0.25/click.

They do some more searches and see themselves more often, but still at the bottom of the page. So, they go back in and raise it to $0.30, a nice whole number. More searches, but the same story. So they go back and decide to get aggressive, $0.50 – a half dollar every time some clicks on their ad! They are now in the middle of the page and someone even saw them second one down on the right one time (Position 5). With a sense of accomplishment and an eye on their wallet, they relax; brew a cup of coffee, and move on to something else.

A couple hours later they go and check in and see a Below First Page Bid of $0.65 and shake their heads, curse greedy Google and set’s the bid. In a few minutes they see their ad showing up again and leave for the night. The next day another message: Below First Page Bid of $0.75, they see some activity over the night, so decide to raise it to $0.85, hopping over what Google suggests.

Later in the day, they see their average position of 4.8 and with the other metrics encouraging decide to get aggressive, $1.50. This sits for a day and their average position climbs up to 3.2; they do searches and see themselves in #2. They get a number of clicks, with an Average CPC of $0.90.

Then, just before they leave for the weekend they check in and see Below First Page Bid of $1.65. Now they are starting to feel gamed, but want to see what happens over the weekend, so they set it and let it simmer until Monday. Within the course of a week, a bid that started off at $0.15 had increased more than 10-fold! This is the quintessential “Negative Spiral” since the early bidding did not drive the performance that raises a Quality Score.

Scenario 2: Heavy Handed Leverage

The next week the advertiser’s leading competitor saw the new ads when they did searches and decided they had to get into the PPC game. They go after the same keywords, but take a different approach.

They see their competitor’s ads already listed so they want to blow them out of the water. They set $2.00 bids and immediately find their ads in the first two spots. Traffic is flowing and even though the bid is $2.00 they notice that click prices are much lower, around $1.00.

With the high position they enjoy high click through rates giving them a more favorable Quality Score (assuming their landing page’s speed and relevancy to their targets are equal to the competitor in the first scenario). Based upon the positive history that is being built up, bids can be lowered slightly, and over a period of time, the same position can be awarded.

Now, the Caveats

There is certainly a hard floor for each position, and bidding down too aggressively can and will probably see the position drop dramatically. The performance metrics are what drives all of the residual benefits, so if a lot of qualified traffic is attracted, be sure to convert them! Churning and burning is what Google expects with aggressive bidding and they will gladly raise the bids up if you are “wasting space” at the top of the results. This is an aggressive, but subtle tactic to maximize long term investment in proven search channels.

This is not the only bidding tactic that can be successful, and it is usually used after an account has aged for a bit and successful keywords or the potential for success is apparent. Optimizing downstream and will help reinforce the investment. I also suggest launching this in a new campaign, so some of the historical impacts can be limited.

If starting an account and want to find the early opportunities, I suggest reviewing the terms in the landing page title and header tags to convert them in to phrase match keywords. Create ads that highlight specific value props, setting the appropriate expectations. Bid moderately-aggressive and convert the terms to either modified broad match or exact (with appropriate ad group distribution) based up on the level of competition and quality of traffic. This will provide a good lay of the land.

I also recently wrote an article on Optimizing PPC Budgets, which reinforces some of the theories here. Also, every Tuesday at Noon EST Matthew Umbro host’s #PPCChat on Twitter, where PPC experts answer probing questions around a particular aspect of paid search.

If you have some successful bidding strategies, please share them in the comments.

Chris Kostecki is the Search Analyst at Keurig Inc. manufacturer of the revolutionary single cup coffee brewer, part of the Green Mountain Coffee family. All views he expresses are his own and do not necessarily  represent the views of any entities he is associated with. Follow Chris on Twitter to keep up with the latest trends in Search Marketing.

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Opinions expressed in the article are those of the guest author and not necessarily Certified Knowledge. If you would like to write for Certified Knowledge, please let us know.

Ad Click :

Number of times a particular ad is clicked.

Ad Views :

Also known as impressions. The number of times an ad is viewed by a browser. If an ad is blocked by a firewall or web filter and not seen by the consumer, but the browser attempted to attain the information, often the ad is considered viewed even though it was not.

Bandwidth :

The amount of information that can be sent at a time through an Internet connection. This is often also referred to by a host ISP as how much total information can be sent in a month from your website to visitors to your website.

B2B – Business-to-Business:

This often refers to a retain business working with an advertising or e-commerce business.

Banner :

An advertisement on a webpage, similar to a yellow page ad, except it usually contains a link to the advertising page.

Broad Keywords:

These are very general keywords that are searched often. Many times are searched for information purposes as much as purchasing reasons. For some sites and keywords, these can convert well enough to have a positive ROI, but in general they don’t have the conversion rate of the other keyword types. (i.e. travel, real estate)

Browser:

The program used to view WebPages. (i.e. Netscape, Internet Explorer, Opera)

Browser Caching :

Often a browser will store WebPages in temporary folders on your computer to aid in surfing speed. When someone revisits your webpage and they have a cached version, they will view the old page instead of the new one (there are some metatags and browser settings that will prevent this) leading to your website being undercounted in total page views and visitors.

Click :

When you right click on a hyperlink or follow a link to another webpage you have “clicked” the link.

Click Through :

Most often referred to as a percentage. The amount of times an ad or link was viewed and then clicked on. If an ad was viewed 100 times and clicked on 10 times its click through rate is 10%.

Cloaking:

Also known as a Cloaked Page or a Stealth Page. This

Cookie:

A small text file placed on your hard drive to store information about the site you visited. They usually have two purposes. One is to track visitors and how often they come back to a webpage or how long they stay on a website. The second is to store your preferences about a website so when you revisit the site your preferences are viewed instead of that websites default view.

CPC – Cost per click:

Often referred to for PPC accounts. It is the amount of money paid each time a visitor clicks on a link.

CPM :

Cost per 1000 impressions. This refers to ad impressions and how much it costs the advertiser every time an ad is displayed 1000 times.

Direct Keywords:

These keywords are directly related to your products or services. They usually include a descriptive term. These keywords make up the bulk of most campaigns, and usually have a positive ROI. They are not searched for as often as broad keywords, so sometimes a campaign can be helped by the increased exposure from broad keywords. (i.e. Mexico travel, Pennsylvania real estate)

Domain Name :

The Internet address of a website. For example, iDjinni’s domain name is www.idjinni.com.

DTC – Direct to Consumer:

is a term often applied to advertising targeted at consumers and not businesses.

Doorway Page:

Also known as a Gateway page, it is a page specifically made to rank high in search engines. There are legitimate ways to use this technique (see FAQ Do we use Doorway Pages). Often pages made with Flash coding or a lot of Java are unindexable by search engines and thus need a corresponding page for search engines to index.

E-mail :

Also known as electronic mail, it is the transmission of a file from one communication network to another. It is the most common form of communication on the Internet.

Flash :

A type of coding generally used for animated graphics.

G:

Short for Google

Hit :

Each time a page is loaded, it receives one hit. If a page contains two images, the server logs will indicate one page and two image hits. This is used to measure the amount of traffic pages receive.

Host:

A machine that is connected to the Internet. It usually refers to a machine that “hosts” or contains code or programs that are accessible by others connected to the Internet, the most common code or program is a webpage.

HTML – Hyper Text Markup Language:

This is the base language used to build WebPages.

Hypertext:

Also known as a Link, it is text or an image that can be clicked on to call up another document or another section within the same document.

Impressions :

This often refers to every time an advertisement is viewed. When one document calls for an ad to be viewed (usually weather is it actually viewed or not) one impression is recorded. See also CPM.

IP Address – Internet Protocol Address:

Each machine connected to the Internet has its own address reflected in numbers. For ease of use, most people use a domain name instead of the IP address. However, over time these terms have been mistakenly interchanged.

ISP – Internet Service Provider:

This refers to a machine that provides people a way to connect to the Internet. When you dial into the net, your modem is connecting to your ISP. Once you are connected, you can access the Internet.

JAVA :

A general programming language, similar to C++ developed by Sun Microsystems. It can be used to add various features to a webpage when viewed through a JAVA enabled browser.

JAVA enabled browser:

Referring to a browser that supports the JAVA language. Some browsers need a special plug-in to allow JAVA to be viewed. Also, when changing the security functions of a browser, you are often changing if JAVA can be viewed by your browser or how the JAVA language is handled.

Keywords:

Words entered into a search engine to form a query.

KW:

Short for keywords

Link :

Refers to Hypertext, it is text or an image that can be clicked on to call up another document or another section within the same document.

Log File:

A file that contains information about past actions. The most commonly referred to Log File is whenever a webpage is viewed the hosting machine logs the documents that are requested.

Meta Tags :

HTML coding that gives information about a webpage.

Negative Keywords:

These are filtering words. If your keywords contain a negative keyword, and that word is included in a search term, your ad will not show. (i.e. If your Google AdWords keyword list looks like:

Blue Widget
-fuzzy (the – sign meaning negative inside an AdWords account)

A search done for blue widget would show your ad, a search for green blue widget would show your ad, but a search for fuzzy blue widget would not show your ad because it contains a negative keyword.

Niche Keywords:

These keywords are highly specific, but have low search rates. They usually have the highest ROI and conversion rates among all keywords in a campaign. Often, there are not enough niche keywords to only rely on these to make up a campaign as there just are not enough searches done in a month for them to sustain a business. They are a nice addition to direct keywords as they usually have a lower bid price. (i.e. Mexico city vacation packages, Philadelphia real estate)

Opt-in:

Usually referring to e-mail, it is when permission is given to send e-mail (often newsletters and email advertisements) to a specific email address.

OV:

Short for Overture (now called Yahoo Search Marketing

Page Views :

The number of times a particular web page was viewed. A website is generally made up of multiple pages.

Portal :

A website that has links to a multitude of links organized by categories.

PPC – Pay-Per-Click:

The amount a website pays another company when someone clicks from one website to the advertising website.

ROI – Return on Investment:

ROI generally stands for the amount of profit made from an advertising campaign versus the amount spent on the campaign.

Search Engine:

A website that indexes other websites and when a search is performed, queries its database about the search and shows the most relevant websites.

Server:

See Host.

Spider:

A program that indexes WebPages and follows links on WebPages to find other WebPages to index. This is the most common way a search engine updates and adds to its database of WebPages.

Sticky:

A term used to describe websites that visitors spend a long time viewing. A website with search capacity or in depth content pages is generally more sticky than one without such features as a visitor may spend time searching the site and reading articles.

Unique Visitors:

The number of different people who visit a site over a given time frame. If three people visit the site, and two of them return later. The site has five hits, but only three unique visitors.

URL – Uniform Resource Locator:

It is the exact address of a webpage. The url www.idjinni.com/index.html and www.idjinni.com/glossary/index.html are two different urls in the same domain (www.idjinni.com). URLs are generally shown as links on WebPages.

Visits:

The total number of hits a particular page, often referred to as visits per month. If three people visit a website, and two come back within the month, that page got five total visits that month.

The Advanced AdWords Seminar for success tour will be stopping in Philadelphia, September 28 & 29, 2011.

Our events have been selling out recently, so if you want to attend you should register early.

Learn more about the AdWords Seminars.

Register for the Philadelphia AdWords Seminar.

The AdWords Seminars have been a huge success over the past few years. But instead of me prattling on about how good they are, you can see what other’s have had to say:

 

Can’t Make it to Philadelphia?

Here is the advanced seminar schedule for the rest of 2011:

• Seattle – September 22 & 23
• Philadelphia – September 28 & 29
• Miami – October 11 & 12

You can see the curriculum and learn more about the seminars on our AdWords Seminar Event page.

 

 

Read Attendee Testimonials

First, I flew down to your conference in Houston not really having any expectations on what I was going to learn in a one day seminar over something that has paralysis by analysis written all over it like Adwords. However, I feel afterwards, it was one of the most positive and understandable conferences that I have ever attended.

You did a great job in explaining and relating the information into a plan that even an amateur like myself can understand. I have taken a lot of the information and began to implement the ideas into actual measurable results.

I just wanted to send you a note in appreciation for your time and thank you for all the information that you provided. I hopefully will get to goto another seminar in the future.

Neal Freeman, Catalog/Assistant eCommerce Manager, Dallas Cowboys Merchandising

Read the rest of this entry →

Pay-Per-Click marketing best practices have a crucial omission – the advice is highly circumstantial!

What I mean by this is that a PPC marketer should not manage a $2 Million / month AdWords account the same way as a $2000-per-month budget. While technically, the same best practices apply to accounts both large and small, the larger advertiser in this example has 1000x more at stake (or alternatively, the smaller advertiser has 1000x less at stake), and so the degree to which an advertiser should adhere to AdWords account optimization best practices varies greatly.

Failure to recognize this important detail can result in one of two potential problems:

• A smaller advertiser can end up spending way too much time and resources on PPC management expenses (for example, agency fees or the cost of hiring someone to manage the PPC account in-house) on trying to adhere to AdWords best practices which may offer large upside in terms of % improvement in account metrics, but result in a negative ROI when taking into consideration the overall media + management fees.
• A larger advertiser might waste millions of dollars a month due to lack of resources dedicated to managing and optimizing the account, resulting in a poorly managed account.

When it comes to AdWords best practices, there are an unlimited number of tasks you could potentially do, for example:

• Try out new keywords or delete poorly performing keywords
• Test out out new ad copy or landing pages
• Create new campaigns and/or ad groups
• Tweak your keyword bids or campaign budgets
• Do negative keyword research
• Try out different ad extensions, etc.
• (Repeat forever).

Any honest search marketer is going to try to follow AdWords best practices to the best of their abilities, but how much work is enough? Is it when an objective is reached, for example, a target CPA? But even then, how do you know if you should have worked harder to hit an even more aggressive target CPA?

As you’re evaluating the progress of your PPC campaigns, I think it’s important to think about how your account stacks-up with other AdWords advertisers with a similar amount of dollars at stake as you, rather than the global universe of Google AdWords accounts which can range in spend from anywhere between $1 to millions per month.

This is something that hasn’t been possible to do until now.

The Value of Peer Comparisons in AdWords

When conducting general PPC analysis it’s always important to try to compare like data to make sure you’re getting meaningful insights into your pay-per-click campaigns.

The AdWords Performance Grader from WordStream was designed to take exactly these kinds of differences into account, and I think it’s instructive to think about why the AdWords Grader’s score system was developed the way it was, as you can apply the same logic and methodology to various areas of your account and your personal PPC education process.

The basic premise of the AdWords Grader is to grade tiers of similar AdWords spend across graded accounts to give context to the application of best practices within your campaigns. For example, if you spend an average of $7,000 / month on AdWords, you’ll be compared with other advertisers with between $5,000-$10,000 / month in monthly AdWords spend.

Rather than saying you have fewer ad variations than all of the accounts graded by WordStream, or you have fewer keywords than X% of all AdWords accounts, the AdWords Grader is looking at how your account fares as compared to similar accounts – accounts of a like size and scale. Your $500/mo. Local business client isn’t being compared to how well GEICO is managing their paid search account – you’re being compared to other accounts with similar dollars at stake.

How Does Peer Comparison Impact Specific PPC Evaluations?

Let’s take a look at how this plays out with a specific performance indicator that WordStream’s grader is evaluating: ad text optimization.

Google’s Best Practice is to write ads that are aligned to the keywords in your ad group. Obviously, if all the keywords in your account are being matched to just a single ad text, you’re not doing a great job. Having 2 ads is better than 1, and having 3 is better than 2, and so-on. But how much is enough? Likewise we know that doing A/B testing of different ads within an ad group is important, but how many ads should we have per Ad Group?

Ad text optimization is perhaps one of the best examples of the power of this kind of segmentation. Comparing a large e-commerce vendor advertising thousands of products to a small business doing lead generation and spending a few thousand a month is highly misleading, because optimizing ad text with that frequency for the smaller fish is totally illogical and probably a waste of resources that would be better devoted elsewhere. Rather, you should aim to optimize at a rate that’s more frequent than accounts of similar size and shape.

In the above illustration, an advertiser spending roughly $7k / month has around 150 ads in their account, versus other similar accounts have nearly twice as many ads. That sounds about right. If you’re spending roughly $84k / year on AdWords, 150 ads seems a bit underweight. And this is validated by the peer comparison.

This same approach is leveraged in other AdWords metrics evaluated by the AdWords Grader, such as Click Through Rate, Quality Score, Landing Pages, Account Activity, Use of Negative Keywords etc. Relative account comparison (something that hasn’t been possible until now) provides a powerful means of generating more valuable insights from your paid search campaigns in general: adding context to the data you’re analyzing can make the numbers significantly more meaningful.

You can find out more about how different components of your campaigns stack up with similar sized accounts by trying the free AdWords Performance Grader.

About the Author

Larry Kim is the founder and CTO of WordStream, a provider of an AdWords Keyword Tool, SEO Tools and PPC Management Software.

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Opinions expressed in the article are those of the guest author and not necessarily Certified Knowledge. If you would like to write for Certified Knowledge, please let us know.

The Advanced AdWords Seminar for success tour will be stopping in Seattle, September 22 & 23, 2011.

Our events have been selling out recently, so if you want to attend you should register early.

Learn more about the AdWords Seminars.

Register for the Seattle AdWords Seminar.

The AdWords Seminars have been a huge success over the past few years. But instead of me prattling on about how good they are, you can see what other’s have had to say:

 

Can’t Make it to Seattle?

Here is the advanced seminar schedule for the rest of 2011:

• Dallas – August 24 & 25
• Seattle – September 22 & 23
• Philadelphia – September 28 & 29
• Miami – October 11 & 12

You can see the curriculum and learn more about the seminars on our AdWords Seminar Event page.

 

 

Read Attendee Testimonials

First, I flew down to your conference in Houston not really having any expectations on what I was going to learn in a one day seminar over something that has paralysis by analysis written all over it like Adwords. However, I feel afterwards, it was one of the most positive and understandable conferences that I have ever attended.

You did a great job in explaining and relating the information into a plan that even an amateur like myself can understand. I have taken a lot of the information and began to implement the ideas into actual measurable results.

I just wanted to send you a note in appreciation for your time and thank you for all the information that you provided. I hopefully will get to goto another seminar in the future.

Neal Freeman, Catalog/Assistant eCommerce Manager, Dallas Cowboys Merchandising

Read the rest of this entry →

In the latest Marketing Nirvana Radio Show, I interviewed  Craig Danuloff.

Craig was the brains behind Click Equations, a large bid management system, and has learned a lot about how data works at scale. One of his pet projects was trying to really learn about quality score and how it affects AdWords accounts. Craig and I have had numerous conversations over the years about Quality Score and have talked about Quality Score at several conferences.

His project kept growing until it wasn’t just a side project anymore; but a full manuscript. He spent countless hours interviewing Googlers on how the system works and examining his own data to gain as much insight as possible.

The culmination of this effort was Quality Score in High Resolution, a fairly lengthy book about Quality Score.

In the latest Marketing Nirvana show, Craig and I talk all about Quality Score. We range from why it’s important to the ‘bozo score’ to how to increase your quality score.

You can download the show from iTunes or listen to it at WebmasterRadio.fm.

We’re always looking for new people to interview and new topics. If you have a topic or a speaker that you’d like to learn more about; please leave us a comment.

I hope you enjoy the show.