1. Find-me-a-fast-car A large company that wishes to advertise second hand sports cars nationwide. Conversions are not made online, but over the phone. The aim of the campaign is to generate as many clicks as possible for their budget.
2. Creepy Cravings A small company that sells food and equipment for pet spiders, snakes and reptiles. The customer can order online for delivery.

Find-Me-A-Fast-Car

We are talking about a large campaign here where tens of thousands of keywords are delivering hundreds of thousands of clicks. It’s impractical to break the keywords down into individual Adgroups. The user might group keywords together, based on brand names like this

Ferrari (clicks/day)		Porsche				Lada
[ferrari] (100)			[porsche]			[lada]
[testarossa] (11)		[boxster]			[riva]
[testerosa] (6)			[boxter]			[used riva]
[ferrari  testarossa] (10)	[porsche boxster]		[lada riva]
[used testarossa] (8)		[boxster porsche]		[used lada riva]

Second-Hand Ferraris 			Used Lada Supercars
Live The Dream 				Live Your Grandparents’ Dream
Call Us Now For More Info 		Offers Of £50 Or More Accepted
www.find-me-a-fast-car.com 		www.find-me-a-fast-car.com

The question is, should they be splitting these 3 Adgroups down into 15? Let’s say the user currently spends 1 hour a week writing new adverts and adjusting bids. By splitting the keywords up, the user must now spend 5 hours writing new adverts and adjusting bids. For a large campaign like this, we’re probably looking at a more realistic figure of 50 car manufacturers, with 20 keywords per group minimum. That’s 1000 Adgroups, testing two adverts each, which is … a lot of hours. Ok, so our Adwords Expert is a dab hand with Adwords Editor and manages to fit all this advert writing in to their busy schedule, what do they gain? – Let’s see. Splitting up [ferrari] and [testarossa] would almost certainly improve the campaign’s click-through rate with better targeted adverts being allowed, but what about [testarossa], [testarosa], [ferrari testarossa] and [used testarossa]? Consider adverts for [testarossa] with the following titles:

The adverts have been running for 2 days but require another 25 days to reach a 95% significance level! (www.splittester.com) That’s nearly a month to make a small step forward. So what if we leave [testarossa], [testarosa], [ferrari testarossa] and [used testarossa] in the same Adgroup:

The same two days generates enough information to be 80% sure the adverts are different, and only 6 more days to get a 95% significance. It may be that grouping these keywords together has a slight detrimental effect on the clickthrough rate – a few of the keywords may have worked better on the old advert – but the potential benefits of the faster turnaround on the advert test will generally outweigh this. Even if the clickthrough rate on the new advert had only been 11% (39 clicks), the test would still have ended more quickly. But being able to run more tests will lead to more improvements in the clickthrough rate over a period of time, and the time taken to write hundreds of additional adverts could be better spent elsewhere. In this instance, splitting out the keywords would involve four times the amount of work, for just a few additional clicks…

Creepy Cravings

This campaign is clearly different, as the number of keywords is limited and we can see which ones convert. So let’s begin with a clustered set-up:

Spiders 			Snakes 				Iguanas
[spider] 			[snake] 			[iguana]
[spider food] 			[snakes] 			[iguanas]
“spider tank” 			“snakes 			“iguanas”
“spider” 			“snake” 			“iguana”

Because it would be very difficult to write varied adverts that are relevant to all the keywords in these Adgroups, we should certainly split them down:

Spider Tanks
[spider tank]
[spider tanks]
[cheap spider tanks]

This is much better – we can write adverts relevant to the search queries. These are a few of our ideas for adverts, and statistics after a week:

(1) Spider Tank 		(2) Spider Tanks 		(3) Cheap Spider Tanks
Looking For Your Spider? 	Looking For Your Spider? 	Looking For Your Spider?
Put Him In A Tank 		Put Him In A Tank 		Put Him In A Tank

CTR = 13.3% 			CTR = 14.4% 			CTR = 8.3%

Being the experts in campaign optimisation we conclude that advert 3 doesn’t work and it gets the sack. However, are we really making the most of our campaign? Instead of deleting adverts, we run some tests and find that when we move [cheap spider tanks] into its own Adgroup with advert 3 and then delete advert 3 from our old Adgroup this is what happens:

(1) Spider Tank 		(2) Spider Tanks 		(3) Cheap Spider Tanks
Looking For Your Spider? 	Looking For Your Spider? 	Looking For Your Spider?
Put Him In A Tank 		Put Him In A Tank 		Put Him In A Tank

CTR = 14.3% 			CTR = 15.7% 			CTR = 20%

So now we’re smugger than Larry when he said “What about calling it Google?” But have we gone the whole hog? Why don’t we take what we’ve learned and split up [spider tank] and [spider tanks]:

(1) Spider Tank 		(2) Spider Tanks 		(3) Cheap Spider Tanks
Looking For Your Spider? 	Looking For Your Spider? 	Looking For Your Spider?
Put Him In A Tank 		Put Him In A Tank 		Put Him In A Tank

CTR = 20% 			CTR = 20% 			CTR = 20%

So now you’re thinking of changing your name to Mr. Smug and buying the biggest house in Smuggleton. You’ve taken what would have been a very satisfactory Adgroup with a 14.4% CTR and split it up into three Adgroups with 20% CTRs.

Conclusion

In the first campaign there are more clicks to be had than we could possibly afford, and so our aim was to get as many cheap ones as possible. This means we have a huge keyword list which we expand regularly, with Search Query Reports, Google suggestions, etc. The bids have to be increased or decreased every time a change is made to the campaign, which means that trying to tweak every keyword becomes a full time job. We can increase the clickthrough rate on one keyword by writing an advert to match it and testing until significant. The effect may only be to decrease the average cost per click of the whole campaign by a fraction of a penny. This is a lot of effort for such a small gain. However, Adgroups with large numbers of keywords would be able to test many more adverts in that time and perhaps improve the clickthrough rate by almost the same amount, but with much more impact on the campaign. In the second campaign every click has a potential to change the success of the campaign by converting. It is much more important in this case to squeeze out every relevant click. So, in this type of campaign, investing more time into individual Adgroups will yield a greater increase in the profitability of the whole campaign. In a real campaign the choices and results will generally be less obvious, but with work the results can be very worthwhile. For such a niche campaign it’s likely that you’ll have budget to pay for every available click and so getting them is a priority. The cost of each click in such campaigns is less important, so long as the cost per acquisition remains profitable. These are two extreme examples. In the average campaign the choice of whether and how much to split down the Adgroups will be dependent on 2 or 3 factors; How much time you have & how much traffic you get (& if you can’t think of ideas for adverts).

Expanded Matching

When this first came out, it did so with little in the way of warnings. The first I knew about it was when my clickthrough rate collapsed on a few of my campaigns. Suddenly, where I had been bidding on leather beds on broad match, now my advert was appearing on searches for upholstered beds. In truth, I got lucky. Somebody who searched for upholstered beds clicked on my advert. As a result, it appeared in the Search Query report. If nobody clicks on your advert having searched for a term, then you don’t know about it. Even now, nearly a year later, if I search for upholstered beds, there are two adverts for leather beds. I guess some people don’t run search query reports very often… This option was designed to fill in all the keywords that are relevant to your campaign, but that you haven’t thought of. But the problem is that you can’t have Broad Matching without Google throwing in Expanded matches. Since Expanded Matching is totally unreliable, and you can never even tell what searches fire your adverts, Broad Matching has become, for me at least, unusable.

Pay-Per-Action

This sounds like a great idea. Basically, you tell Google how much you’re willing to pay for somebody to perform an action, and Google adjusts your bids accordingly. So I tried it on my two biggest, and most consistent accounts. Both of them had a very predictable cost per conversion, and I set that as my objective. The result? Virtually no traffic. In two days, a campaign that usually collected 250 clicks per day managed only 2 clicks (neither of which converted). But the point is that this is automated. It’s never likely to work very well. Either it’ll bounce your bids all over the place depending on the results from the previous day, or it won’t be sensitive to changes over time, and your bids will always be in the wrong place. It takes a human brain to work out whether the variation in the conversion rate is just random, or part of a more significant trend. Perhaps, with a lot of work, a computer could be programmed to draw reasonable conclusions, but as a rule, the tools implemented by Google tend to be relatively simple. I feel that my test could have been a lot worse , Google could have spent far too much per click. Underbidding may cost me potential sales, but at least I can’t make a loss!

Site And Category Exclusion

Alright , I wasn’t totally honest earlier. I am using this one for a few of my campaigns. The idea of this tool is that you may want to include or exclude certain categories of websites when you advertise on the Content Network. So, for example, you may decide that you don’t want your advert to appear on Forums, or on Video-sharing sites. And rather than input them all manually, this allows you to filter out irrelevant websites en-masse. This sounds great, but it raises two questions. The first one is that if these sites aren’t relevant to your adverts, why are they appearing there in the first place? This is Content Targeting. It’s targeted on the relevance of the content to your website. If it’s relevant, why do you not want to appear there. If (as is more likely), they aren’t relevant, why does Google show your adverts there? But the problem with the whole thing is that it’s just a shortcut to avoid you doing some work. Ever since Google implemented its Placement Report, you have been able to see which sites are working for you, and which ones aren’t. Armed with this information, surely it’s not that difficult to create a Placement Targeted campaign, and choose which websites you DO want to appear on. It doesn’t take very long, and you can always reactivate your other Content Network campaign occasionally, to make sure that you aren’t missing valuable traffic.

Budget Optimiser

This one’s just a bad idea. The idea is that you decide your daily budget, and Google adjusts your bids to get you as many clicks as possible for your money. That’s as many CLICKS as possible for your money. Exactly why would you want to do that? If you’re selling something, you want to maximise the value (or at the least, the number) of sales for your money. If you are generating leads, you want as many leads as possible for your money. So who would possibly want to maximise the number of clicks that they get for their money? I can’t think of many businesses that would find that useful. The simple fact is that clicks are going to be worth different amounts, depending on the conversion rate (and in some cases, conversion value). Google can’t take that into account, so it could easily bid a lot on low-quality keywords, simply because they are cheaper than the more competitive, more relevant terms.

Campaign Optimiser

There’s that word again… Optimiser (optimizer if you’re American). A quick look up on the Interweb tells me than optimization is defined as: œThe decision strategy of choosing the alternative that gives the best or optimal overall value The best value of what? Well, that’s up to you, really. In most cases, it’ll be profit, Google doesn’t know what a conversion is worth to you, But it doesn’t even take into account your conversion rates. Here are the changes it will propose, along with Google’s definition…

• Daily budget adjustment Budget changes can affect your ad visibility and bring you more targeted traffic.
• New keywords Proposals might include new targeted keywords that relate to your landing page.
• Deleted keywords If the Campaign Optimiser identifies poorly performing keywords, it may propose removing them.
• Changed keyword matching options The right matching option can help you reach customers more effectively.
• Keyword CPC bid adjustments Your cost-per-click bid (in addition to your ad quality) affects your ad position.
• Ad text edits The Campaign Optimiser may suggest changes to make your ad text more effective.
• Refined location targeting We will suggest that you target only those regions that perform well for you

So, it will tell you if your budget’s wrong, even though it doesn’t know if your campaign’s profitable or not. It will recommend new keywords , if you’ve ever used Google’s keyword suggestion tool, you’ll know how well that works. It’ll tell you which keywords aren’t working. Based on what? Clickthrough rate? Cost per click? These are not things you want to be basing your decisions on. So Google knows which matching types are appropriate for you? How? If it knows that there are keywords that you could pick up through Phrase Match or Broad Match, then they should be added in on Exact Match. If it doesn’t, then why would it recommend them? Bid adjustments are just a bad idea, for all the reasons discussed already. Advert Text edits??? Google briefly trialled an Advert Text writing tool. It was so bad, I lack the words to describe it here. I wish I’d kept some of the adverts it suggested, but sadly they are no more… Regional Targeting? It all comes back to what Google calls optimisation. They want to maximise your clickthrough rate. Which is definitely not your objective.

Preferred Cost Bidding

Haven’t tried this one, but it worries me a bit. The idea is that you decide how much you want to pay per click, and Google adjusts your bids accordingly. Sounds OK, but one of the few backups that you’ve got if things go wrong is your maximum bid , you can’t pay more per click than this under any circumstances. I’m sure that Google are going to be careful, but how well would this tool work? If you want to pay £0.20 per click, but yesterday, a £0.30 bid generated clicks for £0.19 each, will Google adjust your bids to £0.31? This won’t increase your cost per click by £0.01, as a rule. Either your advert will stay in the same place, and your cost per click won’t change, or your advert will move up a spot, and your cost per click could jump sharply. Extending this example, if you need to pay £0.19 per click to appear fourth, and £0.31 to appear third, then this change would increase your cost per click from £0.19 to £0.31. Which one does Google go for if it’s in charge? The point is that you can’t choose an actual cost per click , it’ll be one of a set of possible values, based on your Quality Score, and the Quality Scores and bids of your competitors…

Optimised Ad-Serving

Of all the stupid ideas I’ve heard in this business, none can compete with Optimised Ad-Serving. Here’s how Google explain it:

œOptimize (default): The system will favor ads with a combination of a high clickthrough rate (CTR) and Quality Score. These ads will enter the ad auction more often.

So, you’re running more than one advert for this to make any difference. Why would you be doing that? To find out whether the new advert is better or worse than the old one? So how useful is it is your new advert gets shown 1% of the time, and the old advert gets shown 99% of the time. You’ll never get decent results. I can only guess that Google want to limit your risk by showing the established advert more often. And it would be useful if you could do this, but a more useful tool would be to allow you to select the relative frequencies that different adverts show. That way, you could show your old advert 75% of the time, and the new one 25% of the time, if you wanted to. A number of times, I’ve done assessments of campaigns for potential clients, and they’ve been testing multiple adverts, but with Optimised Ad-Serving. The result was that they could never optimise their adverts, as one got all the traffic.

Standard Delivery Method

Of all the stupid ideas I’ve heard in this business, none can compete with the ˜Standard Delivery Method’. Except possibly the Optimised Ad-Serving. Here’s how Google explain it: œStandard delivery distributes your budget throughout the day to avoid reaching your budget early on. Your ads will show periodically throughout the day. So, if you’ve got £100 to spend per day, and you’re paying £1 per click, but your budget runs out by 10am, Google thinks your advert should appear and disappear randomly throughout the day. WHY???????? Wouldn’t it make more sense to cut your bids to £0.20, and get 500 clicks per day instead of 100 clicks per day, for the same money? If you only want your advert to run at certain times of day, select those hours for it to run. But randomly appearing? Is there any benefit at all in this?

Keyword Suggestion Tool

Since Broad Matching doesn’t work, it’s not surprising that Keyword Suggestion doesn’t work very well either. I decided to try it out this morning, on a website that sells conservatory furniture. That’s all they sell, and their entire website is dedicated to this one thing. Google’s suggestions? bedroom furniture, leather furniture, lighting fixtures, outdoor lighting, art prints, chandeliers, art education, school furniture, furniture rental, furniture shipping… Need I go on? None of the keywords were even slightly relevant , no mention of conservatories, cane, or anything else remotely useful. Maybe I have already added everything vaguely relevant, but I doubt it, somehow. The tool may have some value , perhaps if you run it, it may give you a new idea for a keyword. But it’s pretty clear that you wouldn’t want to use Google’s suggestions in general.

Conclusions

So, back to the new tool, then. Automated Matching. Google clearly can’t look at my site, and figure out what it’s about , you can see that from the Keyword Suggestion tool. It’s not very good at working out other, similar keywords , you can see that from Broad Matching results. It can’t measure the success or failure of a keyword, since it doesn’t use the conversion information. It can’t determine what you can afford to pay for a click, since it doesn’t know anything about your business. And yet, despite all of that, Google is willing to spend any remaining budget on keywords, without even telling you what they are. I believe that one person can keep an account well-managed in about 10 minutes per day, plus an hour every now and then to do a bit more analysis. Is it really a sound business-decision to give Google control of your money? Automated Matching? I think I’ll pass…

“John’s a pretty smart guy. He runs a company that sells specialty pet foods. He manages his own investments. He keeps an eye on his taxes. But I’ve found a way to turn John into a blithering idiot. I’ve asked him to figure out how to use Google’s (GOOG) AdSense profitably. Are you interested in a mind-numbing exercise? Give AdSense a shot. Or Yahoo SM or MSN AdCenter. Don’t you know how much to budget for “clicks” on your ad? Are you just a little suspicious as to who exactly is counting these “clicks” that conveniently turn into revenue for these companies? Like John, you’ve just entered the alternate universe of Internet advertising! Here’s a word of wisdom: Leave the mass-market advertising to Coke (KO) and Pepsi (PEP). Small business owners should stick to less mystifying forms of promotion.”

Tech ‘Solutions’ Your Small Biz Can’t Use Now, I’m not going to go into detail about his argument - he doesn’t even know the difference between Adwords and Adsense, and I can’t actually FIND an explanation of what he thinks is wrong with PPC - but it does highlight a problem that the industry seems to have at the moment. There are a lot of ‘have-a-go’ advertisers who decide to give Adwords a go, and don’t make it work. That’s fine and dandy, but for a few people, when their egos clash with a dismal failure, they simply write the whole thing off as somebody else’s fault. I’d hazard a guess here, that Mr Marks decided to give Adwords a go, perhaps for his own site, or on behalf of one of his clients, and got bad results. Unable to accept responsibility, he decided that nobody could have done better. Cue some more bad publicity for the PPC industry. So what did he do wrong? What are the mistakes that business-savvy people make when setting up Adwords accounts?

Paying For Clicks

Well, there’s a big difference between PPC and just about every other form of advertising. Imagine that you’ve got a shop, but you have to pay every time somebody walks in through the door. You’d soon stick a bouncer on the door, making sure that only people who look like they might buy something get in. Compare this to any form of traditional advertising - whether it’s posters, e-mails or even SEO, you just want to get as much traffic as possible - if 90% of them aren’t really very interested, who cares? You may a (more or less) fixed price regardless of how many people visit your site. So PPC may be the only form of advertising where you want to deter the wrong people from visiting you.

Google Are A Bunch Of Con-Men

How dare they keep charging me more and more to advertise with them? This keeps cropping up time and time again - people seem to think that Google is some kind of business directory, and that you should pay a fixed amount for a certain amount of space on their SERPs. Let’s be clear on this - Google is a Search Engine, and the only thing that keeps them running is the number of people that use them to find things. If people stop using Google Search, their whole business will go south in record time. So they make sure that people keep using them, by making the search results as relevant as possible. This is, after all, why people use Google in the first place. And they do it by rewarding the adverts that people are clicking on it, and relate to the search, and penalising the ones that don’t. So if people aren’t clicking on your advert, Google doesn’t want it to appear (or, if you believe they’re evil, they want to be compensated for bad adverts messing up their nice, relevant search results). Why is this so hard to understand? Is it really that unreasonable? The point is, you can get profitable traffic from Google - all you have to do is to focus on keywords that are relevant to what you do, and write compelling adverts. Perhaps the people that accuse Google simply can’t conceive that their adverts suck (if you’ll forgive the American colloquialism). Where else do advert-writers have to go head-to-head with ten other advert writers, competing for the same traffic? No fancy graphics to play with, no superlatives, and only a few words to play with? For old-school advert writers, I can only guess that Adwords must be advertising hell!

Small Businesses Can Make Money From Adwords

We used to represent a restaurant in Leeds, who were getting bookings through Google for about £2 each. They were raking it in, and there’s no reason that other businesses can’t do the same. We’ve had plenty of campaigns over the years with small budgets that have worked well. Perhaps the problem is that they believe that it’s too difficult to manage a campaign themselves, and too expensive to hire an Agency. The truth is that Adwords really isn’t all that difficult - as long as you’ve got a reasonable level of numeracy, and the time to build and manage your campaign, then as long as you read up and understand exactly how Adwords works, you can do it yourselves. If your campaign is big enough or valuable enough that you want to get the very best from it, then talk to an Agency - they’ll generally be able to tell you upfront whether they can make you sufficient extra profit to cover their fees. You can make money from Adwords, if you just follow these basic steps:

1. Only target keywords that relate to what you do, and nothing else. What percentage of the people searching for that keyword are actually looking for what you have/do?
2. Group your keywords, so that the adverts and landing pages are relevant to every search that shows them. If your landing pages are product pages, or you want to include prices in your adverts, then group your keywords around individual products. If you want to land on a page helping people to choose a product (e.g. a kettle), then have an Adgroup for kettles.
3. Stand out from the competition. Most businesses are very similar to their competitors, and this is often reflected in their adverts. Why should people visit your site rather than anyone else’s? Tell people how great you are (even if you aren’t all that great).
4. Bid sensibly. You can see what percentage of your clicks are turning into sales or leads, and you should know what a sale/lead is worth to you, so don’t bid more than a click’s worth. There are no prizes for appearing at the top of search results!
5. Test new adverts. Simple, really - keep writing new adverts, running them alongside the old adverts, and keeping the one that works better.
6. Monitor and adjust your campaign. If a keyword is performing badly, reduce the bid or remove it. If it’s doing well, consider bidding a bit more.

That’s really all there is to Adwords. I’m not saying that every business is suited to Adwords, but it’s certainly worth the time and effort of trying it…

1. All of the competitors increase their bids by 50%
2. The competitor immediately below you increases his bid sharply, to move top.

The first thing to bear in mind is that the number of impressions has no bearing at all of the sweet-spot. If each position gets the same percentage of the clicks, then it makes no difference. In effect, if you double the number of impressions, you’ll double the number of clicks, the number of conversions, the cost and hence the profit, in every position. I’ve assumed that everyone has the same Quality Score here - it’s unlikely to make a major difference to the So, for the sake of simplicity, I’ve left the traffic volumes where they are. They’ll impact the total profit that you make, but not the most profitable strategy. Here’s the first scenario. Each conversion makes a profit of £100, the conversion rates are fairly healthy, and the cost per clicks are quite high.

This is the data for a typical month. The most profitable position is 5th, with a cost per click of £2.11, though 6th position is only marginally less profitable. What happens if everybody increases their bids by 50% for Christmas?

Should you drop down the results page, or increase your bids? In this case, a bit of both. Your CPC has increased from £2.11 to £2.79, and you’ve dropped a position in the search results. Here, the higher cost of staying in 5th has more than outweighed the additional conversions that you’d get there, compared to 6th. On the other hand, leaving the CPC at £2.11 would have cut your conversions by more than half (compared to staying in 5th), which would cost you more in lost profits than it would save you in terms of cheaper clicks. Note that the profit appears to have fallen here, but that’s because I didn’t increase the traffic volumes. If the traffic doubled over Christmas, your profit in 6th position would be just under £20,000. One final note here - in this instance, if the bids increased by more than 15%, the correct position to appear in changes to 6th. To make it drop to seventh, the bids need to increase by a massive 70%. Interesting, but hardly conclusive. This is just one scenario, so let’s try another one. Here, the profit per conversion is lower - £60 - and the cost per clicks and conversion rates are also much lower:

Here’s the scenario for a typical month. The optimum position is 4th, though 2nd - 6th is very flat. So it seems plausible that the impact of a big increase in bids would be greater. Again, increasing the bids by 50% for Christmas…

The results are similar to the ones in the first scenario - you increase the bid, but not enough to retain 4th position in the results. To make 5th the optimum position here, the bids need to increase by a factor of 35% - 82%. Here’s one more scenario - in this case, the profit per conversion is low - £15, the conversion rates are very high and the bids are moderate.

Again, in this example, 4th is the optimum position (I’m not suggesting that this is always the case - it’s just convenient when comparing the results from different scenarios). Once more, here’s what you get when you increase the bids by 50%.

Once more, the conclusion is a kind of half-way house. You increase your bids, but not by enough to maintain 4th position. In this case, the range of bid increases for which the 5th spot is the optimum is 38% - 159%. So what are the conclusions here? In all of these cases, an increase in bids of 50% led to the sweet spot dropping by one position. But this isn’t the whole story - an increase in bids of 30% would have resulted in the sweet spots in the last two scenarios remaining in the same place. And an increase of 100% would have led to the first two sweet spots dropping by two places. So, to a certain extent at least, the impact on your optimum bid depends on your particular circumstances. However, there are two conclusions that are true in every scenario I could think of:

1. You should never reduce your bids.
2. You should never move further up the search results.

So your new bid is bounded by two values, the amount required to retain your old position, and your old bid. At what point between these two values you should set your bid depends on individual circumstances. One further point here - if you see the conversion rate increasing in the run up to Christmas, then there is clearly scope to increase your bids, and possibly your position within the search rankings, as the value of a click increases. Similarly, if your average order value increases, then your clicks become more valuable, in which case you may find your sweet-spot moving up. At the start of this blog, I asked two questions. All of the work so far has been based around a scenario where everyone increases their bids. But what happens if only one competitor does. If their increase doesn’t affect your position (they were above you before they increased their bid, or below you even after increasing their bid) then it makes no difference at all. Your sweet spot will not change at all, barring very unusual circumstances. If they move above you, then there are two possibilities - you can either increase your bids to retain your old position, or you can leave your bids alone, and drop one place in the search results. No other option makes any sense, if you think about it. Regrettably, there is no absolute answer to this one. However, in the vast majority of cases (including the three from earlier) the correct decision is to leave your bids where they are, and drop down one position in the search results. The company that has made this decision has made their campaign less profitable, as well as a number of other people’s campaigns. All of which leads to the conclusion hinted at in the title of this blog. Whenever competition on keywords rises, and people start a bidding war, Google makes more money from PPC. But then, Christmas is all about giving, and not receiving…

1. My minimum bid is too high! Why?

Simply put, your minimum bid is high, because your Minimum Bid Quality Score is low. This is Google’s measure of how relevant your advert and site are to the person searching on Google for your keyword. Google lists the following as being the inputs into this calculation:

• Clickthrough Rate
• Relevance Of Keyword To Advert Text
• Landing Page Quality
• Other Relevancy Factors

A low clickthrough rate indicates that your advert doesn’t appeal to the searcher. They are seeing your advert, but not clicking on it, because

• They aren’t reading it - it blends into the other adverts
• It doesn’t give them a good reason to click on it - why should they visit YOUR site?
• It doesn’t relate to what they’re searching for - do you have what they want?

Your advert text should relate to your keyword. Ideally, you should have the keyword in the title of the advert - this is especially important for new campaigns, as Google has no clickthrough rate data to judge your advert, so it has to guess how popular it’ll be. Google go into great detail explaining what they are looking for on a landing page. Click here for full details. In summary, there are three main points

• Relevant And Original Content
• Transparency
• Navigability

Can the user find what they were searching for easily? Are your advert claims backed up? Is there unique content on your website, or is it just links and copied information? Do you provide important information about your business, like contact details, your privacy policy and your business address? Are you running an above-board, honest business? Can users easily find their way around your site? In summary, if you’re running an honest business, and your advert is clear about what you do, and relates to the search term, then you should get a low minimum bid.

2. Why Are My Keywords Inactive?

Your keywords are inactive if your minimum bid is higher than your actual bid. I’d suggest that on the page with the keywords on it, you customise your columns and show your minimum bids (and Quality Score). If your Quality Score isn’t ‘Great’ read the answer to Question 1.

3. Why Can’t I See My Advert?

There are a number of reasons that you may not see your advert. The main ones are:

• Your Keyword Is Inactive (see Question 2)
• Your advert has been rejected
• Your keyword has been rejected
• Your advert is running, but you aren’t seeing it.

There are rules about what you can and can’t say in an advert. The full Editorial Guidelines can be found here. The most common problems seem to be breach of trademark, use of superlatives without backing them up on the site and banned content. The policy on keywords is quite similar (though superlatives are allowed) - bidding on other companies’ brand names is very hit-and-miss. Are you getting results, but not seeing your advert when you search for it? Five major reasons there are.

• Your advert is not on page one.
• Your advert is targeted to a region, and you aren’t in it.
• Your daily budget has run out - remember that there’s a delay on your results.
• You are only targeting certain times of the day.
• You’ve seen your advert too often, so Google thinks it’s not relevant and doesn’t show it to you.

If your average position is below about 8, click onto the second page of results. Your advert may simply be getting shown outside the top ten… If your advert is targeted to a region, use www.google.co.uk/adpreview to check that it’s working. If your daily budget has run out, you’re bidding too much. Reduce your bids and try again tomorrow. If your advert is shown at certain times, search then. Failing all of these, use Adpreview (see link above). Google mixes up the results a bit if you see your advert a lot without clicking on it.

4. Are There Any Cheap Keywords Left?

If you’ve read this through, you should already know that any keyword can be cheap - all you need is a good Minimum Bid Quality Score. Of course, bidding your minimum bid won’t get you very far up the search results…

5. How Many Keywords Should I Bid On?

There’s no answer to this one. If a keyword’s generating profit, why wouldn’t you want to bid on it. If a keyword isn’t generating profit, then why would you want to? Ideally, you’ll bid on all of the profitable keywords and none of the unprofitable ones. And since, by adjusting your bids, any keyword that generates conversions can be profitable, you should bid on any keyword that you think will lead people to visit your site, and convert. The only caveat I would put in here would be if you’ve got a very limited budget. In this case, you may not have the funds to bid the most profitable amount on all of the profitable keywords - in which case, you should focus on the most profitable ones (it’s hardly rocket science, is it!) Just bear in mind if you do this that your lack of budget is costing you profit.

6. How Much Will It Cost Me To Appear Top?

If you understand how Google uses the Quality Score with your bid to place your advert, you already know the answer to this one. If not, read this. Consider the following example. I’m currently top, with a Ranking Quality Score of 2.0 and a maximum bid of £1.50. How much do you have to pay to appear above me? If your RQS is 1.5, you need to pay £2.01. If your RQS is 1.0, you need to pay £3.01 If your RQS is 0.5, you need to pay £6.01 If your RQS is 0.1, you need to pay £30.01 So the answer depends on your competitors’ bids, their RQS’s and your RQS.

7. What’s The Best Position To Appear In?

I have a real problem with asking me this question. It’s unreasonable, I know. Newbies are just trying to set up a campaign, and bid roughly the right amount… But the answer is pretty obvious! You should appear in the position that makes you the most money! The further up the page your advert appears, the more clicks (and hence conversions) it’ll get. The further down the page it appears, the less you pay for each click (and hence conversion). So bounce your advert around a number of positions, work out how many conversions you get, and how much they cost, in each position, work out your profit, and Bob’s your uncle. I’d suggest that starting in about 3rd - 5th is a good idea, if you’ve got the budget to appear there all day. This is because the top couple of positions are often taken by people who are more interested in appearing top than in making money - not always, but in my experience, more often than not. If you appear much lower than this, your adverts may start dropping down to page 2 from time to time, which can make your figures far more complicated. If you’re advertising in an area where your competitors are very clued up on PPC, you may find that there’s very little difference in profit between appearing 2nd and 8th (for example) - this is not surprising, if their campaigns have been optimised to the same extent as yours, and they make similar amounts of profit from each click, then they will all have a similar optimum bid.

8. How Much Budget Do I Need?

It’s not really all that surprising that there’s no clear answer to this. You should be able to generate profitable sales no matter how low your budget, though it may take longer to optimise your campaign. Ideally, you’d want enough budget to put all relevant keywords in their most profitable positions, all the time. This would generate the maximum levels of profit for you, if you can afford to. A more meaningful question would be “How Much Budget Do I Need In Order To Make My Campaign Profitable?” This is a much more difficult question to answer - you certainly don’t want to blow a fortune while you learn your way around Adwords. If this is your first attempt with Adwords, then limit yourself to a fairly small budget, and gradually build it up as you gain more confidence (and better results).

9. I Have A Low Clickthrough Rate - What Should I Do?

There are a number of reasons that you have a low clickthrough rate. Here are the most likely:

• You don’t really have what they are searching for.
• You have what they are searching for, but they think you may not.
• You have what they are searching for, but they don’t see your advert.
• You have what they are searching for, but they don’t trust you.
• You have what they are searching for, but somebody else persuades them to click onto their site.

The first one is a problem with your keyword. You should only bid on a keyword if most or all of the people searching for it are looking for something you have. The others are problems with your advert. It needs to stand out, be clear about what you do, be honest (more or less) and be compelling. Here’s a more complete guide to writing an advert that people will click on.

10. What’s Dynamic Keyword Insertion, And How Should I Use It?

Dynamic Keyword Insertion allows you to insert any one of your keywords into your advert text. This sounds great, but there are a few problems with it… To use DKI, you need to use the following syntax in your advert. {KeyWord:default term} Where the default term is what Adwords uses when the keyword isn’t allowed to be inserted (e.g. if it makes the line too long). Note that Adwords adds in your keyword, not necessarily the search term. If you’re using Broad Match, the advert may not be all that relevant. Also, be careful around singulars and plurals. If you’ve got “toaster” and “toasters” in your Adgroup, the advert: Buy {Keyword:Toasters} Now looks great with Toasters in there, but with Toaster in there, it reads: Buy Toaster Now which is terrible. People will immediately recognise that you’ve just put their search term in the advert, and won’t click on it. E-bay does this all the time… Finally, be aware that this doesn’t improve your Quality Score. The default term is used to determine your QS, so using DKI as an alternative to grouping your keywords appropriately is not really a very good idea.

11. Why Can’t I Bid On Brand Names

If a company has a word with Google, they’ll stop anyone from bidding on that brand name. So if you want an exception (e.g. you sell Blackberries), you need to talk to the company in question, and get them to tell Google that you’re allowed. Similarly, if people are bidding on your name, have a word with Google, and they’ll generally sort it out…

12. Should I Use The Content Network And/Or The Search Network

As a general rule of thumb, the content network produces cheaper clicks than the search network, but they are of poorer quality. How much cheaper, and how much poorer understandably varies from campaign to campaign. If you’ve got the budget, you should do everything that makes money. So try them both, see which are profitable, and do that.

13. I’m High In Natural Search - Do I Need PPC?

Is PPC a waste of money, or does two results mean twice as many clicks? There are no absolute answers on this one - everyone’s got an opinion on it, and mine is that it’s generally worthwhile on everything except your brand name. With your brand name, you may not benefit from PPC unless there are other people advertising using your name and you can’t stop them. If you’re the only advertiser, it doesn’t make much difference, since your minimum bid will be very low (and hence so will your cost per click). My reasoning is that people don’t look at the whole page, then decide which company to click on - they see an advert that appeals, and click. If this is the case, then more adverts equals more clicks, and your PPC won’t cannibalise your natural results to any great extent. So, I’d say to go for it. If you disagree, feel free to reply…

14. When Does The Quality Score Get Updated?

Nobody knows. It just happens from time to time. I suppose if Google told people, they could change their landing pages just beforehand to improve their QS, then change them back to break all the rules and get away with it.

15. Can I Have Overlapping Campaigns?

For example, if you have a nationwide campaign, can you target another one with the same keywords just on one city in the country? Yes, you can, though it may not work as well as you’d like! Google allows you to have the same keyword in multiple campaigns - but it shows the one with the higher Quality Score - so there’s no guarantee that your locally targeted campaign will ever be seen! That said, if you have locally targeted advert text, you’ll probably get a better clickthrough rate, and with a local landing page, your Quality Score should be better, so you’ll probably be fine.

16. How Do You Maintain Your Youthful Good Looks?

Photoshop. Hope that helps, Steve

You Need A Big Budget

The simple fact is that you can run a successful Adwords campaign with very little money. I used to manage a campaign for a local restaurant that spent £5 per day, and typically got 10 - 15 bookings per week through Adwords. It’s probably true that if you don’t know what you’re doing, you need a big budget on Adwords, but that’s because Google don’t have a fixed minimum bid for a keyword. Instead, they establish how relevant they think your advert/site are to the searcher, and reward or penalise you accordingly. If you know how to manage your campaign properly, your minimum bid should almost never be more than £0.05, and usually it can be £0.02 or £0.03. At these prices, you can get 200 clicks per day for your £5. Of course, that’s a little unrealistic for most campaigns, for a few reasons:

1. Not everyone will click on your advert - typically, if there are a lot of PPC adverts showing, your clickthrough rate will be 2% - 10% (less if you write a poor advert), so you’d need 10,000 to 50,000 searches in order to get this many clicks per day. I doubt there 50,000 people a day searching for a restaurant in Leeds!
2. Your competitors are probably all bidding more than you are. If there are more than ten of them, you won’t be on the first page of the results, so you’ll only get a small percentage of the search traffic…

So. in competitive areas, if you just bid the minimum bid, you’ll only get a small volume of traffic. On the other hand, if you bid enough to appear near the top, you’ll spend your (small) budget in an hour or two. The trick is to find the balance between the two. If 1st place would get me 200 clicks per day at £0.50 each (cost of £100 per day), and 10th place would get 20 clicks per day at a cost of £0.05 each (cost of £1 per day), to spend my £5 per day, I may want to appear in about 7th, and get 42 clicks per day for £0.12 each. It may be that you don’t convert enough of these visitors to justify paying £0.12 per click. For example, if a booking generates a profit of £10, and only 2% convert, it may be more profitable to bid a bit less, and not spend your entire budget. Since you only pay for the clicks you get, there’s no fixed charge by Google, so you are completely free to get as much or as little traffic as you can afford. Getting back to the original myth, you can get traffic for only a few pence per click. If that traffic is profitable, then the campaign’s probably worthwhile. Just make sure that you understand how to get cheap clicks by managing your Quality Score before you start.

Competitors Will Click On My Advert And Cost Me Money

Understandable concern, but Google are pretty good at handling this. They look at the IP address, time of the click, duplicate clicks, and various other suspicious patterns, and only charge you if the click appears to be genuine. They probably don’t catch them all, but they do catch the majority, and if you think you’ve got a problem, you can always raise it with them. Any invalid clicks that they find will be refunded to you. I manage a large number of accounts, and have never seen a problem with any of them. And I’ve always found the folks at Google to be approachable when I have had a query, so this certainly shouldn’t be considered a reason not to advertise on Adwords.

There Are Some Clever Tricks That Mean That Agencies Will Do Better Than Me

No, actually there aren’t. Google are very open about how Adwords works, and there are plenty of guides to tell you how to run your campaign successfully. Basically, all you have to do is this:

• Keep an eye on your Quality Score, particularly on a new campaign. Make sure your landing page and advert text follow Google’s recommendations.
• Write eye-catching, honest adverts, and keep testing new ones. Don’t mislead people, or you’ll get clicks that don’t convert.
• Bid the right amounts on the right keywords. If it isn’t converting, bin it. If it delivering cheap conversions, bid more. If it’s delivering expensive conversions, bid less.
• Group your keywords in such a way that your adverts are relevant to every keyword.

There really isn’t much more to it that that!

Free Adwords!

Google “Free Adwords” and you get a long list of PPC adverts. To quote some of them, “Beat The System”, “Top PPC Secret Exposed”, “Adwords Ads Exposed” and my personal favourite “Man Makes $300 Million Because He Gets Pay-Per-Clicks Free. He’s Giving Away His Secret Here”. Sorry guys, but there is no way to get free Adwords, though selling an e-book about how you can may make you a few dollars… Ironically, people are now using the truth to sell their products. There are just as many adverts saying “Are Adwords Really Free? Read This Review Before You Buy” and “Warning! Getting Free PPC Is A Scam. Get The Truth Here”. As I said in my last point, there are no secrets, tricks or cons to make you money without putting in the work. There are good ways and bad ways to write adverts, and some interesting theories about things that may or may not work, but that’s about it. That’s the easy part out of the way. Now to tackle some more contentious ones…

The Google Slap

A regular question that appears on the Digital Point forum (which is a really useful resource, by the way) is “Have you been Google-slapped today?” or alternatively “I’ve been Google-slapped. What do I do about it?” Here’s the thing. Google tries very hard to deliver relevant adverts to its users. It has to, or they’d all go and use Ask or something! There are a lot of people out there who’ve built and advertised their sites solely to make money from affiliate adverts. The idea is that they pay a few pence when somebody clicks on their advert, and then make a lot more from the site that the visitor clicks on to from their site. But Google doesn’t really like this (even though they also run Adsense, which is what a lot of these people are using. I know that if I was looking for (for example) a printer, and I saw a PPC advert on Google for printers, but when I clicked on it, I just ended up on a page full of links, I’d be a bit cheesed off. So Google took steps. They decided that the landing page needs to be relevant and not covered in adverts. If they don’t like your landing page, they destroy your Quality Score (usually putting a £5 minimum bid on your keywords). This isn’t to make them more money, it’s to stop you from advertising with them. In addition, they reward three things - relevance, transparency and navigability. Is your site relevant to the keyword you’re bidding on? Do you have “Contact Us”, “About Us” and “Privacy Policy” pages? Can people easily find their way around your site? Google changes the algorithm quite often, but it can take a while to get around every account, so one day without warning, Google ’slaps’ you, and gives you a high minimum bid. But this is the important thing. If you are using Adwords as they intended - to promote your own product or service - you shouldn’t get slapped. And if you do get slapped, it should be very easy to fix. I’ve never had a Google slap, and I doubt many other PPC agencies have either. The people that get slapped are generally trying to use Adwords to make money as a middle-man - in effect making money from trying to get between Google and the page that the searcher is looking for. So it’s not that surprising that Google penalises them!

Google’s A Ripoff

If there’s one claim that’s bound to wind up an experienced PPC manager, it’s people saying “Don’t use Google! They’re just trying to rip you off! They’ll keep increasing your minimum bids to gouge as much money as they can out of you!” This is usually as a result of them starting a Google Adwords account without bothering to read up on how it works. As I’ve already said, Google Adwords isn’t a fair auction. It doesn’t claim to be. Google want the most relevant and appropriate adverts to appear, so they give them an advantage by utilising the Quality Score. To get a good Quality Score, you need three main things.

1. A good landing page
2. A good clickthrough rate (taking into account the advert’s position)
3. A relevant advert

If you see your minimum bid creeping up slowly over a period of time, you can probably rule out the landing page - a problem with that would generally give you a single, big jump in your minimum bids. Also, the advert relevancy is unlikely to cause the problem - as your campaign gets more history, the advert relevance seems to play a smaller part in the calculation.

• So, if you’re seeing your minimum bid slowly increasing over time, your clickthrough rate is almost certainly not up to scratch.

No Machiavellian plot to take over the world, no evil plan to gouge money out of innocent advertisers, just a penalty for writing adverts that don’t appeal to the people searching.

Bid High To Get A Great Quality Score

This one works if you assume that Google don’t know what they’re doing (or they’re doing that Machiavellian thing again!). Basically, you bid high to get a great clickthrough rate, Google rewards you with a low minimum bid, and you can stay top paying only a few pence whilst the people below you have to pay pounds regardless of their Quality Score. Or something like that. Google make it quite clear that when they are assessing your Quality Score, they take into account the position that your advert appears in when looking at your clickthrough rate. So a 2% clickthrough rate in 7th place will probably get you a better Quality Score than a 3% clickthrough rate in 2nd place. This seems to be another myth perpetuated by somebody who bid a lot and wrote a good advert, and found that they had to bid less over time to stay in the top position. What they didn’t realise was that they could have bid that amount initially, appeared lower, and then watched their advert gradually creep up the search results, until it nestled happily at the top. Watching this ‘cream rising to the surface’ effect is one of the great pleasures of PPC management, in my opinion. Once it starts to creep up, you know that the number of conversions is going to keep rising and rising, and the cost per conversion isn’t going to change very much. Or for a variation on this, you can keep cutting the bids a bit, and watch it rise (more slowly) but the cost per conversion come down. This latter option is probably more relevant if you have a restrictive budget, and can’t afford to pay for more clicks at the same cost per click. And so, dear reader, we come to the end of my epistle. Feel free to suggest some more myths, and I’ll see if I can add them in…

Really, this was the wrong question - what they should have been asking was how they could possibly manage a campaign with 250,000 keywords.

Do a few sums, and you see what I mean. Suppose that a typical click costs £0.20. How long do you need to run a keyword before you can hazard even a rough guess at its conversion rate? 100 clicks? If you’ve got a low conversion rate, even this may not be enough. But to get 100 clicks on 250,000 keywords, at £0.20 per click would cost £5,000,000. And how long would you have to wait to get 25,000,000 clicks anyway???

Realistically, the majority of these keywords would get no traffic at all, and 90% of the clicks would come from 1% of the keywords. So you can still optimise the keywords that get the vast majority of the traffic, so the problem isn’t that big an issue.

So what about the other 99% of the keywords? If you can’t optimise them, then what’s the point in bidding on them - they may never be profitable! On the other hand, people keep saying that ‘the long tail’ is the key to successful PPC campaigns.

The above example is quite an extreme one - most campaigns won’t have 247,500 keywords generating very little traffic. But the 90%, 1% issue is probably true of most campaigns. If a handful of big keywords eat your entire budget, how will you ever make the other 99% profitable? They’re supposed to be the most profitable in general, with their low cost-per-clicks and their high conversion rates…

One option would be to pause the big keywords, and spend your entire budget on the smaller keywords. This will, in turn, lead you to find that 90% of your traffic is STILL coming from 1% of your keywords, as the largest of the keywords you didn’t pause take most of your budget. These keywords are probably more profitable, but it doesn’t really feel very optimal!

If you’ve read through my case study you can see how I would go about this problem in most cases.

My keywords are generally grouped by product or service, with extra Adgroups for the more generic groups of terms. So in the case study, I had one Adgroup for each printer, one for each printer type/manufacturer etc.

Then I optimised at Adgroup level initially. I optimised this by trying to equalise the ROI from each Adgroup, such that the total daily budget lasted (on average) just until the end of the day.

This should maximise the number of conversions that you get per day.

Having done this, I look within the Adgroup that’s getting the most traffic, and start adjusting the bids on the keywords that generate the majority of that traffic, looking at the ROI again.

If you have a situation like the printers, where the products are largely similar, once you’ve got a few Adgroups done, you can see patterns emerging. Certain keyword formations will perform better or worse than others. So you can make the adjustments to Adgroups even without having enough data individually. This is quite good, as you can have a stab at optimising keywords that haven’t got enough traffic.

I would also do one more thing here. If a keyword’s had no clicks after a month, I’d delete it. Even if you get a 5% conversion rate, if a keyword gets a couple of clicks per year, it’s not important; it’s just cluttering up your campaign.

Just be aware that there are clear limitations to this approach. Just because a group of keywords works on printers doesn’t mean it’ll work on photocopiers, telephones or PC’s.

Consider again the campaign that I mentioned at the start of this post. He was promoting a worldwide hotel booking service.

Clearly, the approach is likely to be valid here. If “Hotels in Moscow” converts better than “Moscow Accommodation”, then it’s likely that “Hotels in Durban” will convert better than “Durban Accommodation”.

It’s likely that each city has exactly the same keyword list, with just the city name varying. This is a huge opportunity to save a fortune when optimising. Rather than just switching the whole thing on from the start, why not work out using a few cities which keywords are profitable or not, and how much to bid for each type of keyword? Rolling this out on the others would give you a huge head-start, saving you a lot of money.

But if it works here, why not use this approach for any campaign where you have the same keywords in each Adgroup with just a different model number/city?

Sadly, it’s not really something that I can do, in my position here. When a client asks us to start up a campaign on their behalf, they expect us to build it and switch it on ASAP. After all, one of the main benefits of PPC is the immediacy of the results. You turn on a campaign at 9am, and at 9:02, you’re getting clicks.

But if it was my money on the line, and I had a lot of keywords, and only limited cash, I’d probably use this method.

What do you think? Is this better than the ‘throw everything at the wall and see what sticks’ approach? Give me your thoughts or experiences…