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Archive for July, 2009

The Magic Keyword “Buy” in AdWords

July 21st, 2009
8 comments

Most newbie AdWords users focus very strongly on CTR as a way to measure the success of their advert.

In previous posts I already explained why focusing on CTR is wrong and why instead you should focus on conversion:

What CTR indicates is simply how many people out of those that made a search clicked your advert. However it doesn’t indicates who those people are. Are they buyers? Are they people purely looking for information with no intention to spend a single dollar?

People that search on Google have a specific intent in mind, and they summarize it into the search query. However the search query being just a few words it doesn’t tell everything about the intent of the user. Is he looking to buy? Or just searching for information?

The second step in expressing that intent is clicking on an advert. The user will click the advert that he feels is the most relevant to his intent (and not just to his search query).

So if for example you add the word “Buy” in your advert people that have the intent to buy will click more on that advert and people that don’t have the intent to buy will click less. Usually by adding the word “Buy” in your advert you’ll get a lower CTR, but the reason is not because your advert is not good, it’s simply because the amount of people with the intent to buy is less than the amount of people with the intent not to buy.

Let’s look at this example:

magic-word-buy

In the advert with “Buy” the CTR is lower, however the conversion rate is higher and overall the advert with “Buy” generates more conversions.

Also besides generating more conversions this advert gets half the number of clicks, so the cost is is also less.

Giotto De Filippi Uncategorized

Dangers of AdWords Average CPC

July 4th, 2009
3 comments

Frequent readers of my blog know the value of bidding high on a keyword in order to appear on the left (if not read here: http://www.ppchacking.com/2009/05/appearing-on-the-left-on-adwords/)

Of course you want to bid high, but you also don’t want to have a high CPC, which is usually possible if the person ranking #2 is not bidding high. (Very simplified example: You bid $10 so you appear on the left, and the person below you bids $1 so your CPC will be a little more than $1 but you’ll be on the left and get much more traffic).

When you use this strategy you’ll watch very carefully your Average CPC to ensure that it doesn’t grow.

However there is something very important that you should understand about Average CPC: the fact that it’s just an average.

This means that if you are bidding $10 and your Average CPC is $1 it may very well be that you are paying $0.1 for some clicks and $9 for others (and the ones that cost $9 are not necessarily the ones that convert).

Unfortunately Google doesn’t release cost of individual clicks, all they show is the Average CPC.

I’ve however found a way to get some useful (even if not perfect) results: In the reports section use the “Geographical Performance” function in a way that split the clicks as much as possible (so that you go as close as possible to seeing price of a single click).

So use the following settings:

geographic-performance

By doing this every click will be split by: AdGroup/Day/Region (There may be hundreds of regions in a single country) so you’ll often see the price of a sigle click, but even if you don’t they’ll be small group of clicks with similar prices.

There are many ways to analyze the data you’ll get, from very simple like sorting the report ascending and descending by Average CPC to making more complicated pivot tables with excel.

Sorted from Top to Bottom:

geo-report-top

Sorted from Bottom to Top:

geo-report-bot

Keep in mind that the Average CPC of the following example was $1, but as you can see just looking at the number $1 (that AdWords tells you in the interface) doens’t really means much since the range goes from almost $7 to a little more than $0.10

So what is the action to take once you have seen this report? See which countries have a high CPC (that is not worth it in terms of conversion) and group those in different campaigns so that you can have different sets of bids. What you want to do is keep bidding a lot to be on the left in areas where your CPC is low, and use much lower bids in areas where the report shows you that you are actually having a very high CPC.

Giotto De Filippi CPC, adwords, conversion rate