PPC Hacking: AdWords and Quality Score Secrets Revealed

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:

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:

Sorted from Bottom to Top:

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.

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Giotto De Filippi CPC, adwords, conversion rate

There are many possible bidding strategies for AdWords, but at the end of the day what it comes up to is simply where will your Advert shows and and at what price.

Will it shows first? Will it show last? Will the click be expensive?

There are a few correlations that are almost always true:

• Higher positions will cost more per click
• Higher positions will deliver more clicks
• Higher positions will have a lower conversion rate

The logic is pretty straightforward, higher positions get more visibility and so get more clicks. Advertisers compete via the auction system for the first ranks, so this makes those more expensive.

The conversion instead is more about user psychology, the more they dig down in the results the more they are interested. A click on position 1 shows much less commitment than a click in position 10.

So now the important question: Which position should you bid for?

There is no magic answer that always works, since it also may vary from market to market, but in general terms we can say that the more you appeal to the generic audience for that keyword the higher you should bid (if your conversion rate allows it) and the more you are targeting a specific segment of that audience, the lower you should bid.

Of course the factors of conversion will enter into play too, meaning that if your site is poorly designed and your prices are expensive you’ll have a lower conversion rate that won’t necessarily let you bid for #1.

Generic audience simply means what people that search that keyword are searching for “in general”. It may requires some research and experimentation in order to find it out.

For example let’s think about jewelry related keywords. What are people that search that specific keyword looking for in terms of price? Are most people looking to spend $100 or $10,000? The point here is that for a keyword like that the price range is so huge that you may completely fail if you don’t know the statistics. Maybe 95% of the people are looking to spend between $100 and $500 and if you don’t give good visibility to that price range on your site you won’t convert.

Now for example let’s say you sell very expensive rings that interests only 1% of the traffic, then it makes sense to buy a very low position and clearly state in your advert the segment you are targeting, as you already know that people searching that keyword that are looking for what you sell will very likely:

• Have a hard time finding what they are looking for on the generalists #1 sites
• Already know they’ll have a hard time so already be prepared to go through many sites in order to find it

As a general conclusion, if you are a generalist you should really aim for #1, if you can’t get #1 profitably then you should work on your conversion. If you are a specialist you should instead work very hard on clearly stating your specialty in your Advert.

A related post to this article can be found here: http://www.ppchacking.com/2009/01/focusing-on-ctr-for-your-adverts-and-forgetting-conversions/

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Giotto De Filippi adverts writing, adwords, conversion rate, ctr

Negative keywords are one of the most powerful ways to increase the CTR (and so your position) on AdWords for broad and phrase keywords.
Unfortunately there is not much documentation about how to use them in an effective way.

Let’s see the different levels of understanding of negative keywords form beginner to advanced:

1. Don’t understand negatives at all, they just don’t add them
2. Add obvious negatives like “free” to their campaigns
3. Check their webserver logs or analytics software and look at exact search queries, then add irrelevant words to negatives

However even the 3rd level of understanding is really missing the most important thing!

There is an important distinction to make in negatives:

• Negatives that don’t make the sale
• Negatives that don’t get the click

Negatives that don’t make the sale are the ones that you can get from analytics - when you get the clicks but those clicks don’t make sales: by adding those negatives you’ll increase your conversion rate but not necessarily your CTR.

Negatives that don’t make the click are like a hidden disease: some people search but never click, so you have no way to know that these impressions happen and so to put them as negative. Reason being that with an analytics software you can track the search query that generated a click but there is no way to know which search query generated an impression that never got a click.

Note: Even if an impression doesn’t make the click it’s costing you money because it lowers your CTR

One way I found to help in this task is to write an advert that is as generic as possible for your topic: what will happen is that some people will click on it as they find it somewhat relevant no matter what they search.

Example if you write “Buy” in your advert the chances of someone that had the word “Free” in this search query clicking is very low, so you may simply never realize that anyone is searching “Free” and put it as negative - however if the advert is completely generic you have more chances to get a click from both “free” and “buy”.

Of course this generic ad is just a first phase of your campaign to learn negatives, after that you’ll try targeted ad variations to improve your CTR and conversion rate.

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Giotto De Filippi adverts writing, adwords, conversion rate, ctr

A lot of AdWords advertisers understand the importance of a quality advert in order to get a good CTR.

CTR of course is very important since it’ll have an impact on how much one will pay per click for a given position.

However as we have seen in a previous post (http://www.ppchacking.com/2009/01/focusing-on-ctr-for-your-adverts-and-forgetting-conversions/) the conversion rate that the advert is getting may be even more important than the CTR.

The right approach to write an effective advert is to understand that that adverts are made of 4 lines, and not just 3. The last line (display URL) is actually as important as the other ones.

This requires registering several domains, that can even be very similar, and have them mirror the same site. Then you just write the same exact advert (the first 3 lines) with the exception of the destination URL.

In the example above, you can see that the advert is exactly the same, except that the second domain contains the word “cure”. This is a website about a cure, and we have 2 versions of the domain, one that just contain the name of the disease, and the other one that starts with cure and then has the same disease name.

To make an example it could be like: www.CureFlu.com vs. www.Flu.com. (I cannot reveal the website of the customer)

Intuitively it would be pretty hard to guess that this can make a difference (except the fact that usually shorter domains are seen as more “authoritative”) but the difference is actually measurable. The short domain has a slightly better CTR (around 10% better) and a better conversion too (30% more).

So the moral of the story is that it may actually be a very good investment to register 10 or more domains that show the same site, and test the CTR and the conversion. In a very competitive area with low margins the domain itself may make the difference between making a profit and making a loss.

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Giotto De Filippi adverts writing, adwords, conversion rate, ctr

Most people pay a lot of attention to the CTR of their adverts, but not that much to the conversion rate of the advert itself (In my experience people seem to measure performance of adverts by CTR and performance of keywords by conversion rate).

In this post I will show an example to illustrate why this practice is wrong and will lead to wasting lots of money.

As you can see from the image above, I tried 3 differents adverts in this AdGroup, trying to improve my CTR and conversion. Since I cannot disclose the advert without risking to disclose the name of the customer I had to hide the advert, just note that just one word was changed in those adverts, and every time I chose a word that was more appealing to a certain segment of the audience for that keyword.

What is interesting to see is that the advert that achieved the highest CTR also achieved the lowest conversion rate. The CTR are all very similar, all almost at 5%, however the worst converting advert has a conversion rate that is less than half the one of the best converting advert.

Now the most important thing to understand is WHY it happens that the conversion rate of an advert is not necessarily proportional with its CTR.

Many people simply assume that you should have the highest possible CTR so as to bring as many people as possible to your landing page. Then from there they believe that every keyword has a certain conversion rate for a given landing page.

However the advert plays a much more important role in my opinion than just bringing as many visitors as possible to the landing page, it’s actually an opportunity to target the right segment for your landing page.

Let’s make an example (since I cannot reveal the real keyword used in the example): assume your are selling laptops, you are bidding on the keyword “laptop” and your landing page is very generic.

You could for example try different segments in your advert:
- latest laptops
- cheapest laptops
- discounted laptops
- light laptops

The important point to understand is that those adjectives are not actual differentiators of the product, like for example saying Sony vs. Acer but they are actually things everyone want in a laptop (everyone want a new, light and cheap laptop, and everyone will be interested in having a discount if possible).

This means that of course if your landing page is about a Vaio laptop and you are buying the keyword “vaio laptop” then the best way to describe it for highest CTR and conversion rate is to include the word “vaio” in your advert, however here I’m talking about a generic keyword like “laptop” or “buy laptop” with a generic landing page.

What happens by segmenting - by the example adjectives I provided - is that you target specific segments that might react differently to your landing page, without you being aware of it until you try.

Imagine for example that the prices on your landing page are very good, then probably “cheapest laptop” will have a higher conversion. It won’t necessarily have a higher CTR (since the most price-sensitive people are not necessarily the largest segment of the people that search the keyword “laptop”) however it’ll convert that segment better.

So the success of this stategy will depend both of the size of that segment and its conversion rate. There is also another element based on the advert position that I’ll discuss in another post.

Just to make the whole post very clear, let’s use a simple metaphor. If you are looking for employees to hire thru an ad in the newspaper, if you want to receive as many calls as possible (CTR) you’ll just mention that you are hiring, but most of the callers will not be suitable for the job, so you won’t hire many people (low conversion rate). The more you make your offer specific, the less calls you’ll receive (CTR) but the more those calls will be qualified and the more chances you have of hiring the caller (conversion rate). You may get less calls in the second scenario, but very qualified people that you might want to hire would never call for a generic ad, so if you want to hire qualified people (segment) you should specify it in the ad and you’ll be able to hire more overall (more conversions).

So the best thing to do is to try all these possible segments to see which one work better for a given keyword/landing page combination.

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Giotto De Filippi adverts writing, adwords, conversion rate, ctr