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Adwords CTR doesn't mean SQUAT

Wed, 11 Jul 2007 12:05:58 -0500

Ok, I hate to break this to you guys.

I really do.

This is really, well, you just ain't a gonna believe this one, friends.

Here goes, because somebody has to say this. I know half the other posts in this blog are about increasing CTR, increasing CTR, increasing CTR, as kind of the Google holy grail. But one of the things that I end up doing is people come to me with Adwords accounts all the time that are messed up, for me to fix.

Are you ready?

Ok well here it goes....

By the way, this includes major advertising agencies, who pay my salary very handsomely and who therefore will remain nameless, as well as mom and pop smaller web businesses that are trying to get better results...

So for better or worse I get to look at a lot of accounts, which gives me a pretty interesting perspective. One thing I have noticed, is occasionally I find someone that does everything wrong in adwords, but they use the conversion tracking and in spite of having a messy account that makes me cringe in terms of everything I know, the person is still pulling off a really, and I mean REALLY good rate of return on their investment. In some cases they are getting a way lower cost per lead than I would expect. So they do everything wrong, but the end result is right.

I have seen a lot of accounts where the ROI is fine, but Google just disables their keywords because they are just getting too good a deal- or at least that's the way it looks sometimes. I mean if you are in position 50, your CTR will be in the toilet, but you just might get some cheap clicks, and you just might have a pretty amazing ROI too, as long as you don't get disabled. But accounts like this are not very stable, and end up coming to someone like me to improve their CTR and re enable keywords that were once performing well.

But here's an interesting concept----drumroll please....

You don't really need CTR.

Google likes CTR because Google makes more money, and it is more "relevant". But lets say someone is searching for "blue widgets"

There are exceptions, but in general everyone searching on the internet wants everything immediately, for free, but the reality is stuff costs money.

So the ideal CTR ad would be something like "Hey, we've got blue widgets here- get this (benefit) now!

The only problem is that even if you use the word "free" and its variations to filter out people searching for "free blue widgets" as negative keywords, you will still have a certain number of people who are searching for "blue widget" and hoping to get it for free.

Ok, so you have a great ad, that has a high CTR, and you get a lot of people to your site, and you feel smart because Google loves your ad, and you can now get a lower CPC because of it.

But what if you just put in the ad itself- Hey, I've got blue widgets here, and they cost $399. Pay me!

That filters out people who want stuff for free, and eliminates people clicking on your ads who aren't qualified. So now your CTR goes in the toilet, and you have been a very, very bad Google boy. But look, if you had a 3% CTR ad before, and by changing this ad text your CTR goes down to .5%, so your CPC goes up, but your CONVERSION PER VISITOR goes up by 500%, who is the real winner here?

I am not going to go through the math exhaustively, and it will be different for every site, but I just want to point out that sometimes "relevance" involves filtering out visitors you really don't want to pay for, in your ads themselves, and not worrying so much about the CTR.

The bottom line is your cost per conversion, per lead, or per sale, not the amount of traffic, the cost, or your CTR.

The apparent equation Google wants you to do is:

1) really relavant keywords to your product
2) negative keywords that filter out people who really aren't looking for exactly what you have
3) super high CTR ads that make google a lot of money and offer free stuff
4)highly relevant landing pages that are information rich, help the world, support open source and answer peoples search query for free.
5) the advertiser is then supposed to convert this into money somehow

This is what I propose:

1) really relavant keywords to your product
2) negative keywords that filter out people who really aren't looking for exactly what you have
3) honest ads that filter out the freebie seekers and the casual shoppers
4)highly relevant landing pages that sell the darn thing
5) the advertiser converts these real customers into money better and enjoys a profitable website, and spends more time at the beach.

How do I do adwords?

Well, the same old way unfortunately, testing different ads, worrying about my CTR and the relevance of landing pages, lots of negative keywords.

But now I have a hope for something better, and I plan to monkey around with it, based on some accounts that break all the rules and still come out ahead.

This would be an interesting test if you can track conversions down to the AD, which is to test a high CTR ad, against a low CTR ad that filters out people more, and look at the difference in conversion.

The first person that gives me a good case study on this will win something very cool.

Adwords Activity in the UK

Thu, 12 Jul 2007 13:53:11 -0500

David from the UK sent me this question, and my answer follows:

Hi Steve,

Hope you're well, and that business is good!

I've been working for a recording studio, and the owner is looking at adwords as a potential advertising scheme. I was hoping you could answer a couple of questions for me to help us out..

How much should he pay-per-click to make things worthwhile? The studio is based in London and doesn't really need to appeal to people outside of the UK - would that make it cheaper?

He's got a minimal budget, and naturally wants to make the biggest impression with the smallest cost. Are there any other methods you can recommend?

Is there any way of getting top of the list in google's regular search (probably with the search term 'london recording studio' or similar)without having loads of link juice.

I know I'm kind of asking for your secrets - but it would be a big help if you could shine some light on the subject.

Many thanks Steve,
Take care

David

--------------------------------------------------

Ok David,

I am working on an update of all the videos at the moment, which is actually going to be a 4th CD added to the set.

Mostly I deal with the US, although Adwords is still pretty big in the UK, and the principles are all the same.

Its hard to come up with a price per click without knowing the profit margins in his business, and what the actual value to him is in aquiring a new customer.

So the factors of:

Targeting and relevance of keywords and ads,

Good ads that make people click,

How good the site converts people to become sales leads,

Percentage of the leads that are closed, with how much money they generate.

How well he can get them to continue to buy more services/products, are the main ones to consider

That equation will tell him what his worth is per sales lead, per visitor, and what the cost per click will be. There are a lot of ways to make the whole process more efficient, depending on what he works on.

A lot of people spend thousands to get visitors, without testing different designs and sales copy on their sites to continually improve the results, and a lot of times just something like the change of one or two words in the headline can change a losing campaign into a winner.

If he is on a limited budget, niche markets are the way to go- find one type of client that needs your recording services and design a campaign just for that, like cleaning up audio for depositions for lawyers, recording voice overs for documentaries or producing background music for ads for radio stations, recording teenagers first albums with the help of their rich parents, (whatever you find out from your own market research, I don't know this business, so I am just throwing out ideas.)

Make a special landing page directly related to only that service with the best sales copy you can, and monitor the results of the entire sales cycle.

If you do this you will likely have less competition, and your profits will actually be higher, while still keeping your advertising costs as low as possible.

Now if this niche market throws you a little bit, have him go through all his invoices over the last 2 years, jotting down information about the different types of sales, and the types of people, and the types of services that have been already delivered - Just within your own business you will find different subgroups of people who have ALREADY PAID YOU MONEY, and different services you might not have realized were hugely profitable.

If you re-target them using adwords, you can definately get more of those people, especially if you have success stories from these prior customers to show potential new customers.

That's my two cents that I can give you without actually going there

Good luck,

Adwords- Ripping Beginners to Shreds

Wed, 11 Jul 2007 13:24:22 -0500

ANALYSIS OF A FAILING ADWORDS ACCOUNT

Ok this is going to be a little fun, and a little brutal at the same time.

This will illustrate the process of analyzing an account that is in pretty bad shape. I would consider over a million impressions with a clickthrough rate of almost ZERO to be in pretty bad shape.

Let's take a look:

When we log into the account, this is what we find:

Ok, with a 0% click through rate we have nowhere to go but up, lets see why this campaign is performing so poorly. As a side note, it is not smart to be using the Google tool to monitor those conversions, even though it is free. Get a real 3rd party tracker. Google representatives have admitted that this data is used in certain decisions Google has to make about the adwords program, and it is not smart to "open your books" to Google in this way. Ok lets look a little closer and see what we can find:

Notice two things- There are NO negative keywords at all, so there is no way to filter out bad or poorly performing traffic, or just plain searchers that are really not looking for a debt consolidation service that this company offers. That is the first thing, The second thing is that there are no sites listed to NOT be shown in the content network. In taking an account that is in trouble, its best to just shut of the content network completely while you work with your ROI on Google only for a little while, because almost every other option including the search network gives you worse quality traffic. So to stop the leakage, that is the first thing to do.

Lets move on a little bit more:

Just as expected, the content network is performing poorly as you can see here. The other thing to notice, which isn't obvious in this picture above, is that there is only ONE campaign and ONE ad group in the whole account. It is very hard to target your ads this way and get a good a good click through rate, which is the chief thing you need in order to reduce your cost.

The other thing that should be noticed is that they are paying a premium price on the content network traffic. The content network hack as described elsewhere in this blog should be employed, so that they can reduce their content network costs, but right now they should nuke it until the account can get under control. So far, here are the immediate steps to do:

Pause the whole account and lets do some operating
Nuke the content network from the one poorly performing campaign. Consider nuking the search network too, while you work on your targeting and Click throught Rate

Lets do a little further analysis and see if there is anything that is actually going right in this account:

Adwords CTR Algorithm Change

Wed, 11 Jul 2007 13:32:48 -0500

Change in Adwords ranking algorithm

As you remember, last month we talked about the slight change in the algorithm in how Google will be displaying adwords ads, which in a way is back to how it was in 1998 or so. Back then, ads themselves were looked on as either relevant or not by looking at the content of the ad itself, and after Google got money hungry, this dropped in importance a bit.

Now however, this might be becoming important again. So, if you are advertising on a keyword phrase it will give you a slight boost in ranking in addition to making those words bold in your ads, if you have those words or related words in the copy of your ad.

This will help your CTR quite a bit in theory.

I wish I could say I have been dutifully testing this for you but I have actually been having fun with testing some other aspects of copy and landing pages, so I can't report any conclusive results yet. But this is something to keep in mind when you are making new ads. You can find more details here:

Adwords CTR discussion

Competition Research Tool of note for both Adwords and SEO

Wed, 11 Jul 2007 13:35:15 -0500

Swiss Army Knife of Adwords Competition research

Continuing on this competition research theme, I tried to review this site before but it didn't work so in a fit of depression I gave up, but now it seems that golexa is back up from Ed Schmidt and a few friends. It is almost too much information, but it is a heck of a hack.

Basically almost everything you want to know about a domain you can find there, although it is more for SEO research than Adwords as such.

Nevertheless its definately worth a visit and a few searches on your favorite keywords.

Here's the feature list of all the stuff they have from their website that you can access from each search:

The first Search Engine with a "Site Analyzing Control Panel" for EACH result.
With GoLexa.com you get 1-CLICK:

Google Results	Alexa Thumbnails	Alexa Traffic Rank	Google Page Rank	Link Stats	Site Report
Link Pop	Keyword Check	Traffic Report	WayBack Machine	Page Size Check	Site Speed
IP Address	Ads	Search Engines	Source Code	Spider	Ping

FAQ...................
Google Results-Golexa.com gets its results from Google.com via the Google API.

Survey Update and Alpha Competition Research Tool

Thu, 12 Jul 2007 10:45:22 -0500

Super Secret Competitive Intelligence tool and Survey update

I now have a programmer working on a serious competition analysis application that I am pretty excited about. It is in the alpha stage at this point, but it is like your own personal Googspy.

On the survey note I have 3 slots left now, so if you want your chance to win ALL 15 videos I would definately go take the survey now.

By doing the survey you get a chance to win a set of all of the videos that you see here: http://www.adwordstraining.org/mastering_google_adwords.htm

The feedback helps me a lot so I can make the videos better and the training better. I have some great feedback already, even before tabulating the surveys:

82% of the respondents are male- that is a surprise I didn't expect. The guys are still trouncing the girls at least in Google Adwords!
About 40% have never done PPC advertising before
60% have tried it with varying degrees of success
37.5% are doing Adwords for a company, but many are doing it on the side for themselves as well

Once I get the survey tabulated up I will have a lot better idea of what to concentrate on for future videos. If I have a good consensus on something that I find interesting I will post it here in the following weeks. Unless I hear a lot different the next video I make will be a "barn buster" that shows how the big advertising agencies manage large PPC campaigns, and how to kick their butts in PPC. This one won't be for everybody, but it will definately have some really good advanced level stuff on it.

Google finally gets it- content network improvements

Wed, 11 Jul 2007 13:48:23 -0500

Google finally gets it- improving the content network

Well I have to say that its good that Google is listening, because the content network has always been kind of a joke in terms of quality and avoided studiously by marketers like me for the most part. Overture never did get it, and keeps trying to shove all their crappy traffic down the throat of advertisors, even though they have a lot of low quality sites in their network, and haven't listened to advertisors complaints for YEARS now. So I do have to give some kudos to Google for listening and attempting to work on the problem. What they are working on is to make it possible for advertisors to pick specific sites in the content network to run ads on, instead of having no choice and having to run it everywhere like it is now.

This should be a major improvement and will definately shake up the industry a little bit, because what will happen is that the sites that are really good at converting specific types of traffic will probably see their advertising revenues increase, and it will be much better for site visitors, too. It's good that advertisors will have the flexability to pick other sites to advertise on that is a better "fit" for them and it really makes a lot of sense.

Even though Overture was the first major player in this market, and even though they got bought by Yahoo for big bucks, they are really going to be falling behind now. This kind of superior targeting is what advertisors and site visitors both need, and it will encourage sites to provide useful things to their visitors. Sites with better contents and reputation will be rewarded with more reputable and richer (we hope) advertisors, and recieve more revenues as a result. Advertisors might have to pay more to advertise on "better" sites but that's fine, the market will adjust itself.

Google is also taking another big step with advertising on a cpm (cost per thousand) basis, with an "adjustable" cpm model kind of like adwords works on with their adjustable CPC. I am not thrilled about this one because it really is a "black box" like adwords is, where you don't know the prices your competitors are paying or sometimes even the price YOU are going to pay, until you do it. Then you have to resort to various hacks to figure out what your competitors are paying. But on the bright side, you can probably find ways to get a cheaper CPM than if you just had to pay a straight price to some big media company, so there is some benefit there.

You can read more about the changes here:

http://services.google.com/ads_inquiry/sitetarget?hl=en

CTR and the Adwords Improvement Cycle

Thu, 12 Jul 2007 12:46:53 -0500

CTR and the adwords campaign improvement cycle

I can't say that I am 100% on this because after you are managing about 20 Accounts for different clients it gets harder to do. But if you are doing adwords for yourself you should definately do this:

Poor Man's Adwords Competition Research

Thu, 12 Jul 2007 12:09:29 -0500

The poor man's adwords competition research

Since it isn't under everyones power to spend 2000 bucks a month to monitor 500 keywords, I offer this simple advice:

Pick the keywords you want through your usual process
Run them all through wordtracker
Pick the keywords you think you can kick some butt in. This strategey is different depending on what you are selling of course. People doing affiliate marketing have to find cheap clicks at any cost, and these days that means moving to keywords with a lot less search volume. But if your business can handle it and you need more clicks you are going to pick the terms that get a decent amount of traffic AND ARE HIGHLY TARGETED for you.
Clear your cookies and go hit Google on a few of these key search terms and look who is out there. Refresh your browser a couple times and you will see who is testing different copy because you will see the ads change before your eyes when you do this.
Take any notes you need to, copy and paste the ads somewhere if you want, but then clear your cookies again and come back in 2-3 hours and do the same thing. Each session you can hit a few of the key search terms you want to compete in
Sometimes after even just a few days of doing this, you can already tell who you have to beat. But do this for at least a week. Many marketers do this for at least 3 weeks before they enter a new market.
You are looking for people who show up almost ALL the time, especially around position 6, 7, 8. This means they are showing their ads the maximum amount possible and getting the cheapest clicks possible, and you can bet if they are doing that every day, day in and day out over a 30 day period they are making profit. Either that or they are really, really crazy. Sometimes the people who always show up number 1 should be watched too, but only if they always show up every time you search. If they show up number 1 for only half the time that's really inefficient advertising, and eventually you are going to wipe the floor with them.
During this time, note the ads that are consistently winning, visit the sites to see the sales process, sign up for the newsletter or whatever, and learn what you can. Now with the knowledge of the winning ads, and who the top competitors really are, you can vastly increase the speed of progress of your marketing efforts.

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