ClickEquations Blog

Pundits are already calling 2009 “The Great Recession”. Search marketing has been more recession resistant than other industries, but advertising overall has taken a hit.

It’s no surprise, then, that when you look back at the year in significant Google AdWords changes one thing comes through loud and clear: Google is wringing every penny out of SERPs at the expense of organic search.

Advertising on the Google is becoming more competitive and more complex. The timeline below shows the key changes made to Google’s AdWords program in 2009.

As you can see, many of these changes pull attention away from organic listings: AdWords site links, Product extensions and even the location of the ads on the right, to name a few. (FYI – This timeline is embeddable on your site or blog).

If I missed a notable announcement, please comment.

2009 AdWords Changes Timeline

• January 13, 2009 – New Features in Google Maps Ads
  Google adds a new “info window” for Google Maps and extra analytics. Google is actually pulling some of the more common tasks users do for businesses (ex: getting directions) into the window.
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  This is significant, because each of these “micro-conversions” represents an action that approximates ROI for your local business. Analyzing and optimizing around these activities and others will help improve your ad spend.
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  It’s also interesting to note that Google is pulling more of the site experience to their site vs. yours, a trend we also see in the comparison ads (detailed below).
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• February 20, 2009 – Updated Display URL Policy
  Disallowed multiple display URL domains within a single ad group. All text ads must now have the same top level domain.
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  For example, www.clickequations.com/blog, www.clickequations.com and www.example.clickequations.com would all be acceptable in the same ad group. However, you could mix www.clickequations.com and www.clickequations.paidsearch.com in the same ad group, for example.
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  The display URL affects your CTR, conversion rate and is a factor in your Quality Score, so it’s important to monitor changes to their policies.
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• March 4, 2009 – Expandable Rich Media Ads on the Content Network (beta)
  Expandable rich media, which offer interactivity and video streaming, was opened to beta advertisers on the content network.
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  Rich media has to be measured differently than traditional display ads, which is limited to impressions, clicks and post-click activity (though viewthroughs are now available, see below). Rich media, meanwhile, can be expanded and interacted with in a variety of ways: video plays, form completion, etc.
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  This also introduce an element of complexity in the analysis of your traditional display campaigns. How often are you competing against rich media ads? How does that affect your performance?
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  These questions aren’t easily answered today, but will become more important as the number of advertisers and media formats increases on the Content Network (see DoubleClick announcement below)..
  
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• March 11, 2009 – Interest Based User Targeting on the Content Network (beta)
  New behavioral and interest-based targeting on the content network. Content network targeting has been keyword based or placement targeted (you select from a list of sites).
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  Google is now classifying people into groups based on their visits to sites running AdSense, ex: Shopping – Coupons and Rebates. You can now target these groups without specifying keywords or choosing particular placements.
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  Display advertising is one of Google’s key focuses in 2010, so it’s likely that we can expect more targeting options going forward.
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• March 12, 2009 – Hal Varian’s AdWords Auction Video
  Google’s Chief Economist explains the AdWords auction. In this video, Hal Varian shared a lot of detail that helped illuminate some important concepts: clickthrough rate is the number one factor in Quality Score, your bid actually plays an indirect role in the final calculation of your CPC, and increasing your Quality Score could save you 20% or more.
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• May 14, 2009 – Google Loosens Their Trademark Restrictions
  You can use trademark terms in your ad text in the U.S. even if you don’t own the trademark. Previously, Google permitted you to bid on trademark terms, but not use them in your text ad. Now, “you can use trademark terms in your ad text in the U.S. even if you don’t own that trademark or have explicit approval from the trademark owner to use it.”
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  You can expect increased competition among branded and trademarked terms from retailers, resellers and affiliates. Tools like The Search Monitor can help you monitor trademark use.
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• June 17, 2009 – Import Google Analytics Goals into AdWords
  Advertisers who use Google Analytics can now import conversion goals into AdWords (click to enlarge). If you’ve tagged your site with Google Analytics, you can substitute that measurement for the Engine specific conversion tags to measure conversions and revenue.
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  To use this feature, advertisers must opt-in to share their data with Google products or Google products and their benchmarking services. Keep in mind that both Google AdWords and Google Analytics currently default to last click revenue attribution.
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• July 24, 2009 – Local Extensions for Local Business Ads
  Displays address alongside the text ad for relevant searches. Local businesses can now link their Local Business Center account to AdWords.
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  Your location will now appear alongside your text ads in one of two ways. Either you can associate specific location extensions with individual ads or let Google dynamically match eligible locations to a user’s location (usual determined by IP) or geographic modifiers in their query (ex: philadelphia gym).
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  These extension replace the local business ads format, but differ in two important ways:
  - Business title: You will no longer be required to have your business title be the first line of your ad text.
  - Targeting restrictions: By default, enabling ad extensions at the campaign level will not limit your ad targeting.
  Unfortunately, Google hasn’t released any reporting to help you understand when local extensions appear and how they affect your performance. Make sure to test your text ads and set your geo-targeting options properly as you transition over.
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• July 30, 2009 – New AdWords Interface
  Google redesigned the user interface and features in their web-based editor for AdWords. Reaction was mixed, according to some polls.
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  Most notable was the addition of the Opportunities tab, which pulls together a number of tools and automatically suggests changes or additions to advertisers accounts. Devin Sandoz said that this is a key area for 2010, which means we can expect to see more features.Right now, the tab primarily presents suggestions for keyword additions.
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  The relevance of these words varies wildly, so be careful with your additions and make sure to mine your search queries.
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• August 3, 2009 – Bid Simulator Launch
  Google new tool to estimate impressions, clicks and costs at different bids (click to enlarge). The data, calculated on a rolling 7 day basis and only for higher volume keywords, is an unusual move by Google to increase transparency into the bidding process.
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  You can see the potential (though theoretical) trade offs between impressions, clicks, CPC and total cost at various Max CPCs. As Hal Varian explains in another great video, you have to look at the incremental cost and profit per click, not just the potential traffic change.
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  This, combined with Google’s research showing that conversion rate doesn’t vary by position, can help you make more informed bidding decisions. Of course, you still need to optimize your Quality Score. For more detailed analysis, check out our article on Search Engine Land..
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• August 6, 2009 – Google Moves Paid Ads Closer to Organic Listings
  Ads on the right side of the search results are now closer to organic listings. Previously, ads were set to a fluid width. As a user’s browser screen stretched, the ads moved further away from the organic listings, staying close to the scroll bar.
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  Now, the ads stay fixed to the right side of the organic search results regardless of browser window size. While there aren’t any hard statistics, it’s likely that paid search clickthroughs increased at the expense of organic results.
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• September 17, 2009 – The DoubleClick Ad Exchange is Integrated on the Content Network
  DoubleClick Ad Exchange sites are now part of the Content Network. Google has been aggressively pursuing the display ad market, first with its acquisition of DoubleClick and then with the introduction of the DoubleClick Ad Exchange.
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  Now, that exchange is connected to the Google Content Network (sites which run AdSense).  This vastly increases the inventory of sites that your content network targeted ads could show up on. Make sure you run you run regular placement reports to see how these new sites could affect your performance and exclude sites where appropriate.
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  To learn more about the content network, download David Szetela’s book, Customers Now..
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• September 30, 2009 – Viewthrough Conversion on the Content Network
  New reporting about “where your ad is seen, but not immediately clicked on”. As part of Google’s expansion into display, they’re ramping up measurement and analytics. Viewthrough reporting attempts to show the value of an impression to conversions.
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  There are two key limitations: first, there is no proof that a user looked at your ad. Second, it requires that you have AdWords conversion tagging. Proceed with caution…
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• October 2, 2009 – Google Increases Advertiser Bans
  Google permanently bans advertisers “who’ve submitted multiple sites that violate our landing page quality guidelines”. A number of advertisers were excluded from AdWords in a short period of time, according to reporting by Barry Schwartz on Search Engine Land.
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  Some have speculated that these changes were related to Google’s introduction of product ads through product extensions (see below) and specific types of websites and landing pages. There’s no official word from Google on their blog.
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  This post provides a good process for appealing landing page Quality Scores.
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• October 29, 2009 – New AdWords Comparison Ads
  AdWords Comparison Ads launch for mortgage queries (click to enlarge). Google has offered search suggestions and other forms of query refinement options for a long time. Now, they’re extended that concept into a structured experience starting in the mortgage/refinancing industry.
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  The new tool features a number of options to drill down: location, home price and income to name a few. The ads only show up in a limited number of areas and advertiser participation is currently by invitation only. They haven’t shared any details of how this will develop next or what kind of reporting will be offered. If you advertise in one of these industries, I suggest you contact your sales rep for more details.
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  Like the changes on the local business ads, Google is pulling more of the site experience to the SERPs themselves. If your business relies heavily on these kinds of tools (Progressive, I’m looking at you), you’ll want to keep an eye on how these ad formats change. You may have to differentiate less on tools and more on content..
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• November 3, 2009 – Ad Sitelinks in AdWords
  Some searches will produce ads that display up to 4 additional display URLs can be shown for “for ads that meet certain quality criteria” (click to enlarge). These are similar to the sitelinks you see in organic search listings, but you can explicitly choose which landing pages and text are eligible to be displayed (up to 10).
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  To setup ad extensions, click on the Campaign Settings tab and go to the “Show additional links to my site” section under “Ad extensions”.
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  The conditions that trigger these new ads are still somewhat unclear. A few things seem to be true: it’s for ads in the preferred position (above the free results) and those with a substantially better clickthrough than other ads. This is likely to be primarily brand terms.
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  Like many of the other changes to AdWords, reporting features to analyze these new options aren’t yet available. I’ve heard anecdotal evidence from my conversations at SES Chicago that the links improve conversion rate. Of course, you’ll want to be mindful of how these links push down organic results and potentially cannibalize that channel..
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• November 11th and 24, 2009 – Product Extensions Open to All
  Product images, titles and prices from Google Merchant Center appear alongside traditional text ads (click to enlarge). This feature links Google Merchant Center (previously Google Base) to AdWords as an ad extension, similar to site links.
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  This is in addition to the Product Listing Ads announced earlier. Product extensions are charged on a CPC basis, while product listing ads are charged on a CPA basis. Product extensions are open to everyone, but product listing are currently in closed beta.
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  This is, perhaps, the most aggressive step Google has taken in their New Ads Formats Initiative (see The Future of AdWords below). According to Google’s own blog post, some companies have seen a 10% CTR increase with product extensions.
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  This has two practical implications. First, those extra clicks can only come from 3 places: organic listings, competitor ads, or users who wouldn’t have clicked on any ad at all. In the case of the first two, you could lose (or win) clicks, depending on where you show up on the SERP vs. yoru competitors. Given what a strong component clickthrough rate plays in Quality Score and ultimately your CPC, you want to keep an eye on it.
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  Second, (and this is speculation) it’s possible that the people who click on an image ad may convert better for your business than those who click on a text ad. If they can see exactly what they want before they get to your site, they may be better qualified.
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  The bottom line is that this is Google’s game, these ads aren’t going away anytime soon and you’ll need to run experiments to see how it works for you..
  

Here’s an alternate version of the events listed in an interactive timeline:

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The Future of AdWords

Late in November, Google announced their “AdWords New Ad Formats Initiative” and declared “This initiative is Google’s next chapter in search advertising and over the next year it’ll be a major focus for AdWords”.

At SES Chicago, I asked Devin Sandoz, Product Marketing Manager for AdWords, about the guiding principles behind the initiative. He pointed to the evolution of organic search results, which have increasingly blended text ads with videos, images and news content.

While those changes occurred, PPC ads have largely remained text only. It’s possible that ads may not get clicked on as often.And now, they’re experimenting with videos, product extensions & location specific information to counteract the effect. For advertisers, this means you can take your existing campaign and Google will attach relevant information “when it makes sense.”

I think this is an important analogy which tips Google’s hand a bit about where AdWords is going. The evolution of the organic listings with universal search producing blended listings is likely to slowly make its way into the paid ads. Could personalized text ads be far behind? We already have session based retargeting with Broad Match (here and here).

It now means your performance has much more to do with the context of the SERP than ever before. Were you competing against product ads? Which sitelink did someone click? Are you fighting against a more robust comparison ad?

2010 is going to be a tougher year for AdWords advertisers. How are you planning to keep up?

The distinguished accounting firm of Anderson Cooper & Woods have finally tallied the ballots and we have our results.

The official top 9 best loved posts from the ClickEquations blog for 2009:

• The Economics of Quality Score
• Living In The Past: 10 Signs Your PPC Got Stuck in 2003.
• Broad Match is a Fishing Tool and You Should Be A Hunter.
• Keyword Suggestion: Think Like and SEO for PPC.
• Surprise: Bids Don’t Determine Your CPC.
• A Guide To Bidding on Brand Terms.
• Avinash’s Favorite PPC Tips.
• Why Adwords isn’t Good Enough.
• Introducing The DeTweet

Note that posts originally a part of a series were not eligible for this year’s awards. A separate ‘best series’ category has been created and winners shall be announced separately.

Cyber Monday is over, but the damage it could have done to your paid search campaigns isn’t.

The National Retail Federation estimates that 11 million more people planned to shop on Cyber Monday, a 14% over last year. This is just the beginning of the holiday rush. If you optimize now, you can make the most of the holiday season. Here are our 5 favorite retail cures:

1. Separate Out Your Brand Terms From Brand Plus Terms – Some of the fastest rising queries this holiday weekend were “Walmart Black Friday” and “Target Black Friday Deals Online”.
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   These are “brand plus” terms: some version of your brand modified. It’s the plus part of these search queries that can skew your performance and analysis.
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   Is a search for “walmart online” as valuable as “walmart black friday deals” or “walmart bath towels”? Can you effectively target them all with one text ad? Would you want to send all to the same landing page?
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   The answer to all three is, obviously, not. Many retailers lump together their brand terms with category terms with brand ones (ex: a Bath Towels ad group that includes “walmart bath towels”) or fail to separate out obviously different brand terms (ex: www.walmart.com).
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   Improve your targeting and analysis by separating your brand terms into unique ad groups and campaigns. Start here for some ideas.
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2. Tag and Analyze Multiple Conversion Events – Google’s Retail blog reported an interesting trend that “searches for “printable coupons” on Thanksgiving and Black Friday were up about 50% over last year. Google Search was also used to develop in-store shopping strategies, as “Walmart Black Friday Store Map” surfaced as a fastest rising term, blurring the lines between online and in-store shopping.”
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   This isn’t surprising to anyone who regularly reviews their search queries (see point #3), but it can be a real eye opener to exec who see a surge in traffic (and cost), but a decrease in conversions.
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   If you just analyze online sales, then the knee jerk reaction is to decrease bids as soon as conversions go down or pause words that don’t convert. But, you could be analyzing only a part of the value.
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   Chances are you have micro-conversions on your site that correspond to some value in offline sales or future sales:
   1. Printable Store Maps or Circulars
   2. Email Newsletter Signup
   3. Store Locators
   4. Find Local Ads
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   Each of these events need to be tagged and considered when you’re evaluating the effectiveness of your account. Sure, not everyone is as valuable as an online sale. And, yes, you can’t always perfectly tie them to revenue. That’s okay. Awareness is the first step.
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   Once you know, you can at least make an educated guess about the value/cost of keeping these keywords live. Plus, you now have a real reason and focus on closing your offline/online analytics gap.

3. Mine Your Search Queries – Holidays tend to bring out very specific search queries. Queries for deals, hours and hot products pop up more rapidly than in the rest of the year. Chances are that you’re using Broad or Phrase match. It’s almost a certainty, then, that you’re paying for searchers you can’t convert.
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   Take the time now to mine your search queries, the actual words someone types, not just the keywords you buy. Sort the list of your queries by cost and add the irrelevant ones to your negative keyword list. It’s one of the easiest ways to cut waste from your holiday campaigns.
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   For more info, check out our search query post or the Master Search Queries video.
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4. Check Your Lost Impression Share Due To Budget – Impression Share displays the percentage of the time that your ads were displayed to people who entered search queries which match your keywords (at their specified match types). It’s a Google only metric that is reported at the campaign level.
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   There are 3 additional diagnostic metrics that help you understand why you’re losing Impressions. Lost Impression Share (IS) Budget tells you when you lost impressions due to a campaign being underfunded. This is rarely a concern most of the time, but as the volume of online shopping increase, you could be hitting your caps. It’s an easy fix: if the campaign is profitable, increase the cap.
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   To learn where to find Impression Share and how to analyze, check out our Impression Share blog posts and white paper.
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5. Kill Underperforming Text Ads – Clickthrough rate (CTR) is one of the biggest factors in Quality Score and your text ads are far and away the biggest driver of CTR. Plus, you’re messaging will change as the holiday shopping season progresses.
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   Now’s the time to review your past text ads tests and weed out any underperformers. If you’re not already text ad testing, it’s the perfect time to launch some.

Worried that you’ve wasted money on Cyber Monday? There’s still time to optimize before the real Cyber Monday. According to research done by Comscore and the National Retail Federation, the biggest online shopping day hasn’t fallen on the Monday after Thanksgiving:

Researchers predict that Monday, December 7th will be the biggest for sales this year. Time to start optimizing…