ClickEquations Blog

It’s clear this whole social media thing is gonna get tiring real fast.

But before it does, please go vote for The ClickEquations Blog in the PPC Blog category at Search & Social.

Just click the image to your left. Scroll down to Best PPC Blog, then click VOTE.

Ice cream for everyone if we win.

It’s just an honor to be nominated. Really. Now I’m going home to work on the acceptance speech.

Update: OK forget it. I just went through the process of voting, and I really don’t want to put anyone else through that. Sheesh.

We’ll find another way to feed our ego. But thanks for offering.

The recent issue of SEM Journal published an article I wrote called ‘Shifting Paid Search to High Resolution‘.

You can download a copy of the article here.

This article described the process of High-Resolution PPC, which was developed as a way to structure the management of paid search around a new set of beliefs about how paid search really works. Many of those beliefs have been in the spotlight on this blog recently, and in our 21 Secret Truths of High-Resolution PPC ebook.

This article describes the framework into which all these truths fit. If you enjoyed the ebook, or the Secret Truth blog posts, check it out.

Numbers look like facts even when they’re not.

To make the best possible PPC management decisions it’s important to know the difference between the numbers in your reports which represent something that has happened and those that are mearly clues that need more investigation before you can possibly know what they really mean.

PPC Reports Don’t Present Raw Data

With thousands of keywords and hundreds of thousands of clicks (or more) in each account every day, we should be glad that the search engines or our management platforms don’t try to show us the raw data behind our accounts. It would be too much to handle.

Instead what we see are lots of sums and averages.

• The number of clicks on a keyword is the sum of all clicks from each individual search query that was matched to that keyword.
• The number of clicks on any search query is the sum of all clicks from each geography or person.
• CPC, position, revenue-per-click, and many others are averages – sometimes labeled as such and othertimes not. We’re never told the distribution of the data.

Look Behind The Sums

The first place we look when reviewing our paid search accounts is at campaign and ad group level performance data. Here every number is a sum or an average.

These reports can be very useful when we’ve come to know and trust the data behind these numbers. But it’s easy to mistakenly assume or presume that the summed numbers tell you something they don’t about the contents of any one group.

• You can’t see when two data elements cancel each other out. For example, if one ad group surged by 50% while another fell by 50%, the campaign data can report a flat month-over-month number. You can miss important changes ‘inside’ the data.
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• You can’t see when one data element overwhelms the others. If an ad group shows a terrible ROI or CTR, there is no way to know that one or more keywords inside are hugely profitable or have fantastic CTRs. The good can overwhelm the bad, or visa versa.

When looking at campaign, ad group, and even keyword reports, of course you want to react to the numbers, watch their trends, and compare them to their peers. But make sure you know the numbers behind these numbers.

Before taking any action, dive in and look at the numbers underneath. You may not always have the time to make the necessary changes – so you may still need to take the broad action – but you may find that in the long run the change you had planned is not the right long term solution.

Don’t Believe The Averages

When AdWords tell us that a keyword had an average position of 3, it’s hard not to think and act as if it was ‘usually’ in position 3, or even that it was almost always at or near position 3.

But this may or may not be the case.

As Google Analytics shows, most keywords (their ads really) get placed in a very wide range of different positions and the average reported in the interface is just that – an average. The keyword you think about as having been in position 3 was probably seen by many people while in position 5 and seen by others in position 1.

Click To Zoom
This keyword was in positions as diverse as Top 1 and Left 6 during a 1 month period.

Averages without standard deviations – as someone used to tell me – are rather worthless.

The joke he told to illustrate was about a comedian told to prepare material for a birthday party where the average guest was 35 years old. As you might imagine, he included a little colorful language in the routine he had planned. Only to be shocked to arrive and find a birthday party filled with 3 year olds and their 73 year old grandparents.

Taking the distribution of the data that makes up the average into account is especially difficult when you don’t have access to it.

• We see quality score reported for our keywords, without any way to find out the different quality scores earned across the different geographies where the associated ads were shown, or the impact of the different text ads that the keyword displayed.
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• We see CPC data for each keyword, without any way to find out the different CPCs that were actually charged for each different search query that was matched, or the impact of the quality score, geography, ad copy, etc. (Did you even know that CPC was an average too?)

Don’t Believe What You Read

The Boomtown Rats had it right. The numbers we get back in PPC reporting systems are not always what they appear. Teach yourself to view them a little skeptically, and definitely not conclusively. Analysis always has to follow data.

Sums and averages are necessary because we can’t usually handle raw data. My point isn’t that these reports aren’t useful or presented properly. But rather that it’s important to know what the data is and what it isn’t, and to know how to take the next step to learn more about any particular number that raises questions.

In many cases the numbers behind the numbers are just a click away. You just need the time and inclination to go look at them. In other cases, the engines still aren’t sharing enough details, and we all need to pressure the engines (with whom we spend so much money) to provide us with the data we need to make fully informed decisions.

What Do You Think?

This blog post is part of a series extending and amplifying the ideas in our free ebook ’21 Secret Truths of High-Resolution PPC’.

What they’re saying: “If your goal is to be the best you can be at paid search, then your path goes through this book. When Craig talks I listen, mesmerized. You should too because being wise is great!.”

- Avinash KaushikAuthor of Web Analytics 2.0 ’.

Download Your Copy Today
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The folks at Google are masters of the art of positioning.

Nearly every element of their products – at last the core ones like AdWords and Gmail – and even moreso their public statement describing features and rule changes – make them look unbelievably helpful and benevalent.

Obviously, much of what they do is really great and has benefit to us as users and advertisers. So this isn’t that surprising even if the skill of it is impressive.

But other times, when what they’re doing is primarily in their own interest and of limited value to the advertiser, they’re still somehow able to describe everything in a way that makes you want to thank them for being so kind. Remember the announcement of expanded-broad-match, or the non-announcement of session-based matching?

All of which leads, unexpectedly, to Secret Truth #12 – From the advertisers viewpoint, quality score really is a measure of qualty.

Who Beneits? Follow The Money.

In a perfect world it really is in Google’s interest to create features and set rules that benefit searchers, advertisers, and Google themselves.

• If users aren’t satisfied with they’re Google experience they won’t come back, or at least may not conduct as many searches.
• If advertisers aren’t satisfied they will cut budgets or bids.
• If Google isn’t raking it in then the free Odwalla drinks in the lobbies may have to go

Of course, not every decision can share the benefits equally. Most don’t. For a lot different reasons, and much of the evaluation is naturally subjective. But broadly speaking quality score does share the wealth pretty fairly.

• Users have a better chance of seeing ads that will satisfy them relative to their query and intent.
• Advertisers get more traffic from ads that satisfy users at a lower price, and are discouraged from wasting money on inappropriate ads.
• Google satisfies its searchers, its advertisers, and maximizes revenue.

Let’s look at each of these in a bit more detail.

Quality Score And Searchers

I was on a panel at SMX with Nick Fox of Google last year, and he explained quality score as being in many ways a ‘wisdom of the crowds’ system.

If a lot of people who searched was matched with a particular keyword clicked on a particular ad, that ad is by definition of high quality. It was ‘voted’ as being good by the people who matter. It’s hard to argue with that logic.

This why CTR is by far the largest and most important element of the quality score calculation.

Quality Score And Advertisers

The fact that high quality scores reward you with more impressions, higher positions, and lower CPCs, while low quality scores do the exact opposite, is good for advertisers. If you accept (for the moment) that the quality score calculation has effectively rated the likelihood of your keyord-ad combo to succeed in attracting a particular searcher, they it’s good for you as an advertiser that AdWords shows your ads more when it’s got a higher chance of success and less when it has a lower one.

It’s even good, in a slightly strange way, that they give you a discount when your quality score is high and make you pay a penalty when it is low. Like all taxes the penalty is meant (partially) to shift behavior.

They’re giving you a low score, making that (sort of) clear, and charging you more (less clear, but still true) – they’re really asking you to fix the problem or quit advertising.

It may be tough love, but it can be considered well intentioned.

Quality Score And Google.

Make no mistake about it. Quality Score is a revenue optimization algorithm.

Ads which get the most clicks (and therefore drive the most revenue) are promoted while ads that get less clicks (and generate less revenue) are supressed. And you can be sure the discount given for high quality scores is more than made up for in the volume of clicks and total revenue they generate.

This is where the win-win-win comes from. Google makes less money if you have low quality scores. They don’t need the bell curve. Every time you improve quality score, they make more money. They really don’t want to see you suffer with those QS=3 keywords!

The Devil In The Details

We could talk endlessly (and have) about the details of all the elements which influence quality score, and how fair or accurate they are in really predicting quality. Those are fair discussions, but broadly speaking there is little doubt quality score works and google is working pretty consistently to make it better – in ways that will continue to benefit all parties for the reasons described above.

It’s worth knowing the details of how it’s calculated so you can take actions to increase your scores. It’s worth knowing how it’s used so you can intelligently react to your scores.

But mostly it’s worth doing the work that results from that learning to actually improve your scores, or make the tough decisions to stop buying keywords where your score are bad and probably always will be.

Quality score is a tough and not entirely transparent task master. But I do believe that quality score is your friend.

What Do You Think?

This blog post is part of a series extending and amplifying the ideas in our free ebook ‘21 Secret Truths of High-Resolution PPC‘.

What they’re saying: “Everything you know about AdWords is the basics Google wanted you to know. Just enough to get you hooked. But what if there was fundamental secrets that they neglected to share? Would you want to know them? Now you can! 21 Secrets Truths is what you must read, no, act on, before your competitors do.”

- Bryan Eisenberg Conversion Expert and New York Times Best-Selling Author ’.

Download Your Copy Today
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The idea of creating highly targeted ad groups, so that all of the attracted search queries are well aligned with the included text ad copy, is one we’ve written about often.

One of the drivers is the fact that better alignment drives up click-through-rates and thereby quality score.

A number of recent conversations have suggested that this good idea, like many others, is being taken to absurd extremes.

I’m talking about the practice or ‘recommendation’ of limiting ad groups to a single keyword.

Single Keyword Ad Groups Have No Quality Score Advantage

The primary reason I’ve heard for this practice is improved quality score. But it won’t work.

The quality score of a keyword in AdWords is based primarily on the CTR, from a specific geography, of search queries that exactly matches a that keyword. There is an impact from the historical CTR of the entire account, of the relevance of the query-keyword-ad, and the potential of penalties from the landing page. There is no factor in that definition that would favor a single keyword alone in an ad group.

There is no ad group quality score. There is no benefit from keyword loneliness. There is no ‘lots of ad groups’ bonus.

Isolating keywords in-and-of-itself does not help quality score. There is really no way any keyword can impact, positively or negatively, another keyword in terms of quality score.

The Right Number of Keyword Per Ad Group Is…

So how many keywords should be in an ad group?

Assuming we want to maximize quality score and overall results, the answer is: as many as will attract search queries that are directly addressed by your text ads. You may recall that we want to work from the text ad (or text ads) backwards. So the number of keywords really isn’t important. What matters is the alignment of the search queries (and the intents they represent) with the text ads.

If there are a lot of different keywords needed to match and attract all the different search queries that people use to say essentially exactly the same thing, then your ad group should have a lot of keywords. If there is only one keyword that is needed to match and attract to every search query that is directly addressed by the text ads in your ad group, then your ad group should have one keyword.

But the one keyword situation is likely to be very rare.

You don’t want single keyword ad groups, you want single-minded ad groups. If they attract synonymous queries, the more keywords the better.

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