The ClickEquations Blog » High Resolution PPC

Bad Stats and Good PPC

Craig Danuloff — Mon, 03 Jan 2011 12:32:10 +0000

Testing is the core activity of good paid search management. We’re trying to find the keywords, match types, bids, ad copy, and landing pages that produce optimal results. The only way to figure that out is to test.

But testing in paid search is very difficult, for a number of different reasons.

There are a lot of interacting variables – it’s a complex system.
Critical data is hidden from us – we can’t see what’s happened.
Our tools don’t facilitate testing – which is just crazy.

On top of these we have a statistics problem. Two of them actually.

The math we need isn’t trivial
The data we usually have is sparse and dirty

All of these issues come together every time we look at something in our account – be it a keyword or text-ad or ad group – and based on the data we see decide to make, or not make, some kind of a change.

Of course, we’re just acting on the information we have using the tools at our disposal. But the fact is that we’re making a boat load of assumptions and accepting a lot of averages and approximations. But the biggest risk we’re often taking is in assuming that we’ve got enough data to decide.

Very few of our keywords or text ads – out of the thousands upon thousands in our accounts – get hundreds or even dozens of clicks or conversions. And when there are double or triple digit numbers, the truth is the data isn’t pure at all – it’s a roll up of many different queries and geographies and days and times.

If a keyword converts 4.5% of the time based on 100 clicks that turn out to be from 39 different queries, 76 different cities, 13 times of day, and all on Sunday – does that tell you anything about what’s likely to happen with the next 100 clicks that originate from different queries, cities, times, and days? Maybe. Maybe not.

The risk of turning off a winning text ad, due to not waiting for significant data based on a narrow and known set of variables, is real. In many cases the changes made in paid search accounts, due to all the limitations listed above, are essentially coin flips masquarading as educated guesses pretending to be informed decisions.

And now it turns out we’re even farther from data we can trust that we knew. Even real scientists practicing controlled experiments with what is, by comparison, perfect data, aren’t getting the right answers because even their ‘perfect data’ isn’t enough to tell the truth.

In this amazing article called The Truth Wears Off is worth the time to read fully. In it they explain how scientists are finding that their carefully controlled and ultimately professionally vetted and published results are, over time, proving to be far less certain than they originally appeared.

Here’s one example:

“In the late nineteen-nineties, John Crabbe, a neuroscientist at the Oregon Health and Science University, conducted an experiment that showed how unknowable chance events can skew tests of replicability. He performed a series of experiments on mouse behavior in three different science labs: in Albany, New York; Edmonton, Alberta; and Portland, Oregon. Before he conducted the experiments, he tried to standardize every variable he could think of. The same strains of mice were used in each lab, shipped on the same day from the same supplier. The animals were raised in the same kind of enclosure, with the same brand of sawdust bedding. They had been exposed to the same amount of incandescent light, were living with the same number of littermates, and were fed the exact same type of chow pellets. When the mice were handled, it was with the same kind of surgical glove, and when they were tested it was on the same equipment, at the same time in the morning.

The premise of this test of replicability, of course, is that each of the labs should have generated the same pattern of results. “If any set of experiments should have passed the test, it should have been ours,” Crabbe says. “But that’s not the way it turned out.” In one experiment, Crabbe injected a particular strain of mouse with cocaine. In Portland the mice given the drug moved, on average, six hundred centimetres more than they normally did; in Albany they moved seven hundred and one additional centimetres. But in the Edmonton lab they moved more than five thousand additional centimetres. Similar deviations were observed in a test of anxiety. Furthermore, these inconsistencies didn’t follow any detectable pattern. In Portland one strain of mouse proved most anxious, while in Albany another strain won that distinction.

The disturbing implication of the Crabbe study is that a lot of extraordinary scientific data are nothing but noise. The hyperactivity of those coked-up Edmonton mice wasn’t an interesting new fact—it was a meaningless outlier, a by-product of invisible variables we don’t understand.”

The article, nor the scientific community, doesn’t seem to have a conclusion about why strictly followed scientific procedure is turning out inaccurate or at least inconclusive. The options are a publishing bias, a world that has no stability, or the need to vastly expand the minimum definition of required data for a valid test.

In the meanwhile, be careful cutting bids or or killing keywords based on a few dozen clicks over a couple of days…

Coda

The issues of testing, getting good data, and doing a better job managing the statistics that most of us (and our tools) ignore is one I hope to cover a lot in the coming year. If we want to genuinely optimize our spend and our revenues, the status quo is clearly insufficient.

Happy New Year

Google Grants Clarity on Search Network Stats A nice surprise from Google today, with the release of...

Secret Truth Series #15: Bid Lipstick on a Keyword Pig

Craig Danuloff — Sun, 02 May 2010 21:35:19 +0000

Bidding is the magic elixer of paid search.

It’s the solution to any problem, the driver of all success and the cause of all failure. Once you have the right keywords, bidding is the main activity of paid search management.

It’s critical to get your bids right. If your bids aren’t properly set, intelligently managed, and constantly cultivated it’s effectively impossible to succeed at paid search.

This all is common knowledge.

And it’s all untrue.

The idea that bidding is important/critical/central to paid search is based on several assumptions:

We have good data on which to make bid decisions.
The data we have from the past is predictive of the future.
Our algorithms are able to take this good and predictive data and recommend a better bid
The effect of a bid change is clear and direct

Let’s look at those one at a time.

Lipstick On A Pig

Keywords are the false gods of paid search, as we discussed earlier, but they have another problem too: keyword metrics aren’t really reporting on the keyword itself, but rather on the combination of the keyword and all the options that are set around it.

Click-through rates and conversion rates, for example, are the result of how targeted the search queries were based on the match type used and the quality score received, how appropriate the ad copy was for those queries, and how persuasive the landing page and offer were to the people who clicked through.

That same keyword matched to different queries, with different ad copy, and different landing pages and offers would/could perform much differently. It’s shorthand to say that the keyword had a 2% conversion rate – it was really the entire advertising program built around the keyword that earned that result.

Yet bid algorithms, with our approval, make bid decisions as if the keyword metrics were much more conclusive than they really are. Suppose the queries change (which they do every day) or the ad copy is rewritten or tested (which it should be several times within the 30 day window used for most bid decisions). Isn’t it kinda kookie to ignore these variations and just pretend that the data is clear or reliable?

In ‘21 Secrets‘ I talk about getting keywords ‘bid ready’. The idea is to create a stable and functional environment around the keyword, to deliver better and more stable data, before putting much effort into bidding.

As the book points out, worrying about bidding on keywords before they’re ‘bid-ready’ is a text-book case of garbage in, garbage out.

Past Results May Not Suggest Future Performance

So if our keywords aren’t bid-ready the data on our keywords is pretty dirty. And in most cases (probably 80% of active keywords) the data is also really sparce. There just aren’t many clicks or conversions on most keywords over a week or even month long period.

Predicting the future based on sparce data about the past is extremely difficult.

And even is there is plenty of data, it’s a pretty big assumption to think that last week is gonna be like next week.

The world and our businesses don’t operate at a steady state. So even if we’re not in a strictly cyclical business – where summer dresses have a rise and fall – there are all kinds of time-based or external factors from competitor promotions to weather to holidays to news events.

One only has to look at a performance trend report of any keyword – on CTR, conversion rate, even impressions – to see that if you picked any one period from the past and projected forward as if that period was representative, you would have misjudged a bunch of what in fact happened later. Yet that’s what the bid algo’s do.

It’s hard not to believe numbers – as pointed out in the recent post on averages – especially when we’re working so hard to get them. But it’s not really that the numbers are lying, we’re just reading more into them then they can accurately provide.

The Smart Black Box or The Perfect Rube Goldberg

But forget all of that – take all the imperfect data, assume the past predicts the future in ways it probably doesn’t, decide which and how much data to consider (another massive black hole we’ll skip over), and hand it over to your bid algorithm for analysis and a recommendation.

There are all kinds of bid algorithms. Some use simple math while others rely on very complex mathematics.

There are also all bid rule systems (which differ from algorithms) and base decisions on a series of measured factors and nested If/Then/Else criteria.

Few or none of these take into account that the data they’re based on may be flawed or even terrible.

All of them ignore dozens or perhaps hundreds of variables and factors that almost anyone would agree clearly effect ‘the right bid’.

Regardless, they do their best and out comes a new bid recommendation. Good luck with that.

Why Does The Garage Go Up When I Flush This Toilet?

What does raising (or lowering) your bid mean anyway? The relationship is not simple nor direct.

We know how bid connects to Ad Rank (Secret Truth #9) and how Quality Score impacts bidding (Secret Truth #10). Together these explain that what we’re willing to pay (our Max CPC or Bid) is only indirectly related to our the amount we do pay (our actual or average CPC).

And many other factors are at play:

In some cases, our actual cost-per-click is far below our bid. In other cases, our cost-per-click is consuming 100% of our bid.
If we change our bid but our position (ok, average position) doesn’t change, what effect did the bid change really have?
Quality score is unique to every keyword-text ad combo, changes per geography, is influenced by the query, and evolves over time.
Raising a keyword bid also expands the scope of matched queries for which you can enter the auction and earn sufficient ad rank to appear. So like butterfly wings changing your bid alters the environment you were trying to control or effect.

I could go on. And yet just about every bid algorithm I’m aware of ignores – all this and more.

It’s hard to shake the notion that bid up = pay more = higher position, but strictly speaking it’s far from that simple.

The Twenty Percent Solution

So what is an advertiser to do? Two things:

1) Spend your time organizing and optimizing your campaigns and keywords before you worry much about bidding. As the 21 Truths in this series highlight, there are a lot of ways to impact your results that are directly within your control. Master them.
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2) Think about bidding as having *at most* a 10-20% impact on your success. Bids interact with keywords and match types and quality scores and text ads and landing pages and everything else. Treat them as part of the system.

It was via Brad Geddes via David Szetela that I first heard the significance of bidding put into its place with these kind of numbers. I’m pretty sure I later saw Dennis Yu give a clever talk and example that drove home the same point. I’m sure others have said it as well.

There is no way to say whether bidding in general a 5% factor or a 45% factor – it doesn’t matter and it certainly varies from keyword to keyword.

But what is clear is that for even the best bid algorithms or rules or strategies to do their job, they must be applied to well designed, managed, and optimized campaigns and keywords.

A good bid on a bad keyword (or based on bad keyword data) leads to a bad result.
A good bid on a good keyword-system plays an important role and can absolutely make or save you money.

Bidding Is Important

This post wasn’t intended as bid-bashing. As the book says, I believe you should spend a lot of time on bidding after you’ve spent a lot of time on everything else.

But bidding is very often over-emphasised, mis-represented, and mis-prioritized.

The right way to bid, the right algorithms, the role of rules, the solution to sparce data, the implications of time, the way to factor in all the factors – these are all topics for another time and place.

Until then, make sure your keywords are ready before you set or manipulate their bids. And have reasonable expectations for the bids and bid changes you do make. They’re doing the best they can, but the available information and state of the technology limits severely limit their potential.

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 ’.

Related posts:
Secret Truth Series #14: Ego Bidding & Keyword Rehab We hear alot about the roles logic and emotion play...

Secret Truth Series #10 – Bids and CPCs The AdWords auction is not a purely economic auction. If...

Secret Truth Series #9 – What’s Your Ad Rank? Another great misconception, or over-simplification, of paid search is the...

Secret Truth Series #14: Ego Bidding & Keyword Rehab

Craig Danuloff — Fri, 23 Apr 2010 13:37:38 +0000

We hear alot about the roles logic and emotion play on the buyer side of commerce. They make purchase decisions emotionally and work to justify them logically seems to be the process we’re playing into.

Logic and emotion exist on the seller side too.

Nearly every paid search account has keywords – sometimes a few sometimes a lot – that are not performing well based on objective performance criteria, and yet never get paused or even bid-reduced.

Ego Bidding and Beyond

These are keywords that we choose to exempt from the laws of the ppc jungle: deliver ROI or be paused. They include those we want to work (derivations of our brand, category terms we think important, etc), and those we think should work (variation on phrases that do work well, highly-specific words and phrases, etc.).

The reasons and philosophy could be discussed and argued all day. In any case, three steps are in order:

Admit the Problem. There are poorly performing keywords in your account. That needs to be recognized and addressed. Until it is two things are true – you’re wasting money that maybe you don’t need to be wasting, and all your roll-up numbers and averages are even more questionable than they usually are (see ST 13)
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Isolate The Poor Perfomers. To face the waste and improve the reporting in your account, move poor performers into their own campaigns and ad groups. This not nearly as easy as it should be, but it should be done despite the effort. The beneift is that you A) See the total spend that is non-productive. A nice big fat number that you have to accept or react to. B) All the campaign and ad group reports of your good keywords will be far more consistent, accurate, and actionable.
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Note: AdWords Editor has cool drag/drop support that can be used to move keywords and text ads between ad groups. The next release of ClickEquations has dramatically improved Bulk features that make it pretty easy to move keywords and corresponing ads into any new or existing ad group too.
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Fight or Concede. Some of the poor performing keywords will likely improve their performance significantly. They’re ego-bids or ‘branding’ efforts or whatever. Move these into their own campaigns and verify that you’re comfortable with that level of waste (economically speaking) and whatever drain on your account average quality score these keywords will produce. If there are a lot of them, with high impression counts, you may want to setup a 2nd AdWords account and move them there to avoid the quality score impact.

Other poor performing keywords need to go to Rehab. They need a hot shower, a clean shirt, new friends, and 24×7 monitoring. Non-metaphorically, they need new text ads, better landing pages, more negatives, and perhaps better match type sculpting. All the stuff we discuss in all the other blog posts. The point is, work hard and find out how to make these keywords work. When they do, move ‘em back into the regular campaigns and ad groups.

How Bad is Bad?

The real question many will face is ‘what is the threshold for a poor performing keyword’? How bad is so bad that you need to mark a big ‘L’ on its forehead?

Let’s assume for the moment that you’ve settled on an intelligent revenue attribution model, and it’s not last-click

Pull data from a timeframe that is at least 2x your average purchase cycle. So if the average visitor converts within 21 days of their first visit (you know this number, right?), grab six-weeks of data.

The first obvious candidate set is zero conversions and or zero revenue AND at least a modest spend or impression count. Modest is relative, but I wouldn’t worry much about keywords spending <$5 week or getting less than 20 impressions a week. (These are low numbers, for larger advertisers the noise thresholds would be much higher.). But meaningful activity and no results should clearly mean a trip to ad group Siberia.
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The second set would be those with at least modest spend or impression count AND some revenue BUT negative ROI or ROAS. These are clear technical money losers. They need to be reconsidered and rehab’d or given up on.
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The third set are those positive but not positive enough. These are most likely rehab candidates, but still deserving of their a seat at the kids table until they prove then can act like adults. How many metaphors can I squeeze into this post?

Separating Logic From Emotion

There are two reasons to do all of this.

The first is to group keywords by their economic value and your motivation for keeping them. As it says in the ebook, we all have brands to build and egos to maintain – it’s not surprising that we run some unprofitable keywords. Once grouped appropriately you can make (hopefully) better decisions and prioritizations or resources within your account.

The second is that after pulling away all the riff-raff, your profitable campaign and ad group reports will be vastly more clear and actionable. It may take some time to get used to the new sums and averages, but they’ll be more trustworthy and actionable. It may in fact be that after taking these steps you don’t immediately go to work on the losers, but instead polish your winners even more for a while.

But when you do get to them, my guess is you’ll apply less emotion, more logic, and wind up pausing more keywords, bidding less, fixing a few, and improving your overall results.

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
.

Secret Truth Series #15: Bid Lipstick on a Keyword Pig Bidding is the magic elixer of paid search. It’s the...
The Secret Truth Series #5 – Impression Share We’ve written about the AdWords impression share metrics often in...
Secret Truth Series #13: The Average Lie Numbers look like facts even when they’re not. To make...

Applying High-Resolution PPC To A Paid Search WorkFlow

Craig Danuloff — Mon, 19 Apr 2010 22:56:48 +0000

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.

The Origin of High-Resolution PPC 21 Secret Truths of High-Resolution PPC is our soon-to-be released...
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Secret Truth Series #13: The Average Lie

Craig Danuloff — Sun, 18 Apr 2010 11:10:30 +0000

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
.

Secret Truth Series #14: Ego Bidding & Keyword Rehab We hear alot about the roles logic and emotion play...
Secret Truth Series #15: Bid Lipstick on a Keyword Pig Bidding is the magic elixer of paid search. It’s the...
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Secret Truth Series #10 – Bids and CPCs

Craig Danuloff — Sat, 27 Mar 2010 14:09:42 +0000

The AdWords auction is not a purely economic auction. If it were the high bidder would always win.

But in the AdWords auction the high bidder can wind up in 1st, 3rd, or 5th position – or even wind up out of the game with nothing.

Imagine a new kind of eBay auction; one where you could browse for a searcher or search query you wanted to have see your ad, and enter a bid. The auction would go on for a while – maybe a few hours – and you would even be notified when you were or were not the high bidder.

Like many eBay auctions there would be some jockying for position as the end nears. First you’re you’re the high bidder, then you aren’t, and then you are again.

Now pretend that as time expires, it turns out you were in fact the high bidder. But just before the display updates to say ‘You’ve Won’, a funny thing happens: eBay applies a secret multiplier to everyone’s bid. Some bids are multipled by 3, while others are multiplied by .3. The ranking order of the results is completely transformed.

You – the ‘high bidder’ – winds up in 3rd place. Someone with a rather low bid vaults to the top and they’re declared the winner. They pay only a fraction of what you had offered and yet win the auction and claim the prize.

If you were bidding in these kinds of ebay auctions, once you understood the game, would you focus purely on your bid?

Wouldn’t you want to learn all you could about the secret multipier and try in influence that? Wouldn’t you feel a little silly just bidding in earnest as if there were a direct relationship between your bid and the result?

Ignoring The Secret Number

Yet make no mistake, this is how the AdWords auction works. Everyone bids in the same currency (effectively) but that bid is then transformed by a secret number before the winner (or rankings in this case) is declared.

The secret number, in this case, is quality score.

Your bid is not multiplied by quality score, but quality score transforms the results of your bid none-the-less.

To see the actual way bids are calculated, read Secret Truth #10 in the book.
(Note: the download sign-up will have some downtime today, 3/27, sorry)

Bids impact, but don’t drive, CPC. Repeat that to yourself a few times. “My bid does not drive my CPC – My bid is only one factor that impacts my CPC.”

My View of Bidding

I’ll admit it. I kinda have a chip on my shoulder about bidding.

I’m not a big fan of over-simplification to begin with (hence the whole ‘high-resolution’ thing) and with bidding there are only two modes – over-simplified and mind-bendingly complicated. Guess which one most everyone chooses?

As described earlier, the idea of bidding-for-position is obsolete and inaccurate. And now we see that bidding does not directly define CPC.

Bids indicate the maximum amount you want to pay for any single click. But they’re only one factor in the determination of your ad position, and beyond that they’re not a factor in the calculation of CPC.

None of this is to say that bids don’t matter. They matter a lot. They have an impact – changing them has an impact and not changing them has an impact.

Plus, bids are concrete. Bids are accessible. Bids are easy to understand, even if they summarize or stand for something that on further inspection isn’t entirely true.

What Bids Do and Don’t Do

There are four key steps in the AdWords Auction. Let’s examine the role your bid plays in each:

When someone executes a search, quality score is calculated for the keywords in your account which may be eligible for the auction. Bid plays no role in the calculation.
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AdWords determines whether or not your ad (via your keyword) is eligible to be in the auction. Bids are a direct factor, because there is (despite the retirement last year of the Minimum Bid metric) a minimum bid to trigger display for any particular query. This is by no means the only eligibility requirement.
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AdWords calculates Ad Rank to determine your position in the results. Bid is direct factor, as discussed in Secret Truth #9.
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CPC is calculated to define how much you’ll pay if the ad is clicked. Bid isn’t involved beyond via the role it played in the deciding your Ad Rank. Really this is a Quality Score driven issue.

Putting Bids In Their Place

The punchline is that bid management and quality score management should, at worst, get equal attention in the process of managing paid search.

A year or two ago, almost nobody was talking about let alone working on quality score. Now the topic gets a lot of attention, but the confusion remains thick and the specific action steps are often not well defined. Quality score reporting has improved dramatically, but there still is a lot of information that we’re missing. We’re making progress, but there remains a long way to go.

There are two more Secret Truths concerning quality score, and two more concerning bidding, so we’ll cover more specific ground in those sections of the book and in future posts in this series.

Earlier I asked you to stop thinking about position purely as a result of bidding. Here I’m suggesting that you also stop thinking about cost-per-click as a direct bid result as well. These shifts will help you to have reasonable expectations for bidding, and to remember to consider and pay appropriate attention to qualty score in order achieve your position and cost related goals.

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
.

Secret Truth Series #15: Bid Lipstick on a Keyword Pig Bidding is the magic elixer of paid search. It’s the...
Secret Truth Series #9 – What’s Your Ad Rank? Another great misconception, or over-simplification, of paid search is the...
Secret Truth Series #11 – How AdWords Quality Score Impacts CPC The Max CPC and quality score of a keyword determine...

The Secret Truth Series #7 – Opt Out Of The Content Network

Craig Danuloff — Tue, 09 Mar 2010 15:02:03 +0000

Google wants to make advertising easy. They describe AdWords in simple terms, they make setup quick and easy, and they provide simple reporting on the stuff that suggests progress.

But the gun has no safety.

AdWords makes it remarkably easy to do insanely stupid and wasteful things. Things they could easily prevent at the cost of simplicity for you and revenue for them.

Take content network advertising, for example.

The idea of bundled, co-mingled search network and content network advertising is crazy. The two have almost nothing in common. Mixing them assures poor and confusing results. And yet bundling is the system default.

So you should un-bundle.

Why Search is Not Content and Content Is Not Search

Google search and the search partners are search query based. Ad show when people execute specific searches matched to your ads via keywords and match types and quality scores and bids.

The content network is site targeted or contextual. Ads show when people are visiting a specific site or type of content, based on keywords and quality score and bids.

They keywords are different (one is an attempt to match queries, the other content), match types are different (content doesn’t have them), quality scores are calculated separately using different formulas, performance is wildly different (much lower CTRs on content networds in most cases), the types of ad copy that is effective is different, and on and on.

The fact that AdWords opts you into an automatically inappropriately managed advertising channel is astounding. It’s as if there were a ‘Waste 25% of my budget’ option. And they checked it for you by default.

Do not accept their kind offer.

The Content Network Is A Good Place To Advertise

None of this is to say that there is anything wrong with the content network. There was a few years ago, and Google has done a great job of improving it to the point where it is a viable and valuable advertising channel if appropriately managed.

But it has to be managed on its own terms, independantly of the search networks.

It works differently, had different options, and different success metrics. It’s a different advertising channel.

You should learn about the content network, allocate time to exploit it, and profit from it. But don’t get fooled into thinking that if you don’t have the time or knowledge to do so you can just tag it onto your search campaigns and get even marginal results. Do it right or don’t do it.

NOTE: Other than this one, the 21 Secrets of High-Resolution PPC are focused on the search networks. To learn more about the content networks, we recommend the book ‘Customers Now’ by David Szetela. (You can get a free ebook download, or order a hardcopy version.)

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 ’.

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The Secret Truth Series #6 – Success Through Negative Brand Keywords

Craig Danuloff — Fri, 05 Mar 2010 17:10:48 +0000

A few years ago when asked for the #1 tip to improve a campaign, I wrote that segregating brand keywords was the task that I thought nearly everyone should do, many haven’t done yet, and can offer huge benefits in any campaign.

As covered in the discussion of Secret Truth #3 and #4, when the keywords within an ad group or campaign have inconsistent business goals or performance profiles, the quality of your results suffer.

There are probably no keywords in your account that have as distinct business goals or performance profiles as brand keywords – which is why they really need to be isolated.

Should You Bid On Your Brand?

The wisdom or necessity of buying paid search on your brand keywords – where you should rank #1 (or at least) very high in the organic results, is often discussed. In the end, most decide that buying the paid search coverage is a good idea, even if you have multiple prominent organic links.

We agree that bidding on your core brand names and terms is worthwhile.

There are several reasons for this:

If you don’t buy those links someone else will
Many report a ‘brand halo’ effect in which the paid listings actually increase organic traffic
There are people who click paid links over organic ones, for various reasons
You’ve already spent a lot of money to build the reputation that generated the branded search. Paying a few cents for the ‘last mile’ of the click to actually get the visit is a prudent investment.
It’s great to see huge CTR and conversion rates in your PPC account
The huge CTR of your brand terms actually drives your account CTR history up, helping overall quality score

Types of Brand Keywords

The diversity of brand keywords can be surprising. But to really ‘answer the question’ (Secret Truth #1) it’s critical to figure out all the different ways your brand is being used by carefully examining your search queries (Secret Truth #2).

We typically see several types of brand keywords:

Brand Pure Keywords
Navigational Brand Keywords
Brand Related Keywords
Brand Plus Keywords

What we call ‘pure’ brand keywords are the most narrow and focused set. This includes the brand word or words themselves, mis-spelling and deviations, and not much else. These we isolate into their own ad group or even campaign.

The next set, and often largest by keyword count, are navigational keywords. The searcher is trying to find your company or even your website. Navigational keywords include ‘brand website’, ‘brand homepage’, ‘brand company’, ‘brand city-name’ and the all important ‘www.brand.com’ (yes, people google that) plus many others. All of these clearly navigational terms should be bundled into their own ad group.

Then come the brand related keywords. These include things like executive names, other terms and other phrases that may be connected with the brand. A lot of these will be developed as you query-mine the results you get from your initial broad match pure brand keywords.

Your business may have and need other clusters of brand keywords too. A business with a lot of retail locations would likely have a whole ad group full of ‘location and store locater’ words and phrases. There may need to be groups for your PR issues, your financial/investor issues, etc. Create as many as you need, and follow the ideas for campaign and ad group organization discussed in Secret Truths #3 and #4.

Brand Plus Keywords

The final set are those we call brand plus keywords. These include your brand plus category, product, or other keywords. These are the ones that are often mixed in with other non-brand keywords and that we’re most strongly recommending you separate out of your typical existing campaigns and ad groups.

Here’s the problem. Suppose you sell dog collars of your own making, and right now your dog collar ad group has the following keywords:

dog collars
puppy collars
collars for dogs
hemp dog collars
MyBrand dog collars

Of course this is an over-simplified example and there would be many more keywords and perhaps spead over several ad groups. But the point is that if ‘MyBrand’ is the house brand item, that keyword should be put into it’s own ad group and we would strongly recommend moving it into the main brand keywords campaign, or more likely a separate brand-plus campaign.

The rational is the same as we’ve discussed for both campaign and ad group organization; the alignment between query and text ad is best served by a very specific kind of ad, and the numbers these brand-plus keywords produce will only confuse the performance and results when mixed with non brand keywords.

Obviously if you have tons of brands and categories, doing the separation can be a lot of work. As always, prioritize based on volume – get those brand-plus keywords that are attracting a lot of traffic moved into their own ad groups and if possible campaigns first. Finish the rest progressively over time.

Brands as Negative Keywords

When you’ve created nice brand focused campaigns and ad groups, your search query reports should show that the majority of queries the contain your brand keywords are matched to those ad groups. But there will be exceptions.

Every time a branded search query lands in one of your non-brand ad groups, take a look and see if you have a keywords that was targetted at that search query. If you don’t, add one.

Of course, if it’s a search query you don’t want, add it as a negative keyword to both the brand and non-brand campaign.

After query-mining for brand keywords in your non-brand account for a while (days to weeks, depending on your volume), when you’re confident that the keywords you’ve added to your brand focused campaigns are relatively complete and accurate, go ahead and add your brand keyword as a campaign negative to the non-branded campaigns.

This will assure that no branded queries are matched into those campaigns. They’ll be forced (more or less) to match into the brand focused campaigns you’ve created for that purpose. The users will see brand appropriate ads, they’ll be sent to brand appropriate landing pages, and your campaign and ad groups reports for both branded and non branded keywords will be more complete, consistent, actionable, and accurate.

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: “Craig’s dug deep into AdWords and unearthed some important nuggets. They’re surprising, simply but eloquently described, and vital to your PPC advertising success.” – David Szetela – Owner and CEO, Clix Marketing’.

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The Secret Truth Series #5 – Impression Share

Craig Danuloff — Mon, 01 Mar 2010 10:48:04 +0000

We’ve written about the AdWords impression share metrics often in the past on this blog.

So rather than re-hashing or re-writing, we’ll suggest you go read our Impression Share Series to extend and amplify the comments made in the fifth Secret Truth.

Finished?

There isn’t much more to add. The one point worth clarifying or reiterating, is that Impression Share is worth reorganizing for. We talked about several rationals for creating focused campaign organization in the Secret Truth #4 post, and hinted at the Impression Share relationship.

Because Impression Share is reported only at the campaign level, it is always an average. Looking at the number for campaigns that contain keywords and ad groups with highly disparate performance, clarity of target, match type distribution, and other characteristics makes it a worthless and probably misleading number. In order to trust Impression Share, your campaign organization must be focused and internally consistent.

Maybe one day Google will share with us Impression Share at the ad group or even the keyword level. Wouldn’t that be grand?

Until then, to get the most out of impression share it the first trick is to monitor it closely, and the second is to make sure your campaigns are well organized. Actually all of the ideas presented in Secret Truths 2-8 and 14 can help you get the most from this great metric.

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 on twitter: “Very, Very, Very nice e-book from @clickequations called ‘21 secrets to PPC’. Easy to read, and full of good and funny stuff! – @Eloi_Casali”

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The Secret Truth Series #4 – Campaign Reports

Craig Danuloff — Thu, 25 Feb 2010 13:52:02 +0000

Of the 21 Secret Truths in the book, #4 was in some ways the most difficult to write. It’s one of the most abstract ideas in the book, perhaps the least intuitive, and it really needed at least a couple of full-blown examples.

All of which made it tough just due to the space constraints available. The book was designed to be quick and easy to read, and every entry was allocated exactly one page. But on this one I really appreciate the chance to offer extended remarks and comments.

The idea is simple, if hard to compress into a single sentence: Campaigns don’t do anything to your account performance, they’re constructs that should make your reports more informative and actionable. As such, using them simply as the top level of a hierarchical logical organization of your keywords is a waste.

What Campaigns Do and Should Do

In our experience, campaigns are most typically used to define and create a categorical breakdown of an account. A clothing retailer would by default have a shoe campaign and a sox campaign and a hats campaign. Inside of those would be the associated ad groups.

The result of this is that when you look at campaign reports and performance – which you do all the time because both AdWords and 3rd party tools like ClickEquations naturally present the campaign level data to you quite prominently – you see the summary performance (impressions, clicks, revenue, costs) for the campaigns based on those groups.

Here’s the problem: Seeing the results rolled up based on those categorizations isn’t very useful.

Sure it seems nice to know that shoes has a 4% CTR and a 250% ROI while hats has a 5% CTR but only a 150% ROI. But is it really useful?

The problem is averages. What you see in these rolled up results, perfectly reasonably, are averages. On average in the shoes campaign the CTR was 4%. And as we’ll discuss in more detail in a later post, averages are the enemy of accuracy. They mask facts and trends by their very nature.

Average can be put to great use – they’re statistically useful. But they can be inappropriate too.

What’s hidden in typical categorical organization is the clarity you can get if you further break down campaigns based on other, additional, distinctions within your campaigns. Basically you want to think about the different types and classes of ad groups the campaigns contain, aspects that would cause dramatically different performance, and collect those types of ad groups into campaigns based on those similarities.

Breaking Campaigns Down

There are several types of ad groups that you might want to segregate. Ad groups that contain brand keywords are obvious. Brand keywords get vastly higher CTRs, better conversion rates, and often lower CPCs. If you have brand keywords mixed in your general campaigns, they’ll really distort the average numbers reported.

Often within different target product or offer segments in your businss you’ll have keywords that carry different business intents. You may have some keywords that bring in a lot of new customers, generate high traffic volumes, but aren’t very profitable. Call them loss leaders, or new client introducers, or just keywords aimed at revenue more than profit.

On the other hand, you likely (hopefully) have some keywords (well organized into tight ad groups!) that just kill it in terms of pure good old profit. They have your best conversion rates, highest average order values, and for them you manage very tighly to maximize these already good returns.

If stuffed within your shoes campaign are some ad groups that are high volume but marginally profitable, and others that are super profitable, doesn’t that doom the rolled up campaign results to be rather meaningless? What are they going to tell you?

By contrast, suppose you take very small number of mega-profitable ad groups out of the shoe campaign, and make a new campaign called ‘shoes-high-margin’. Now every day/week/month, you can look at those campaign stats and quickly get an accurate idea of if that profit gravy train is on track. If there is a dip, you’ll see it quickly. If there is a surge, you’ll know that too and can respond with more budget or perhaps even more keywords.

Lousy performers need the same treatment. We all have keywords (and perhaps ad groups) that just aren’t doing well. Maybe we should kill them but just don’t have the heart. Maybe we’re working really hard to test better ad copy and tweak negatives and match types. In any case, for now they’re losers.

Mixed into our everyday campaigns, the losers hide in the shadows. We don’t clearly see how much they’re really costing, or how far below the averages they are. Often they live on for months and years. Drag them into their own campign, get forced to stare every month at $29,000 spend and $1213 revenue, and your motivation and decisions just might change.

Plus, the reporting on your core campaigns, minus these misfits, is much more accurate too.

Looking For Wow!

Hopefully this clarifies the point. If campaigns are simply logical categories they’re data is of limited use. If they’re grouped logically and by performance or at least goal then the numbers they produce are meaningful.

Here’s the real goal: You want to be able to see a number in your campaign report and say either WOW or OH SHIT. There should be numbers in those reports that have expected ranges and reasons behind them, and if they change you should be able to know that it’s a big deal.

If they’re all huge roll-up averages that jump around, or that stay constant because even huge swings within them are masked by other shifts elsewhere, there will never be and Wow or Oh Shit moments based on campaign reports.

And beyond saving you that little drama, it means that important things are happening in your campaigns, and you’re missing them.

We don’t want that.

There are two related topics: How to best actually reoganize campaigns, and the impact of Impression Share on the campaign organization decision. I’ll tackle the first one in a follow up post in the next few days, and talk more about Impression Share and in terms of campaign organization when that topic comes up in the natural sequence.

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 on twitter: “Very, Very, Very nice e-book from @clickequations called ‘21 secrets to PPC’. Easy to read, and full of good and funny stuff! – @Eloi_Casali”

Download Your Copy Today
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The Secret Truth Series #5 – Impression Share We’ve written about the AdWords impression share metrics often in...
Secret Truth Series #13: The Average Lie Numbers look like facts even when they’re not. To make...
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The Secret Truth Series #3 – They’re Called Ad Groups

Craig Danuloff — Mon, 22 Feb 2010 14:34:39 +0000

This series of blog posts goes ‘behind the scenes’ to extend and expand on the content in our free ebook ’21 Secrets of High-Resolution PPC’. Request your copy here.

Paid seach campaigns are organized into campaigns and ad groups. Why they’re organized and how they should be organized is something that doesn’t get discussed enough.

The secret to ad groups is hidden in its name. Ad groups are a way to organize text ads. If they were a way to organize keywords, they’d be called keyword groups!

Properly building ad groups is incredibly important. Yet it seams that most people spend far too little time designing and constructing their ad groups. This happens primarily because the goals aren’t clear.

The Goal of Ad Groups

The goal of an ad group is:

To perfectly align questions (search queries) with answers (text ads).
Every query that comes into an ad group should smack straight into some ad copy that directly and perfectly addresses its topics, issues, intent, and desires.
It not good enough for all the keywords in an ad group to be similar or narrowly focused or contextually similar or anything else.
If the people whose queries come into a group don’t see text ads that satisfy them, the ad group is a failure.

Rebuilding Ad Groups

It’s also rare to find paid search managers spending a lot of time re-organizing ad groups. Which is a mistake because taking what is learned from real-life data and experience and shifting things around is often the most effective way to jump start a campaign that is stuck with performance below your expectations.

Ad group reorganization doesn’t happen a lot in large part because it isn’t easy enough to reorganize within our tools. But the ‘clarity of vision’ problem applies here too. Without a clear set of organizational goals how can you know that something is wrong or how you should fix it?

There is only one legitimate way to analyze the success of an ad group: Take the list of search queries the ad group has attracted, say over the last 30 days. Put this list next to the text ad copy that has been shown to the people who executed those searches.

If you can’t look at any of the text ads on that list, and be completely comfortable that it is clearly and directly aimed at answering the question implied in any and every search query on the other list, then you have work to do to improve your ad groups.

A lot of that work involves adding and deleting keywords, shifting or duplicating match types, working on bidding and quality score, and other similar tasks. But none of these efforts can be fully or correctly completed if you don’t first commit to building ad groups around the ads they contain and not around the keywords they contain.

The Ads Are The Targets

This is the distinction that matters. Build ad groups around ads. Fit in keywords that attract compatible queries.

Ads are the target. Build a nice small target. Then hit it. Hit it as squarely and cleanly as possible. Don’t allow anything in that isn’t a bullseye.

There may be many great keywords that just don’t fit. You may have to add negatives to that particular ad group that are perfectly valid keywords elsewhere. That’s fine. You can build as many ad groups as you need to have each one be tight and focused. But if you allow unaligned queries into your ad group, the downhill spiral begins:

Queries that don’t target the ad copy get impressions but not clicks.
So CTRs drop
And what may be perfectly good queries are under-served by inappropriate ads (ei they’re wasted)
Quality score suffers for the keywords, target URLs, and overall account
Money is wasted in the process, and cost rise in the future (due to lower quality score across the account)

If the search engines let you dynamically decide which ad to show based on the search query, you could build ad groups around keywords and then direct each person to a highly targeted text ad. But they don’t, so you have to work the other way around. Build highly targeted text ads then construct ad groups that only bring very specific people to them.

It’s easy to remember: they’re called ad groups.

What do you think?

This blog post is a companion to our free ebook ’21 Secret Truths of High-Resolution PPC’.

It will be available for download later this month.

Reserve Your Copy Today

The Secret Truth Series: #1 – They Want Answers The first truth from our new ’21 Secret Truths of...
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The Secret Truth Series #2 – Why Keywords Are Over-Rated

Craig Danuloff — Tue, 16 Feb 2010 11:31:47 +0000

This series of blog posts goes ‘behind the scenes’ to extend and expand on the content in our free ebook ’21 Secrets of High-Resolution PPC’. Request your copy here.

Keywords are over-rated.

One of the underlying themes of High-Resolution PPC is that the popular notion of how paid search works is wrong. Or more accurately, that it’s vastly over-simplified in a way that harms those who believe it.

Keywords are a great example. As promoted by the search engines and most of those who talk about them, keywords are the center of paid search. Keywords define your targets and attract your prospects. Keywords take your bids, costs are hung on them, and they collect the statistics used to judge performance.

All of this is reasonable. And a few years ago when prices were lower, competition was relatively tame, and the resulting profits were high, it was good enough.

Not anymore.

What keywords really do is act like magnets. They attract people who execute searches based on certain search queries. The strength of their magnetism is based on the match types that are applied to them. Exact match keywords only attract search queries that are identical to the keywords, but the more prevalent phrase and broad match keywords attract – or might attract – a huge range of queries.

In the simple and traditional discussion of paid search, search queries do not exist. Keywords are their proxies. Keywords are as specific as the conversation gets.

In that version of the world, the focus is on keyword performance (such as click-through rates) and results (in things like return on ad spend). By looking at these numbers, people make important judgments and decisions. Ultimately keywords are deemed ‘good’ or ‘bad’.

But while all this is happening, something much more important is going on, and being ignored. Before every click, the keyword is matched to a search query. Keywords that aren’t using exact match are seeing traffic from dozens or hundreds of different search queries.

For each keyword, some of these search queries deliver excellent performance and results while others are complete wastes of time and money.

By looking at these queries, and how they perform, our judgments and decisions can be far more accurate and effective. We can cut waste, double-down on winners, and even more importantly setup our campaigns and ad groups to much more effectively answer the questions that the searchers we’re paying for are actually asking.

That’s why search queries are far more important than keywords.

It’s easy to demonstrate why you have to look past keywords and focus on search queries.

Suppose you have a keyword that’s performing terribly. It has very few clicks, a low quality score, and a terrible ROAS. Your inclination might be to pause or delete it right? But what if you looked at the search queries and found that out of 87 different queries you’ve paid for thus far, every single conversion came from just one variant – and that query seemed to convert every time it was clicked. You’d want to save that query wouldn’t you? Killing the keyword would have thrown that baby out with the bathwater.
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Or suppose you have a keyword that is killing it. It has a huge CTR and is making tons of genuine profit. All’s well right? Until you look at the queries and find that there are ten or so relatively frequent queries, all of which share a common root phrase, that almost never convert. Adding that phrase as a negative would cut costs and boost profits even higher. Ignoring queries in that case is like a great team that allows one weak player to ride along and lower the stats. Why do that?
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And lastly, much of what you’ll learn by putting search queries first isn’t that one keyword is good or bad, but that the questions being asked are not being well answered – the alignment of queries and ads (questions and answers) is off due to organizational problems in your campaigns. And when you fix these we’re not talking about boosting the performance of one or two keywords but rather the chance to radically shift (meaning improve) the performance of your entire account. But if you don’t look at the queries there is no way to know that they contain questions that aren’t being answered.

The only downside of moving from keyword management to search query management is that it takes time and effort. This is true. But it’s an iterative process, it can be managed on a clearly prioritized basis (ie you don’t have to do all of it at once), and the fact is that if you don’t do it you’re just wasting tons of money and foregoing a lot of sales and profit. There is no way around this.

If our job is to answer questions, then search queries have to become the center of our attention.

What do you think?

This blog post is a companion to our free ebook ’21 Secret Truths of High-Resolution PPC’.

It will be available for download later this month.

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The Secret Truth Series #6 – Success Through Negative Brand Keywords A few years ago when asked for the #1 tip...
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The Secret Truth Series: #1 – They Want Answers

Craig Danuloff — Wed, 10 Feb 2010 18:54:36 +0000

The first truth from our new ’21 Secret Truths of High-Resolution PPC’ was leaked, on this very blog, in our New Years Day post.

That post, entitled ‘They’re Searching For Answers’ introduced the idea that every search is a question, and text-ads are an attempt to answer those questions.

(We’ll wait while you go read it.)

This is not just our first ‘Secret Truth’ but a kind of a guiding principle behind the entire collection.

It’s important because it turns the focus around and clarifies the fact that users (prospects, customers, searchers, whatever you want to call them) are driving this process. It’s demand driven marketing. They’re in control. We’re here to satisfy them, and only get to stay in the game as long as they think we are or at least might satisfy them. Our role is to anticipate and fulfill their needs. We can’t manipulate them.

In addition to getting us out of a dominant mindset and into a subservient one, this idea is also critical because so much of how we organize, target, option, value, and otherwise manage our campaigns – as we’ll explain in the 20 Truths to follow – can be guided and judged by how well it helps us to better align our answers to their questions.

Nearly every choice you make in the configuration of your paid search campaigns either clarifies or distorts alignment.

If you put a lot of keywords into an ad group, they attract a wide range of search queries and the alignment between any one query and the provided ad copy can suffer.
Organize ad groups into campaigns in the wrong way, and the campaign-level numbers you see won’t tell you if things are aligned or not.
Use a lot of broad match, alignment will range from perfect to extremely remote.
Bid too low, and your competitors will out rank you (and sometimes show when you don’t) for the most aligned queries.
Fail to geo-target adequately and you’ll align with the right queries but from the wrong people – same bad result.

So it helps to have this simple prime directive : target the questions you want to answer, and then answer them directly.

When this rule isn’t followed, a lot of innocent keywords, text-ads, and landing pages pay the price.

Consider one example:

If the keyword is ‘snow plow’ running on broad match
The search queries include many things like ‘who can plow the snow off my driveway in Allentown PA’
The text ad copy says ‘J-Deere 150″ Plow Extensions for Your F-150″.

In this case the keyword is likely to have a terrible CTR and conversion rate. It might be judged a ‘bad keyword’ and paused or deleted.

But in-fact the problem is that we’re delivering answers that have nothing to do with the questions being targeted. What’s needed is more keyword negatives and probably a lot of keyword expansion (to grab all the words and phrases that broad match is eligible to capture in ways that we can organize and answer them far more accurately).

Poor results here are predictable. And the reason for them can clearly can be seen in the results. But many times we look at the metrics for our keywords, text-ads, and landing pages (not to mention campaigns and ad groups) and draw conclusions without taking the time to see if we were answering the question they were asking.

Paid search advertising is the process of paying to answer questions. It only sense to work very hard to answer them well.

Understanding that this is what we’re doing is the first step.

What do you think?
This blog post is a companion to our free ebook ’21 Secret Truths of High-Resolution PPC’.

It will be available for download later this month.

Reserve Your Copy Today

The Secret Truth Series #2 – Why Keywords Are Over-Rated This series of blog posts goes ‘behind the scenes’ to...
The Secret Truth Series #3 – They’re Called Ad Groups This series of blog posts goes ‘behind the scenes’ to...
The Secret Truth Series #5 – Impression Share We’ve written about the AdWords impression share metrics often in...

The Origin of High-Resolution PPC

Craig Danuloff — Mon, 08 Feb 2010 20:58:08 +0000

21 Secret Truths of High-Resolution PPC is our soon-to-be released ebook that shares what we think are the guiding principles for efficient and effective paid search management.

The idea for ‘High-Resolution PPC’ was hatched two or three years ago, as we looked deeper and deeper into how paid search really worked, and how large and complex paid search campaigns should be managed.

At the time we were managing accounts for a range of very large advertisers. Like anyone else we were striving to produce better results. But we were constantly frustrated by the limits of the data we could access, the inflexibility of the tools at our disposal, and the general level of transparency we felt the engines were providing into how the choices we made impacted the behavior and performance of our campaigns.

To address the first two issues, we accepted a venture capital investment, built an in-house product development team, and created ClickEquations. To address the last item, we began development of what was originally called ‘the methodology’.

The methodology was an effort to document the facts about how search worked and the process that one should follow to build and manage accounts. It started as a collection of ideas, beliefs, and habits we assumed were best practices. Over time we pulled back to look at the shape and sequence of the overall process, and dove in to examine individual elements, options, and interactions.

Eventually a framework emerged. Groups of items and options that fit together. Stages of the process that had natural breaks and measurable outcomes. The framework provided a structure around which all the steps, options, measurements, goals, interactions, and components of paid search management could be organized.

It got the name ‘High-Resolution PPC’ because one recurring theme of the exercise was the fact that everything we knew before was right, but far too over-simplified.

Keywords mattered, but only in the way they attracted search queries, which had a lot to do with how and when match types were assigned.
Bids mattered, but only due to their influence on ad rank which itself influenced CPC.
CTR mattered, but it (and nearly everything else) was reported as an average and if you accepted the number without really thinking hard about how it was calculated you were likely to be misled. The examples continued endlessly.
The list went on and one. Most of what we knew or thought was in fact true, but there was always a but. And if you know about the ‘but’ you would take different action than if you didn’t.

It seemed like the conventional wisdom was paid search at 300-dpi, but with a little effort and thought we could understand and act at 2400-dpi.

More accurate info. More precise actions. Better results. Higher resolution.

For the last 18-months or so we’ve continued to refine the High-Resolution PPC framework, and research and document the information on which it’s based. We’ve talked a bit about the process of managing paid search in this way (the original outline is presented here), and some of the posts on this blog over the past year have discussed elements of paid search in the terms we see and use them within High-Res.

But our new ebook is the first complete summary of what we’ve learned, at least in terms of the facts and philosophies we’ve come to consider the structural base of High-Resolution PPC.

To keep the book snappy, and a reasonable length, it’s written in a concise style – with just 1 page per item. Over the next month, this blog will feature a behind-the-scenes tour of the 21 truths, with expositions, examples, and with your help some conversations.

Sign up below to get your copy. And if you’ll be at SMX, SES, or OMMA in March, please visit the ClickEquations booth for a full color printed copy.

Get a free copy of ’21 Secret Truths of High-Resolution PPC’.

The ebook will be available for download later this month.

Request Your Copy Today

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Shakedown on Quality Score Street

Craig Danuloff — Sun, 07 Feb 2010 17:12:27 +0000

In advance of our new ebook, and some other projects just behind it, I built a new website focused on High-Resolution PPC.

To support that site, I created a new AdWords account and added two small ad groups with a total of 9 keywords and two text ads. Every keyword is a brand or navigational variation of the term ‘high-resolution ppc’.

That phrase is in the domain name and all over the home page, which serves as landing page for both ads.

This is a story of how quality score evolves.

At First, They Don’t Trust You

This is a brand new account. It has no CTR history. The ads are new. There is no visible URL history. The website has existed, and been indexed in Google, for a few months but with just a few pages and virtually no traffic.

The keyword ‘high resolution ppc’ does have a CTR history, because in our Clickequations.com AdWords account we buy the broad match version and aim ads at a page for ebook sign-ups.

I added six exact match keywords (shown right) to the first ad group. The initial bid was set to $0.10.

A few minutes after creation, they were all listed with a quality score of 3/10 and a First page bid estimate of $1.00.

Interestingly, Relevance was initially listed as ‘No Problem’ but 14 hours later is listed as ‘Poor’ for every keyword.

Because the corporate account had bid on the keyword, I looked in ClickEquations to see how it was doing. ‘High resolution ppc’ (broad match) has a quality score of 7 and a Max CPC of $0.10. Relevance says ‘no problems’. The ad copy and landing page for that keyword also use the phrase in just about every place possible.

Given the lack of history, and knowing that history matters, I accept for the moment the fact that it’s necessary to bid $1.00 per click for a phrase I made up (ie the competition is light, on both content and competitive bidders). So I raise the bid on the one exact match keyword ‘high resolution ppc’ to $1.00.

The ad did not start showing in the SERPS. So I went to sleep.

Money Talks
This morning I checked again. The ad from the new account is now in position #1, at the top. It still has a quality score of 3, and a ‘Poor’ rating for Relevence.

Someone explain how these keywords could be more relevant for the search queries, text-ad copy, and target URL – all of which contain the exact 3-word phrase.

It had zero impressions or clicks overnight. To boost my CTR, I clicked it the time I ran my search to check it. Cost me a buck, but my CTR is now 100%!

There were only 3 ads shown the first time I searched. The book ad, the one from ClickEquations, and one from AdWords themselves trying to lure innocents into PPC for the first time.

Interestingly, and perhaps coincidentally, after my $1.00 self-help click, the phrase now returns 14 AdWords ads – due to broad matching on the ‘ppc’ part of the search query no doubt. I guess once Google sees that people who search this phrase will click paid ads, the ads come a-runnin’.

What Happens Next
There’s nothing too revealing in all this. The time frames and data sets are tiny, the behaviour is more or less consistent with what we’ve been told about quality score. Yet I find the rare opportunity to view a case study with so few complications appealing.

It won’t be pure, of course. Some of you will go run the query, depressing the CTR. A few will even click the ad, wasting a little money

But over the next few weeks we’ll see what happens.

How long will it take to get the quality score up from 3 to at least 7?
When will Google recognize that the relevance is perfect, not poor?
Will the CTR on the new version of the ads beat the old ones that earned the quality score of 7?
How long until I can get the bid down from $1.00 (which clicks are not worth) to $0.10 (which they may be)?
Once the account grows, what will be the best way to monitor and control lifetime account CTR history, and visible URL CTR history?
How much is this experiment going to cost? (Note: It’s not entirely an experiment, the ad and site are real and will live on – the learning is a bonus.)

Stay tuned….

UPDATES:

Day 2 – Quality Score 4, CTR 40%, Impression 10, Clicks 4
Day 4 – Quality Score 5, CTR 45%, Impressions 11, Clicks 5
Day 4 – Lowered bid from $1.oo (former ‘first page bid estimate) to $.80)
Day 4 – Added new ad group with 1 keyword – Craig Danuloff (broad match) initial QS=5
Day 4 – Noticed that navigational keywords (www.highresolutionppc.com) have QS=7
Day 6 – Quality Score 7, CTR 41%, Impressions 12 (So it wasn’t a volume issue). Ave CPC to date = $0.87 Ave Pos 1.1
Day 7 – Lowered bid from $0.80 to $0.25
Day 7 – First Page Bid Estimates on other KW in ad group, dropped from $1.00 to $0.20 where QS rose to 6 from 3-4
Day 7 – First Page Bid Estimates on other KW in ad group, dropped from $1.00 to $0.30 where QS rose to 5 from 3-4

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