A nice surprise from Google today, with the release of independent statistics for ad-group performance on the Google ‘Search Network’ - sites like AOL and Ask.com.

This is no doubt related to the Google-Yahoo deal and clammoring on this blog and elsewhere about the issues involved in integrating those reports. It’s great that reporting is now separate - next we need separate bidding options like they provide for the Content Network.

Interestingly, in one of our campaigns the search network bid is set to ‘auto’. I don’t know what that means. Are they going to auto-lower bids on search partners? Better than keeping them the same as bids on the Google network, but I’d still prefer advertiser control.

The power Google has by virtue of their position is amazing. Consider two recent announcements from the ‘plex:

• Google Suggest is now a default feature of Google.com. The impact here could be that people stop typing long detailed search phrases and instead just take one of the suggestions. The worry is that this ‘cuts off’ the long tail and will increase competition for those suggestion phrases. Read this for an in-depth analysis.

• Google Chrome munges the address and search boxes together so that you’re in effect encouraged to search and not type-in the URL. This drives more and more traffic through search, which places a premium on both your organic and paid results. It also hastens the trend to not bother remembering or bookmarking URLS because ‘it’s easier just to search’.

While both features are genuinely user-friendly in terms of Google enhancing the experience of people browsing the web, they both also happen to drive more money from advertiser pockets into the Google coffers.

Google Suggest will (I predict) lengthen what we call the ’search chain’ - the number of different searches you do before you find what you’re looking for. Folks who had been searching on increasingly long phrases will be suckered into trying the shorter suggests, only to later go back and do the long search anyway at least for that large percentage of the time that the more generic searches yield interesting but unsatisfactory results.

Google Chrome’s search/address box will just increase search volume. Once they bundle Suggest in Chrome, then both search volume will increase and the number of queries per chain will increase. Another 1-2 punch for quarterly profits.

What Can PPC Advertisers Do?

Nothing to stop the features or trends. But what both demand is a strong need to know exactly what search queries users are typing, and how these queries are being matched to the keywords you’re bidding on.

If there is a new concentration of traffic from Google Suggest, only search query analysis will reveal it, as your various keywords and match type combinations will not make these trends visible to you.

If Chrome drives more search volume, that’s good. But if you want to know how it drove that traffic, again you need to be able to analyze search queries.

Keep An Eye On Search Queries

Search queries are the unfiltered driver of your traffic and your search spend. A keyword-centric view of PPC obscures this truth behind an matrix of keywords, match types, bids and quality scores that all combine and conspire in rather complicated ways to determine which keywords get the clicks and how much those clicks cost.

If you know which queries are driving your costs and revenue, you can better organize, select, and bid on keywords. Knowing them however, isn’t easy, as Adwords reports only a percentage of them and not at a keyword level. Yahoo and MSN, however, report no queries at all.

In ClickEquations we report all queries, and show exactly which keyword attracted each one, and which conversions resulted. It’s just one of many things we did differently because our years managing paid search accounts gave us a unique perspective on what a paid search tool should do.

ClickEquations isn’t available, hasn’t even really been announced, but we’re now accepting invitations for free ‘charter’ accounts. Wanna give it a try?

Andrew Goodman is clearly one of the most informed and deepest thinkers on the insides of Adwords. His comments on the recent changes are worth reading and thinking about.

I particularly like the way he defines assumptions as to why they’re making these changes:

1. New advertisers (and unevenly-engaged advertisers returning to refresh their memories) do keep pouring into the space, especially internationally. The optics of high minimum bids don’t look good. They’re alarming and off-putting to newbies.

2. Google likes its black box, and likes to avoid black-white distinctions. Building very flexible (read: confounding) architecture helps Google achieve a number of goals. And even those goals are subject to change.

3. Yet Google faces pressure for additional disclosure. So for every layer of complexity they build in, they try to offer up at least an equivalent step forward in terms of disclosure.

4. At Google AdWords, CTR is king. Clicks drive revenue, and continue to be a reasonable proxy for relevance. This is the biggest constant since 2002.

5. The platform as it stood at version 2.6 (my nomenclature), contained pockets of inefficiency. It did a good job of ramping up the “quality” bar, to the delight of users, but as even Sergey sheepishly admitted to investors, they might have “overtightened” the calibration of the platform, showing too few ads for advertisers’, Google’s, and investors’ taste. The new release is intended to offer Google the ability to “untighten” selectively, without giving anyone the satisfaction of being able to point definitively as to exactly how that is being achieved.

Go read his initial conclusions.

What one piece of advice would I give to help improve a paid search campaign?

That was a question asked of our panel as SES in San Jose last week.

My answer: Make sure your brand keywords are fully segregated from all others.

Brand keywords - any keyword with your company name or variations in them - have completely different cost and performance characteristics than category or other other generic or product specific keywords.

These differences completely confuse the reporting for any campaigns and Ad-Groups if they’re co-mingled.

Separating Keywords and Queries
The first step is easy - every keyword you buy, regardless of its Match Type, should be in an Ad-Group if not a Campaign with only other keywords that contain the Brand name too.

Preferably, the brand terms are bucketed, with the ‘Pure’ Brand keywords in one group (those that represent just the name and variations itself), the navigational versions in another (www.brand.com, brand homepage, etc.) and the Brand-Plus keywords (Brand Sweatpants, Brand Coupons, etc.) in yet another, and so on.

In these brand focused Ad-Groups, you have to use Broad and Advanced match very sparingly and carefully, and eventually almost entirely eliminate them. If you leave them, you’ll get too many non-brand queries matching and diluting the intent of these highly focused Ad-Groups.

The other side of this Broad/Advanced Match coin is that you’ll also want to add your brand as a negative in all the remaining non-branded Campaigns and Ad-Groups. Otherwise the engines will match brand-inclusive queries against your non-brand targeted keywords.

This can be and feel dangerous, if you’re not completely sure that your Brand campaigns are complete, bid properly, running the full range of Match-Types (with of course the Match Type Keyword Traps fully configured and loaded.)

It’s probably a good idea to skip this step of adding the brand as negatives in the non-branded campaigns for a few days to ensure that there aren’t certain query formulations that your new Brand targeted Campaigns are missing.

Watch the query reports carefully, and add variations to the brand campaigns, and ultimately more negatives to both the brand the non-brand campaigns.

The Payoff
Immediately upon starting this process, especially if your campaigns had brand terms and lots of broad match scattered throughout, you’ll see radical shifts in your search reports.

• You may be amazed how much revenue is coming from and and how little cost is going into your pure brand campaigns. That’s the good news.
• You may be shocked at how much money and how little revenue is coming from your now-strictly-non-brand ad-groups. That’s the bad news. Or the opportunity, depending on how you look at it.

In any case, you’ll have a new level of clarity about the performance and activity in your PPC campaigns.

Coming Up
I’ll share more thoughts on the execution of full brand segregation, and the implications of the changes it makes to your reported results, in future posts. This is another one that may take 3-4 posts to just scratch the surface of.

In the meantime, questions and comments are encouraged. Are your brand terms separated into ad-groups? Does that help you better understand the way your PPC budgets are spent? What problems have you seen trying to control brand via Match Types? Any other ideas?

Most of the comments and analysis on the Google Quality Score updates, including my own, had mentioned the fact that the changes as described seemed to deal a death-blow to the old ‘good-ok-great’ Quality Score ranking system, but didn’t mention any replacement.

Brad Geddes apparently has the scoop that there will be ‘more transparency’ in the new system:

More visibility coming to Quality Score. The ‘OK, Great, and Poor’ will be replaced with a much more transparent system. At present, the easiest way to see many changes is to run a keyword report and sort by minimum bid high to low. With the new system, you will eventually be able to run a report and sort by Quality Score so that you can get a much better view of your keywords quality score.

Excellent. Hope they’re available in the API!

I always wonder if Frank Luntz invented the name Quality Score for Google.

It just sounds like the man behind ‘climate change’ (which was otherwise known as ‘global warming’) would call something a ‘quality score’ when it actually functions as ‘advertising tax’.

The Quality Score is Google’s way of handicapping your keywords/text-ads, in the sense of both ranking and limiting their appropriateness and therefore likelihood to run.

The idea, as Google portrays it, is that keyword/ad/landing-page combinations which are more appropriate for a given search get a higher score, and those less appropriate get a lower one. A higher score helps ads run more frequently and be positioned higher, while a lower quality score drives them to be run less frequently and positioned lower.

This of course all aligns with the idea of putting user experience of searchers first, as better ads (more relevant and ‘voted’ so by clicks) get higher quality scores.

And oh ya, the lower your quality score the more you have to pay for the chance or priviledge of running your ads at all.

This is where the prime directive gets sold out - ads with lower quality scores (to a point) can run and even rank highly if the advertiser is willing to pay enough.

In some cases quality scores were so low that a ‘Minimum Bid’ was put into place, which is the moral equivalent of saying that we have no available seating for dinner this evening, unless you can find it in your heart to slip the maitre de a Benjamin.

Beyond a certain point, however, keywords have been shut down entirely (and marked ‘inactive’ until the words, ads, landing pages, or bids were modified and re-evaluated.)

Quality score is calculated using yet-another-secret-google-algorithm, but we know it reflects the symmetry of language between the query, keyword, ad, and landing page, click-through-rate performance, load time of the landing page, and other elements.

Quality Score Revised

The way Quality Score is calculated and applied is being changed, which as just announced in a blog post entitled ‘Quality Score improvements’. Luntz would be proud.

Here’s what they say about the changes:

A more accurate Quality Score

Most importantly, we are replacing our static per-keyword Quality Scores with a system that will evaluate an ad’s quality each time it matches a search query. This way, AdWords will use the most accurate, specific, and up-to-date performance information when determining whether an ad should be displayed. Your ads will be more likely to show when they’re relevant and less likely to show when they’re not. This means that Google users are apt to see better ads while you, as an advertiser, should receive leads which are more highly qualified.

Keywords no longer marked ‘inactive for search’

The new per-query evaluation of Quality Score affects you in that keywords will no longer appear as ‘inactive for search’ in your account. Instead, all keywords will have the chance to show ads on Google web search and the search network (unless you’ve paused or deleted them). Keep in mind, however, that keywords previously marked ‘inactive for search’ are not likely to accrue a great deal of traffic following this change. This is because their combined per-query Quality Score and bid probably isn’t high enough to gain competitive placement.

‘First page bid’ will replace ‘minimum bid’

As a result of migrating to per-query Quality Score, we are no longer showing minimum bids in your account. Instead, we’re replacing minimum bids with a new, more meaningful metric: first page bids. First page bids are an estimate of the bid it would take for your ad to reach the first page of search results on Google web search. They’re based on the exact match version of the keyword, the ad’s Quality Score, and current advertiser competition on that keyword. Based on your feedback, we learned that knowing your minimum bid wasn’t always helpful in getting the ad placement you wanted, so we hope that first page bids will give you better guidance on how to achieve your advertising goals.

It’s worth mentioning that the impact of these changes will vary from advertiser to advertiser; some might see no changes to their ad serving, while others may see a noticeable difference. As always, we recommend optimizing ads to prevent them from receiving a low Quality Score.

First Impressions
The core idea of calculating Quality Score on the unique characteristics of each search instead of coming up with a single score per keyword is clearly a step in the right direction.

The dynamic nature of the new Quality Score, however, may make it a lot more challenging to know and manage the implications of your Quality Scores. They don’t say if they’ll still report Quality Score in the Adwords interface, of more importantly if they’ll make any QS rating available via the Adwords API.

By scoring independently in each situation, many keywords may suffer what will in effect be a lower impression share - getting shown far less often than their potential - but it’s not clear that this loss will be reported or visible.

We may see volume drops for certain keywords and not have any clear indication that the reason is a low Quality Score in certain situations. And it’s not clear that there will be any feedback as to which situations - certain queries, certain network sites, certain times of day or whatever - are delivering low QS which therefore will make it quite difficult to take corrective action.

Similarly, while not having keywords marked ‘Inactive for Search’ sounds positive, it may be worse to have words running at extremely low impression counts if there is not a clear indication that this is happening or that it’s due to frequently low Quality Scores in the situations where the keyword is being scored and considered.

The ‘First Page Bid’ metric at least makes the process of bribing the matre de more transparent. There’s nothing worse than either slipping someone a $20 only to have them scoff at you because a $100 was necessary, except of course passing off a $100 when $20 would have done.

Having the price of admission clearly marked will enable advertisers to make their own decisions as to value.

One issue it would be great to have Google clarify is the way Quality Score is calculated, and therefore ‘First Page Bid’ too, over the life and history of a keyword. In the past the ‘Minimum Bid’ was frequently insanely and unjustly high for new keywords added to a campaign, and would decrease rapidly as a click-history was established.

This required paying up to $10 per click for terms without any competitive bids and which would later settle at bid prices as low as $0.10. Hopefully these types of ‘hazing’ fees for new keywords won’t be included in the new system - but of course only time will tell.

The Roll-Out
The new Quality Score changes are being rolled out slowly, so you may not see these in your account immediately. There will be another post at the Adwords blog before final system-wide launch.

Do you have Quality Score concerns? Post a comment!

Update: More info on new Quality Score reporting.

Thus far in this series we’ve talked about the difficulty of getting a clear view of paid search performance, of deciding the most urgent risks and opportunities amidst the volumes of data that you do have.

Now we come to the third issue: the productivity (or lack thereof) in making changes or improvements to your paid search account.

Possible Changes To Improve Search Campaigns

There are a limited number of things you might want/need to do to your paid search campaigns. Most of them aren’t too difficult when required on a small scale. But there’s not much in PPC campaigns that really happens on a small scale, which is where the frustration begins.

You might want to add keywords. It’s not hard to generate a large list of incremental keywords, and there are tools to help you do it. You can even harvest search queries, scape competitor websites, or get lists from Compete or Hitwise of terms driving traffic for others.

But to effectively apply a list of keywords they need to be expanded and parsed into versions and phrases and synonyms and layered across match types and segregated into ad-groups and campaigns and matched with bids and text-ads. The ideal environment for this would both facilitate the process as a whole and provide suggestions based on a learning algorithm which watched your style of division and targeting.

You could see the need to modify match types based on your search queries to build more effective match type keyword traps. This requires versioning keywords, segregating them into Ad-groups, pyramiding bids, and making sure the net is wide and lacks gaps or overlaps. Software could visualize this process and make it ‘drag and drop’ and even ‘bionic’ if someone put a little effort in.

Your bids may need to be changed, and of course this is the one task to which some substantial software automation development effort has been placed. This is a big topic I’ll save for a future series of in-depth posts.

You might need to substantially reorganize your campaigns. This happens for all kinds of reasons, many having to do with the impact of organization on the roll-up summary numbers as presented, some having to do with quality score management, the issue of match-type control and reporting, issues of geo-segmentation, and of course good old logical segmentation.

The technology provided for campaign reorganization today - cut and paste - is getting a little dated and I feel confident that a more elegant and productive solution could be conceived and developed.

The text-ads you’re running may need to be altered. While the idea of presenting four blank boxes and allowing unlimited freedom (with the constraints of available character limits) is powerful, perhaps there would be some advantage in tracking and analyzing the different ‘recipes’ used in various ads, building up repositories of different synonyms for important concepts and then making it easy to re-use effective ones and tracking how they perform both individually and as groups based on their relative position in the ad, in the ad as it runs at different positions or on different days, etc.

Lastly there is a chance that you’ll need to test different landing pages (leaving alone for now the implications of testing various designs within a single landing page). From the typical home page vs category page vs item page variances, it may be wise to consider user personas based on the keywords and queries and other factors as well.

Here again the current ‘type-anything-you-want’ technology could be enhanced by allowing simple meta data to be entered and tracked (how are item pages doing in terms of conversion vs category pages vs the home page) and enabling automated testing of these variations. And it doesn’t have to be limited to just a simple ‘which page’ consideration - performance may vary by the length of the query or number of works in the keyword phrase?, time of day, day of week, visit number, or many other factors. Software could track and optimize this.

Working In A Coal Mine

The common element in the current state of paid search management is that only one of the steps in even the most simplified version of the process has progressed even one iota in the last five or more years in terms of automation.

Tens of thousands of people are being treated as migrant-search-workers standing in the hot sun every day harvesting keywords and clicks.

And for the moment we’re not talking about the chisels and stones they’re given to bang out reports and dashboards.

Where is the Eli Whitney of PPC?

(Upcoming Events: I’ll be at the Semphonic XChange Conference in San Francisco on Aug 17-19, and am Speaking on “Identify, Analyze, Act: SEM by the Numbers” at Search Engine Strategies in San Jose on August 19th)

In my ‘Three Challenges’ Post I wrote the following to describe one of the fundamental reasons why I think the process of managing paid search needs to be improved:

There is a lack of clarity. It is amazingly difficult to get accurate and complete data on campaign performance and results. Much of the data you need to see is scattered across three to five different tools and interfaces. Other data is presented in formats or based on calculations that just aren’t right. (they’re wrong.) Still other information is seemingly unavailable. There is no quick and accurate way to get reports which are satisfying.

Since then I’ve written four posts in an attempt to explain and expand. But I’m not sure I captured it.

To manage something effectively it’s necessary to see cause and effect. The paid search networks use such complicated rules and hide certain key data elements which make this impossible.

Search queries, which are the primary driver of search success, are a key example. But it’s really the full relationship between queries and keywords and match types and quality score and text-ads and landing pages. The truth lies in that matrix somewhere, but nobody is letting you see it.

You see a pile of queries over here (partially, sometimes). A bunch of keywords over there. Some ads further off in the distance. Want to understand the relationships? Put them together in your own head.

Clues are great in a mystery. Not in a business transaction.

One thought I wasn’t able to put in the last post about missing and misleading click data, was about keyword click-through-rates.

Do keywords really have click-through-rates?

Objectively they do because the engines report them. But does that make sense?

If A Keyword Falls In The Forest, And The User Doesn’t See It…

The user doesn’t even know the keyword exists. The user typed a query (which in some small percentage of searches was exactly matched to the keyword, but far more often was only related to the keyword) and was shown (if they even saw it) a text-ad (containing some specific copy) in some position on the page in relation to a number of other text-ads (not to mention the organic search results.)

What portion of the influence in that click, or lack thereof, did the keyword have?

• We know different text-ad copy produces different CTRs.
• We know different positions result in different CTRs.
• We know that the presence or absence of specific competitive adds produce different CTRs.
• We know different queries that may match to the same keyword in broad or phrase match type have different CTRs.
• We can assume that CTRs vary by time and the geography of the user.
• There must be a couple of other factors I’m not thinking of right now… (comments?)

So does the keyword really have a CTR, or do the combinations really have CTRs? Clearly the Keyword CTR is the average of a range of different situations and conditions.

The Average Average is Only So-So

There are a lot of averages presented in search analytics. That’s necessary as we can’t handle all the granules, but close attention must be paid to the composition of these averages, lest they be less than clear or useful.

If the campaign is reasonably constructed in terms of organization and match type application, and are being reasonably run (meaning the text-ads and bids have both logic and dilligence being regularly applied to them), then the average CTR as reported for keywords can be useful. If any of these elements are missing, the utility dwindles rapidly.

As with most averages in PPC reports, if you aren’t sure dive down and look at the components - the more performance diversity you find inside the less weight you should place on the average.

Know Your Metrics

Just another example of the fact that even the simple metrics of paid search have more to or behind them than you might realize, and how some understanding and healthy skepticism can help you get closer to truly understanding what’s happening in your campaigns.

(Credit where it’s due: The idea of questioning KW CTRs, and many other ideas you’ll find in this blog from time to time, was first suggested by Bruce Ernst)

(Upcoming Events: I’ll be at the Semphonic XChange Conference in San Francisco on Aug 17-19, and am Speaking on “Identify, Analyze, Act: SEM by the Numbers” at Search Engine Strategies in San Jose on August 19th)