ClickEquations Blog

A Weblog on Paid Search Marketing, Search Analytics, and Online Marketing

From the category archives 'Search Engines'

AdWords Search Funnels: The Secret Cost

Last week’s announcement of AdWords Search Funnels is an imporant milestone, legitimizing and expanding the visibility, role, and in many cases capabilities of PPC revenue attribution.

Reviewing the basic features and watching the introductory video, it’s clear that the Google folks really thought about this and put a lot of time into the development of these features. They’ve brought and advanced topics to the masses of AdWords advertisers, and included new capabilities that do more – in some ways – than any other attribution system I’ve seen.

But in reviewing the basic announcement information, an issue came to mind worth thinking about before and separate from a detailed feature review.

Search Funnels Require AdWords Conversion Tracking

You can’t use Search Funnels unless your site is tagged for AdWords Conversion Tracking. This is also true of the Content Network View-Through Conversions, AdWords Conversion Optimizer, and other features.

Obviously, this is a reasonable technical requirement – they need to know about the conversion to make calculations related to the conversion.

But let’s say in public what everyone talks about in private – do you really want Google to see your conversion information? Does it hurt us collectively as advertisers every time someone shares their conversion information with Google?

Certainly they are using this data for good purposes in terms of these features.

But are they also using this data against you and all of us?

The Fear

I often refer to AdWords as a game. It’s a game we play on Google’s board and against both other competitors and against Google.

And Google makes up the rules. They share whatever portion of the rules that they choose, and hide many others. They also get to see, in large part, your hand. They have tons of data that you don’t have. Don’t ever get the idea that anything about what is happening is fair. It’s unfair.

But you agreed to the rules and realities when you ‘decided’ to play.

So given that Google is making up the rules, taking your money, seeing your bids and clicks, setting your Quality Score, deciding when your ads are shown and when your competitors ads are shown, seeing when you make budget shifts, watching your CTRs raise or drop, and everthing else, do you really want them – your dealer and competitor – to know how many items you sell, and the amount of money you sell them for?

Here’s one fear: If they know you make a lot of money off of certain keywords, isn’t it possible that they decide you’re not paying enough for the clicks on those keywords? Might the minimum bid or quality score required to be on top instead of right suddenly or slowly rise?

We don’t know anything about how they decide how many ads to show on a specific keyword (some get none, some get 3, some get 8). We don’t know all the factors of quality score which drive our costs. We don’t know how they set the minimum prices for either eligibility for the auction, or positioning on top.

Do you really believe that directly or indirectly, all the ways they’ll study and process the info they learn from tracking conversions and revenue won’t impact the formulas that decide these things in the future?

Google: want to categorically state that it’ll never have any impact?

Here’s another fear: If they see that you really are making a ton of sales and revenue from certain keywords, might there not someday be a Google branded business that becomes a direct competitor to you?

The absolute fact is that as Google ads features and enters markets, there is less reason for searchers to leave Google and the creep of that progression makes it easy to envision Google Travel or Google Autos or Google Real Estate or Google Movie Tickets or Google Cell-Phones (oops, too late), or Google (paid) videos or Google e-books, or Google anything else. And if you’re Google, why not go into businesses you know are profitable? And for which you even know which keywords lead to profit.

About 80% of that seems highly unlikely. But you can’t look at the natural progression and expansion of the company and believe that all of it is. I’m clearly stating that most of that is a very paranoid view and one I don’t hold, but I can’t say exactly which sliver isn’t.

Anyone want to assure or guarentee what business segments Google won’t move into for the next 10 years?

Yes, We Benefit Too

Of course, each of us get great benefit from sharing the conversion data with Google. All of the conversion dependant features mentioned above are fantastic. This is the rub. This is why it is, or at least may be, a deal with the devil but a deal none-the-less.

The point of this post is to at least make you aware of the risk, of the issue, so you can include that information in your thinking and decision making process. It’s not a no-brainer.

In fact, the truth is it’s pretty darn hard to resist what they’re offering. But it’s easy to see why you should. I really think it’s a very tough decision.

The cards are stacked in Google’s favor. In many ways the features they’re providing with Search Funnels and Conversion Optimizer and View Through Conversions, and many more to come I’m sure are almost necessary to play the expensive game we’re playing.

And the fact is that as soon as one of your competitors opts-in, and Google has the data, they essentially may as well have yours. Being the last hold-out probably doesn’t accomplish very much.

On the other hand, I’ll make a highly charged and sensationalistic analogy in the interest of controversy that may drive blog traffic – it’s a little like buying oil that we all know finances our enemies. You don’t want to do that, but you don’t want to walk to work either. Tough call.

The Way Out

As a final thought, I’ll offer a solution. Google could share via their API all the info that third parties (like ClickEquations) need to provide these same capabilities using our non-Google conversion tracking. Today they use proprietary and secret data that we don’t have, so we can’t offer fully competitive features.

For example, ClickEquations already includes powerful attribution and many of the capabilities just released in Search Funnels. But they can show funnels based on impressions and we can’t. If they would just kindly make keyword-level impression view data trackable by us and our competitors, we’ll be happy to offer similar functionality. The same is true for view through conversions – we can’t offer it because they don’t make it technically possible.

Google has a history of addressing these issues via increased openness. Slowly but surely. Their opt-out tracking capabilities for users, and the Google Analytics opt-out plug-ins currently being tested come to mind. These aren’t exactly the same kind of requests, but I’m writing this realizing that Google probably would consider and eventually will share this data with us.

They Have The Right

And given the way this post could be read, I’ll also clarify that I don’t think or mean to imply that Google is doing anything that isn’t legitimate, aggressive, and appropriately self-serving business practice. They’re supposed to grow their company and revenues, offer new features to clients, improve their competitive position, and even find what they believe to be the balance in using the power they obviously have. I think they do all of these things extraordinarily well.

But those of us on the advertiser side of the table should at least make our decisions equally thoughtfully.

2009: The Year AdWords Attacked Organic Search

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

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

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

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

If I missed a notable announcement, please comment.

2009 AdWords Changes Timeline

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

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

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The Future of AdWords

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

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

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

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

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

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

One Reason Exact Match Ads Aren’t Always Exact

text-ads-poopWhen you finally get a paid search tool (like ClickEquations) that allows you to see each search query that people typed matched directly to the keyword you bid on and the match type you set, you’ll soon notice that all of your Exact match keywords aren’t entirely exact.

Doing a little research and experimentation while preparing for SMX, I just came across a great example of one reason why this is true.

Look at the ads to the right. Which one is not like the others?

One of our clients sells products to help Fido keep himself together, and I did some searches on that topic. Then a search for ‘Premium dog collars’. That’s the search which delivered the ads you see.

Google however remembered that not long ago I was concerned with the other end of the animal, and slipped the Poop ad into the mix.

Had I clicked it, my search query of ‘Premium dog collars’ would show up, correctly, for the exact match keyword/phrase ‘dogs eating poop’.

Just so you know.

Heading to SMX in San Jose? Come see the new version of ClickEquations at our booth, or catch me in the Quality Score or Text-Ad Testing workshops.

Search Query Tracking At Risk in Adwords?

ClickEquations readers and customers know that we consider search queries, the words users type to initiate their search, as a vital part of paid search reporting and management.

Just yesterday our post pointed  out that keywords themselves aren’t really important, they’re just a way to attract search queries. In High Resolution PPC (our upcoming e-book) we talk a lot about using the match type, negative, bid, and other options to tune campaigns around search queries.

darkviewIf they were gone, paid search would return to the dark ages.

But apparently an in-test version of Google search results makes search query tracking impossible.

Yikes.

For now, we’ll assume this is a by-product of the fact that it’s a test. It seem unimaginable that Google would take away (rather than enhance) this ability.

Hopefully someone at Google will re-assure us that search query reporting will remain. Until then, we’ll keep watching and report on any developments.

UPDATE: Found in the comments of the post referred to above, I haven’t seen the original

Here’s a comment from Matt Cutts on the issue:

“Were continually testing new interfaces and features to enhance the user experience. We are currently experimenting with a javascript enhanced result page because we believe that it may ultimately provide a faster experience for our users. At this time only a small percentage of users will see this experiment. It is not our intention to disrupt referrer tracking, and we are continuing to iterate on this project. For more information on the experiments that we run on Google search, please see: http://googleblog.blogspot.com…..-test.html.”

Search Engines: Friend or Foe Redux

I didn’t believe it when I first saw the blog posts and tweets. People seemed to be reading more into a Yahoo T&C that was possible.

It just didn’t make sense that Yahoo would actually make substantial changes – new keywords, new text ads, new ad groups – in their customers accounts.

But it turns out not only was it true, but Yahoo had the nerve to come out and defend the practice.

Six months ago I wrote about the way paid search advertisers view and think about paid search engines.

sullivanYesterday Danny Sullivan – who is not only perhaps the most knowledgeable person out there about the ways of the search engines, but also a very thoughtful and considered writer and thinker – took Yahoo to task for their behaviour.

Advertisers are not idiots, nor are they children. And they got treated that way by Google for years, denied the ability to easily opt-out of programs like AdSense For Content, if they so wanted. You couldn’t do that, because Google was steadfast that offering such options would just be too confusing for those poor little advertisers to understand. Things have gotten better, so for Yahoo to start acting like the Google of old? It’s astounding.

Yahoo should have never given itself the right to make changes this way. They should have asked advertisers if they wanted this “service,” to be more transparent and honest with them. They certainly shouldn’t have reacted with a “we’ll do what we want, you all don’t know better” post as they did.

The specific issue at hand is important, and all Yahoo advertisers should make their thoughts known to via their account reps. But the broader point is critical too – in many substantial ways these search engines don’t treat us that well.

Google Adwords Impression Share – Deep Dive Part I

What if your ads didn’t run?

admissingYou picked the keywords, placed the bids, people searched, but your ads didn’t show up?

It happens every day. In almost every one of your campaigns.

It’s documented in a metric called Impression Share (in Google Adwords, no MSN or Yahoo equivalent yet.)

Impression Share displays the percentage of the time that your ads were displayed to people who entered search queries which match your keywords (at their specified match types).

100 minus Impression Share is the percentage of the time your ads didn’t run when you thought they would.

If your campaigns are profitable, the missing impressions are missing profit. Who can afford missing profit these days?

Three things stand between you and this extra profit:

  1. Getting your Impression Share metrics.
  2. Knowing what they mean.
  3. Taking the steps necessary to drive Impression Share up.

Finding Impression Share
To get an impression share report most people have to go to the Reports tab in Adwords, build a Campaign report, and edit the fields to include IS, Lost IS (Budget), Lost IS (Rank), and Exact Match IS. You can’t access these metrics at the AdGroup level (a shame we’ll decry another time).

isoptionsImpression Share Options in Google Adwords Report Configuration

If you use ClickEquations, you can see Impression Share right in the Campaign reports, or in any report or dashboard built in Excel with ClickEquations Analyst.

Impression Share Metrics in ClickEquationsImpression Share Metrics in ClickEquations

Understanding Impression Share
There are four Impression Share Metrics. IS, IS Budget, IS Rank, and IS Exact. The first three are relatively straight forward. The last is a bit confusing.

  • Impression Share = The percentage of the time your ads where shown (for this campaign) out of the times it was eligible to be shown. Eligible means the search matched your keyword, your account was active, the geo-targeting and day-parting and other settings were right, etc.

The next two metrics explain the Impression Share you didn’t get. If your Impression Share is 70%, then your Lost Impression Share is 30%. But why didn’t your ads run those times? The next two metrics tell you:

  • Lost IS (Budget) = The percentage of impressions lost due to budget constraints
  • Lost IS (Rank) = The percentage of impressions lost due to low Ad Rank (cost-per-click bid x Quality Score).

So Impression Share + Lost IS (Budget) + Lost IS (Rank) = 100%. These tell you what you got and what you didn’t get, and why.

The last one is trickier. For that reason I don’t think it gets the attention it deserves. And I’ll admit that I didn’t understand it until today when I started digging into this topic while doing some analysis work.

  • Exact Match IS =  The impression share of your campaigns as if your keywords were set to Exact Match. That’s the official Google definition – the one that seems generally misunderstood.

So let’s try it a different way. Exact Match IS tells you the percentage of the time when your ads were displayed for search queries that exactly match the keywords in your campaign.

One minus Exact Match IS is the percentage of the time when someone typed EXACTLY your keywords in as their search query and Google still didn’t show them your ad.

Using Impression Share
The IS metrics are great because they tell you things you could otherwise never know about your campaigns.

Foremost, they tell what you’re getting and what you’re missing in terms of impressions – and from there the calculation of missing clicks, conversions, and even revenue/profit is rather simple (see chart 2 below).

This is huge. We can finally at least partially answer the perennial question ‘How much more could I make from my paid search campaigns?’.

Start With Exact Match IS
Although it somehow seems offered as an afterthought metric, I’d recommend starting by looking at your Exact Match IS.

This simplifies the world and if you’re buying anything near the right keywords provides a sense of how you’re doing in terms of getting shown to the people looking for you.

Google Adwords Exact Match Impression ShareGoogle Exact Match IS (Chart from ClickEquations Analyst)
(Click to enlarge)

Revenue & Clicks Missed via Impression ShareExact Match IS Graphed As Revenue & Click Opportunity
(Click to enlarge)

If your Exact Match IS isn’t high (as usual there’s not simple way to say what that means, but let’s go with 70% or higher) then you really need to work your way down the list and think about your keywords, bids, quality score, ad copy etc.

Think about it this way: if Google doesn’t think it’s worth their while to show your ads to people typing in exactly the keywords you’re buying, how can you expect them to think running your ads is worth it for search queries you aren’t even directly buying?

Now Look At Impression Share
Let’s assume you have good to great Exact Match IS (you worked that out over the last 90 seconds right?). Now look at regular old Impression Share.

Google Adwords Impression Share ChartGoogle Impression Share (Chart from ClickEquations Analyst)
(Click to enlarge)

Here you’re likely to see something ranging from confusion (some highs and some lows) to a real bloodbath (all lows or at least no highs).

The reason these aren’t all 98.7%? The only easy answer is if you’re lucky enough to have some %’s in the IS Lost Budget column. And I say lucky only because that column is at least definitive. You can spend more and get those impressions.

Lost IS (Rank) theoretically explains the rest, but really it doesn’t explain very much.

Rank means Ad-Rank. Ad-Rank is Bid x Quality Score. Bid can simply be an insane fee you pay despite what something is worth, you probably don’t want to ‘win’ that way. Quality Score is determined by many things, as we’ve been over.

So Impression Share provides an easy way to see something, and know something that is very important to know. But it doesn’t provide a magical simple path to improving the problems it helps you find.

End of Part I

To solve our problems we’ll have to follow the path through our campaigns.

Impression Share forces us, if we look at it hard enough, to understand the roles of both bids and quality score, to think about our match type strategies, to organize our campaigns more effectively, to include the right keywords not just the most keywords, and to broadly see how interconnected the many options really are in a paid search campaign.

We’ll dig into that work in a follow up post later this week.

Google on iPhone and Local Search

Continuing the trend of pontificating about next year, playing with the new Google iPhone Search App, it occurs to me that this is IT for igniting local search. (NY Times Story Here)

Whenever Google starts putting ads into those results that is, which may be a while but we all know is coming.

Suddenly localization of advertising isn’t dependant upon either local qualifiers (words like “boston” or “back bay” in the query), or IP-based detection.

Now GPS (or cell-tower triangulation) adds the qualifiers automatically. And the placement and utility of the app will cause searches an very local queries that people would have never done at their desks or even on laptops.

It will be interesting to see how this type of geo-targeted result gets priced, since local bidding competition will be low.

Google Quality Score Gains More Importance

Google is again modifying both the calculation and impact of their ‘Quality Score’ metric. As with most Google changes, the stated goal is improving search quality and user experience. The coincidental result is that Google will make more money.

There are two changes this time:

  • Quality score will now be ‘position adjusted’ to take into account the location of the text-ad when the click-through occurs. This makes it ‘more accurate’. Makes me wonder why this didn’t happen a long time ago. This increases the value of extensive text-ad testing.
  • Quality score can now cause an ad to move above another ad it would normally rank below IF this jump pushes the ad to the top of the page (rather than the right edge). (That’s a bad quick summary, read the Google announce for the details.)

You can read some worthwhile thoughts here and here and here or here or here.

Beyond these details what strikes me is how important quality score has become to paid search management and results.

Quality score drives bid requirements, quality score drives ad position, quality score drives impression share, and now quality score drives the chance to leapfrog your way to the top center of search result pages.

What Do We Know About Quality Score?

Although quality score plays a central role in how your money is spent and made in Google Adwords, it is officially a ‘secret formula’.

Like PageRank on the SEO side, Google makes only vague pronouncements while pundits and practitioners share theories and recommendation endlessly – but nobody can tell you definitively how to maximize your quality score.

It still isn’t even that easy to see your quality score, although it is getting easier. Google recently changed the way they display quality score – giving it an integer value – but it’s still under a ‘work for it’ pop-up in the Adwords interface. On the positive front, they have finally added quality score to the API (thank you!) so third-party tools can begin to make use of it.

But also like PageRank the scores tend to clump around certain values, and the distinctions between close numbers aren’t obvious.

Also, and this is just a hunch, I’d bet nearly anything Google doesn’t maintain or use the number as an integer. So two keywords from two different bidders that both show a QS of ’7′ might in fact be one with a 7.0001 and another with a 7.9998.

Four Conclusions

  1. Google has an awesome business. They sell a product with secret specifications which are subject to change, and charge whatever they want without even telling anyone why or how. Nobody but the Mafia selling protection services to local merchants ever got away with this before.
  2. Advertisers have to really play the ‘chase the quality score ghost’ game. Obsess about CTR’s and align as many of the other known factors as possible. Live with the fact that you’ll waste time trying to please the QS algorithm because there’s no published list for how to get into quality-score-heaven.
  3. Advertisers should continue to clammor for more openness from Google as to what counts, how much, when, and how we’re charged accordingly. Neither #1 or #2 should be true.
  4. I need to spend a lot more time thinking and writing about Quality Score. It’s a big deal.

Google Grants Clarity on Search Network Stats

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.

Rethinking Paid Search

Two years ago we took a deep soul-searching look at paid search management practices and technology and decided both were inadequate.

Since then we’ve developed completely new management practices and technology, and it’s time to roll them both out publicly.

The management practices are built around a framework called High Resolution PPC. It’s based on the idea that there are three distinct stages in the paid search process and specific steps and checks to sequentially create a well formed and effective campaign.

The technology is our ClickEquations platform, and was developed based on the idea that paid search is not as efficient and effective as it could be because the software tools we have had are inadequate in a number of very specific ways.

Background
We’ve been professionally managing paid search accounts for about five years. As the market and engine platforms have developed, the size and complexity of the accounts managed has grown. Working with both venture-backed startups and Fortune 100 companies we live with high expectations, competitive sensitivities, and serious budget and ROI oversight.

While it’s been exciting to go along for the ride as the market exploded and the technology evolved, anyone who’s lived deeply in paid search management over the past years knows the day-to-day hasn’t been exactly a picnic.

It’s a lot closer to a horror show.

The search engines are opaque (to put it kindly) on multiple layers. If you try to actually figure out what’s happening and why, you find key information is missing, available information is contradictory, and things aren’t exactly consistent. The Matching Algorithms used by the Search Engines and their rules change constantly.

The image of easy-management and easy-money that caught the media’s attention in the early years is ingrained in the imaginations of VPs of Marketing, Merchandising Managers, and even some Directors of eCommerce. Which means they have expectations and make requests that make the PPC Manager’s head spin – on a daily basis.

But most importantly, the amount of change that the industry has gone through over these short, jam-packed years has not been kept up with by either the ‘best practices’ or the ‘delivered technology’.

Paid search management is a young profession, one in which everyone has been learning on the job, sharing info via the web, and attending  those endless conferences, but past a very small number of truly universal tactics there is no agreed upon ‘right way’ to organize and manage paid search, in even the most general sense.

That’s no way to spend $9 Billion or $10 Billion.

And the software tools haven’t fared will in this rapid-change environment either. The engines built interfaces that primarily serve their own needs. Instead of thinking about how paid search managers actually should and do work, and building tools to facilitate this effort, the tools are organized around the needs of the engines and their algorithms.

This leaves search managers often facing screens with 5 open applications, each which has one piece of the data or one tool they want, none designed for the whole job. In this environment work flow requires on a lot of application and context switching, cutting and pasting, and mental contortions supported by the acceptance of silly limitations and obvious inaccuracies.

We think it’s time for both the process and technology of PPC to catch up with the market realities and demands.

Introducing High Resolution PPC & ClickEquations
In the next few posts I’ll formally introduce both High Resolution PPC and ClickEquations.

High Resolution PPC starts with three primary goals – targeting the right prospects, assigning an accurate value to each, and then satisfying them. It provides the context for using the available paid search controls and options with clear ways to measure results and priorize work.

ClickEquations was and is being developed with three primary goals as well – delivering clear and accurate data, helping to prioritize opportunities and tasks, and automating as many PPC process steps as possible.

We’re excited to share the results of the last few years of work, and are eager to get your feedback.

After the upcoming introductory posts, I’ll deep dive into the specific components of each over the coming weeks and months.

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Some of Our Clients

  • Comcast
  • Clix Marketing
  • Beau-coup
  • Uncommon Goods
  • Gyro:HSR
  • Portent Interactive