Searchers never see your keywords, match types or bids. They do see their own search query and your text ad. Your text ad is the first opportunity you have to attract a potential customers.
Not surprisingly, your ability to write effective text ads plays a dramatic role in determining how many people you can reach and whether they’re the right type of customers. Yet, even the most seasoned marketers would fail at guessing which of their ads will be successful. That’s why PPC ad testing is fundamentally linked to profitable campaigns.
We’re big fans of testing and data based decisions, which is why we released Text Ad Zoom. Instead of relying on instinct and guesswork, Text Ad Zoom lets you pick the best performing ads based on statistically significant data.
To celebrate the release of Text Ad Zoom, I’ve scoured the web to create the Ultimate List of PPC Ad Testing Resources. It’s one stop for advice test design, measurement and a healthy dose of copywriting ideas, so you have something to test.
While I tried to be as exhaustive as possible, I’m sure that I’ve missed some great resources. Please add your favorite articles, videos and white papers/ebooks in the comments section and I’ll add them to the list.
PPC Ad Testing & Measurement
There is an art and science to PPC ad testing. These posts cover the ins and outs of campaign settings, test design, ideas for testing and how to analyze the results.
- Want to Double Conversions in One Month? Split Those Ad Groups by David Szetela
- Measuring a Text Ad’s Effectiveness by David Szetela
- Paid Search Ad Testing: Manage To ROI Or CTR? by Andrew Goodman
- PPC Testing Part 1: The Ground Rules by Josh Dreller
- Never Odd Or Even: PPC Ad Text Testing Made Easy by Jessica Niver
- Simple PPC Ad Tests Can Drive Up Your Click-Throughs and Conversions by Andrew Rudnick
- How To Write and Effectively Test Your PPC Ad Texts by Greg Meyers
- How to Execute a Flawless Ad Copy Test in AdWords by Ryan Woolley
- An Easy-To Follow Method For Ad Optimization & Testing by Crosby Grant
- Secret Truth Series #18: Effective Text Ad Testing by Craig Danuloff
- The Pitfalls Of A/B Ad Split Testing, Part 1 by Matt Van Wagner
- The Pitfalls Of A/B Ad Split Testing, Part 2 by Matt Van Wagner
- The Pitfalls Of A/B Ad Split Testing, Part 3 by Matt Van Wagner
- Step-by-Step Instructions For Testing Low Volume Ad Copy by Brad Geddes
- Statistical Significance: Not Just for Geeks Anymore by Brad Libby
- Visualizing your Ad Test Results to Boost Confidence by Chad Summerhill
- Best Practices and Text Ad Testing by Craig Danuloff
- Testing Ideas
- 5 Ideas for A/B Testing Your PPC Ad Text by Amber Speer
- Ad Text Optimization – What To Test (And When)? by Dave Greenbaum
- Ad Text Display URL – What to Test by Dave Greenbaum
- AdWords Settings and Features
PPC Ad Copywriting
Effective PPC ad copywriting distills every direct marketing principle into a few lines and a far too few characters. These posts were a bit harder to organize. I pulled all of the articles specifically focused on copywriting for beginners into one group. Lists of tips and mistakes to avoid were a popular set of headlines, though they’re not particularly different from the overview & advanced group, though easier to scan. If you’re looking for PPC ad inspiration, there’s not shortage in this list.
- Paid Search Ad Copy: Five Things Newbies Don’t Know by Andrew Goodman
- A Beginners Checklist for Writing Benefit-Focused Ad Texts by Pete Hall
- PPC 101 Writing Successful Creatives by Frank Watson
- Tips & Mistakes to Avoid
- The 4 Keys to Writing a Paid Search Masterpiece by Jeremy Hull
- 9 Mistakes When Creating Ad Text by Amber Speer
- 9 Tips to Write Effective Google AdWords Copy by Saad Kamal
- 7 Ways to Be Sure You’re Writing the Best Ads Possible by Amber Speer
- You Will Never Write the Perfect Ad Text, but Here Are 2 Ways To Keep Getting Closer by Joseph Kerschbaum
- The 6 Next Steps After Your AdWords Content Optimization by Joseph Kerschbaum
- Paid Search Ad Copywriting: 7 Heavenly Virtues by Andrew Goodman
- 8 Essentials For Crafting Killer Paid Search Ad Copy by Alan Rimm-Kaufman
- Overview & Advanced
- Secret Truth Series #17: Lament Of The Text Ad Copywriter by Craig Danuloff
- Effective PPC Ad Copy, Part 1 by Ron Jones
- Effective PPC Ad Copy, Part 2 by Ron Jones
- Paid Search Ad Copy: Kicking It Up A Notch by Robert J. Murray
- Two Advanced Tactics for PPC Copywriting by Josh Dreller
- The Right Brain Of Paid Search Ads: Tips & Tricks For Creative Ad Copywriting by Josh Dreller
- Tailor Your Ad Copy to Buy Cycle Stages by Mona Eleseseily
- Killer PPC Ads: The Final Word by David Szetela
- PPC Advertising: Art or Science? by David Szetela
- The Secret Formula for Writing Mesmerizing Headlines by Sherice Jacob
- How to Train PPC Copywriters: Five Pay-Per Click Copywriting Best Practices by Dave Greenbaum
- Creating Killer Ads Using Bing Dynamic Text by Jen Barrett
- Why and How You Should Rethink Ad Writing and Bidding Strategies by Bryon Watson
- Writing Ads: Bust out of a Rut by Perry Marshall
- How Can I Make it Better? Part 5: Improving Ad Text by Rob Boyd
- Kick Your Quality Scores Back Into Gear with a Few Ad Text Changes by Amber Speer
- Using Ad Text to Find the Right Clicks by Andrew Rudnick
- Stop Spending Thousands of Dollars on Unqualified Traffic by Writing Smarter Ad Texts by Amber Speer
- Write PPC Ads that Scream and Stand Out From the Pack by Joseph Kerschbaum
- How to Write Ad Texts that Promise and Landing Pages that Deliver by John Lee
- Catch the BEST Leads, Not the MOST Leads by Using Qualifiers in Your Ad Text by Amber Speer
- The Benefits of Using Benefit-Driven Ad Texts: What’s in Your Tackle Box? by Joseph Kerschbaum
- Catch More Clicks and Conversions with Better Ad Text: Use the Right Lures! by Joseph Kerschbaum
- Ad Text Evolution: 5 Changes to Your AdWords Ads & How They Affect Your Bottom Line by David Greenbaum
- Ad Text Tips and Tricks for the Content Network by Erin Sellnow
- What Your Text Ads Say About You by Erin Sellnow
Videos, Webinars & Slide Presentations
If your brain is numb from reading about PPC ad testing and copywriting, check out these videos and presentations instead.
- Write Killer PPC Text Ads
- PPC Text Ad Statistical Analysis
- PPC Ad Text Best Practices from PPC Hero
- How You Can Write Killer Ad Copy
- The Van Wagner Ad Sets Optimization Model
- Test That Ad (Panel presentation at SMX)
- Writing & Testing Ad Copy – Connecting With Your Customers From The Very Start
- Require Registration
- Paid Search Testing & Experimentation: Optimizing for Superior Results
- Writing Killer Text Ad Copy: 1001 Secrets for Success
- Beyond the Text: Getting the Most from Your PPC Ads
- Breakthrough in PPC Ad Testing and Optimization: Using Ad Sets to Improve Even Your Best PPC Ad Campaign
- PPC Testing & Optimization 2010: Best Practices
Is it just me, or does it seem like this year was twice as busy as any previous year in paid search? It was a busy year on the ClickEquations blog front as well, so I figured I’d recap with our 10 most popular blog posts of the year!
Not surprisingly, the list is dominated by the posts that expanded on our highly downloaded eBook, the 21 Secrets Truths of High Resolution PPC. We’d love to hear what you liked this year and what you want us to cover next year.
Without further ado, here are the 10 most popular ClickEquations Blog Posts of 2010:
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.
In the post, we unravel the role bids actually play in determining your CPCs. Read more.
Many say that using more exact match within your campaigns is a way to boost quality scores. Others point out that match type has no impact at all on quality score.
It turns out that the truth is somewhere in between. Read more.
The idea of creating highly targeted ad groups, so that all of the attracted search queries are well aligned with the included text ad copy, is one we’ve written about often.
Some people have taken that idea to the extreme by suggesting you should create ad group with just one keyword.
This blog post breaks down that argument and recommends against single keyword ad groups. Read more.
We’ve always been huge believers in the idea that search queries are more important than keywords. It’s an idea woven throughout ClickEquations.
In the July release of ClickEquations queries become even more actionable. We made it possible look inside the performance of any keyword and directly manipulate the queries that have consumed expense or driven revenue and tune the relationship between those queries and specific ad copy.
There is only one way to measure success with text ads: Testing.
But testing requires more than simply running a couple of ads simultaneously. It requires the conditions for a fair test, a clear goal, and valid measurement and analysis. Much of what passes for text-ad testing in paid search lacks one or more of these requirements.
This blog post looks a little closer at each to better understand how to properly test text ads. Read more.
Day in and day out, we’re all trying to improve results and move from our current profit to our potential profit. As paid search marketers we tend to divide our time into 3 major areas: Research & Planning, Campaign Management, and Analysis & Site Experience.
In order to be able to move from your current profit to your potential profit, you have to be able to do each of these areas more effectively and efficiently. So how do you do that and how do search marketing tools fit into the mix?
In this article, I talk about when it makes sense to invest in paid search tools vs. education and list 43 tools to consider. Read more.
The Max CPC and quality score of a keyword determine its position, and position and quality score drive actual CPC. So exactly what effect does quality score have on cost?
Google’s announcement of AdWords Search Funnels was an imporant milestone, legitimizing and expanding the visibility, role, and in many cases capabilities of PPC revenue attribution.
In this post, we ask publicly 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? Read more.
#2 – 6 PPC Analysis Tips
The idea of a good paid search account is a myth. An account is simply an aggregation of campaigns. Campaigns combine ad groups. Ad groups roll up text ads and keywords. Keywords and text ads exist only to attract search queries.
Effective PPC analysis is about finding the segments in your account that deviate from the norm. In many cases, you’re leaving opportunity on the table.
This highly actionable blog post covers 6 ways you can make your PPC analysis more effective, including Internal Benchmarks, Measuring Against Potentials, What’s Changed, Trend Charts, Against Goals, and External Benchmarks. Read more.
A few years ago when asked for the #1 tip to improve a campaign, Craig wrote that segregating brand keywords was the task that he 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. Read more.
The new Keyword Zoom feature in ClickEquations is an amazing way to tune your campaigns – cutting waste and improving targeting, reach, and results. In this first of a series of posts we’ll look at exactly how it helps.
This time we’ll looking inside the ClickEquations AdWords account and see how we’ve used the feature to our own advantage.
Query Mining 101
The purpose of the Keyword Zoom feature and the point of query mining is to review the search queries that the engine has matched to your keyword (and you’ve paid for) and change the rules of the game so they’re more in your favor in the future – by adding negative keywords or new keywords (usually of more specific match types).
We bid on the keyword ‘pay per click software’ in several match types. Let’s look at our recent activity in the Broad Match version.
Query 1 : Synonyms, Match Types, and Quality Scores
The most active search query for the keyword is ‘pay per click program’ with a whopping 27 clicks and almost $90.00 of spend.
Most of the time when one specific query dominates a broad match keyword like that that you’d want to at least consider moving it out into its own ad group. The deciding factor on moving it is probably how closely the query and the intent is to the broad match – in this case ‘program’ is a common synonym for ‘software’ so it would be fine to leave it alone.
But $90 is a lot of spend in a couple of weeks, and you’d think that by using ‘program’ instead of software in the ad copy, we could improve quality score and maybe save a few bucks on the clicks.
Surprisingly, you can’t. Or at least we haven’t been able to.
It turns out the keyword ‘pay per click program’ is already in the account, in broad, phrase, and exact match – but have quality scores of just ’4′. Since the keyword ‘pay per click software’ has a quality score of 7, the broad match of ‘pay per click software’ is beating the exact match of ‘pay per click program’ for the query ‘pay per click program’.
In some cases we might want to go work on that, and negative the phrase here, but in this case it’s a synonym – people seem happy to click it, Google likes it better (per the quality score), why fight it?
After seeing this data we decided to pause the ‘pay per click program’ keywords (with their lower quality scores). Future queries will match into this keyword and we’ll benefit from the higher quality score with better positions and lower CPCs plus lower the drag on our account from those low quality score keywords.
Query 2: Keyword Expansion & Steering
The next matched search query that we notice is ‘pay per click automation software’. The word ‘automation’ is one people use to describe what they’d want from a paid search platform, but it seems too specific to belong with the general keyword ‘pay per click software’.
A little checking proves that we do have a full ad group of ‘ppc automation software’ keywords, but apparently neglected to include the longer ‘pay per click automation’ version.
So we’ll click the ‘pay per click automation software’ query, click the green + sign to promote it into it’s own keyword, edit it down to just ‘pay per click automation’ and add it as a new phrase match keyword into our existing ppc automation ad group where the text ad copy mentions automation. That’s a lot of steps to take quickly in one single dialog box.
Query 3: Negative Waste Removal
Next the query ‘pay per click application development’ catches our attention.
When someone uses the word ‘development’ they’re not looking to buy ready-to-use SaaS software. So we wasted $2.99 on this click and would waste 100% of any future matches to similar queries.
So we’ll highlight that query, click the red + to create a new negative keyword, edit down to just the word ‘development’ and set it as a campaign negative. Problem solved.
Eliminating Some Real Waste
Sometimes Keyword Zoom shows you where there is room for tuning and improvement.
Sometimes it makes it clear that a keyword is a bust. Look at what it shows us for a term related to one of our competitors, Atlas Search.
It turns out – not surprisingly – that broad matching that term with two very generic words both of which have common and alternate meanings, gives Google a license to match all kinds of queries that clearly do not come from people looking to buy paid search software.
In this case, the solution is easy: click the edit button next to the keyword and pause it.
100% savings from this day forward.
The two keywords discussed above are good examples of the kinds of benefit Keyword Zoom provides.
In just seconds we’re able to find some low quality keywords that should be paused, redirect some queries with specific intent to better ads, and avoid wasting money on future irrelevant queries.
Each step is small in the specific queries and volume impacted, but if we repeat this procedure regularly, working on our most-clicked and most-costly keywords, the cumulative effect can be dramatic. Every step should increase CTR which drives up quality score. Most steps reduce waste which drives up ROI. Better match between queries and text-ads produces better conversion rates. There are many benefits and each one compounds from the day you complete it on into the future.
We’ve been advocates of query mining for a long time, but like anything else a friction-free tool makes all the difference in day-in and day-out execution.
This was a simple initial real-world example. In future installments in this series we’ll examine more ways our clients are benefiting from this great new feature.
Our ebook The 21 Secret Truths of PPC takes a broad strategic and tactical look at paid search. Over the past few months in this series we’ve looked at each truth from another angle, expanding or elaborating on the concept each contained.
If you were to attempt to sum up the ideas in this series, you might get something like this:
Paid search is the process of answering questions. Focusing on the search queries that deliver those questions rather than the keywords that attract them makes it easier to provide direct and persuasive answers in your text ads.
The organization of your account is the key to a lot of your success. The way you choose to group keywords into ad groups defines the way your text ads align with the search queries you attract. And the way you place ad groups into campaigns defines the utility of your reports. Segmentation is an equally important part of your organization. Keep brand, head, content network, ego-based, and other keyword groups isolated so that their unique attributes can be understood and optimized.
At the keyword level, a focus on search queries will help you to reduce your reliance on broad match. Mine your search queries for new keywords with more targeted match types and new negatives. And pay attention to click-through rate and the factors that drive quality score. Bidding is important but not omnipotent. Don’t expect too much from or apply too much effort to bidding until your keywords are otherwise optimized. Make sure you’re measuring profit as your goal, not just return on ad spending. And when you’re buying keywords for ego-based(non-economic) reasons, make bidding decisions accordingly.
Writing effective ad copy is difficult given the complex communication goals and tiny available space. The only way to succeed is via trial and error, otherwise known as testing. While gaining the click is your initial goal, it’s what your prospect does after that click ultimately determines your success. Consider and coordinate the entire post-click experience as part of your overall PPC management program.
And finally, although your account is large and ever-changing, there is almost certainly a concentration of revenue within a very small number of keywords. So prioritize your time and adjust your expectations accordingly. Don’t waste time chasing your own tail.
Before moving on past this series, I want to ask for more feedback. We’ve had thousands of downloads of the ebook, and tens of thousands of page views in this series, and not one good argument yet. And not nearly enough praise
Which of the truths do you think is just an opinion? Are there central PPC truths that were left out? Speak now before the guy with the stone tablets and chisel gets to work.
Get The Free eBook
This post is part of a series extending and amplifying the ideas in our free ebook ’21 Secret Truths of High-Resolution PPC’.
If there’s a theme to the 21 Secret Truths, it may be that almost nothing in paid search is what it appears.
Keywords aren’t what you’re trying to optimize, ad groups aren’t for organizing keywords, campaigns aren’t for organizing ad groups, bids don’t determine how much you pay, and so on. So perhaps by now it won’t surprise you to learn that the profit reported by paid search often isn’t real either.
When Making Money Isn’t Enough
The idea of spending $1 and getting back $3 sounds great. If we take in more than we put out, our business is profitable. Everyone knows that.
But as with all the other little-white-confusions, the definitions of ‘cost’ and ‘revenue’ used in the common language of PPC are incomplete and inaccurate.
The trouble is that AdWords, GA, Yahoo, Ad Center, and many other tools have no mechanism for including the cost of goods (or cost of sales) in their reports and calculations. They report Gross Profit, and Gross Return – which they call return-on-ad-spend or ROAS. (Although Google does sometimes stretch and literally call this number ‘profit’.)
ROAS is a ‘better than nothing’ metric. But ROI, a true Net Profit based return calculation is vastly superior and more accurate. Anyone managing substantial paid search programs for products or services that don’t have a flat cost shouldn’t settle for ROAS.
How ROAS Lies
The trouble with ROAS isn’t just that it gives the false or increased appearance of success. It shows positive numbers that should be negative, and high positive numbers where there should be low ones – that is true.
But for most businesses margin levels aren’t consistent. Some products or services are marked up 20% while others 80%. This means that all ROAS numbers aren’t off by the same percentage, so you can’t just adjust them in your head. And even if you know specific or approximate margins by product category, you can’t be sure which keyword drive which item sales. Very often the keyword ‘little black dress’ leads to the sales of shoes along with or instead of the dress.
Looking at ROAS vs ROI at the query, keyword, ad group, or campaign level always leaves a vastly different impression and lead to very different decision making and prioritization.
There are many data elements we use in PPC that should or could be improved, but betterness (I made that word up) is beyond our control. Accepting ROAS is voluntary and generally unwise.
It should be noted, if it isn’t obvious, that there are some businesses for whom ROAS is functionally equal to ROI, and therefore the ROAS problem doesn’t exist. Pure lead-gen with a single type of conversion is one example since there is functionally no cost-of-goods. There are others. So if in your business the gross profit is the net profit (at least excluding fixed cost and overhead which is generally not considered in the ROI calculation, this topic doesn’t apply.
But before it does, please go vote for The ClickEquations Blog in the PPC Blog category at Search & Social.
Just click the image to your left. Scroll down to Best PPC Blog, then click VOTE.
Ice cream for everyone if we win.
It’s just an honor to be nominated. Really. Now I’m going home to work on the acceptance speech.
Update: OK forget it. I just went through the process of voting, and I really don’t want to put anyone else through that. Sheesh.
We’ll find another way to feed our ego. But thanks for offering.
Every time someone executes a search, they’re asking a question.
They search because they want to learn about something. Or find out where something is. Or discover who has it or knows about it.
They may just be curious. Or the question may have been provoked by an urgent problem. The question could be simple or complex and the searcher might be sophisticated or naive.
But every search is a question.
Search engines deliver answers. They look at the word or words in the search box, assume or infer the question being asked, and then put together a list of potential answers to that question.
Paid search is your chance to offer your answer as a part of that list.
This simple truth – people are asking questions and you’re trying to answer them - is a great way to frame the process of managing paid search accounts.
It makes clear the fact that every step you take along the way should help to either target better questions, deliver better answers, or ensure that you pay a reasonable price for the privilege.
There are many complicated aspects of managing paid search. Accounts are large and business conditions change rapidly. There are confusing options, evolving algorithms, and aggressive competitors. This isn’t going to be easy.
But it’s nice to have a simple mental model to guide us: We’re just trying to answer questions.
The deal between Microsoft and Yahoo is very good for the paid search community. It creates a viable #2 competitor with enough market share to matter and a single API for developers to exploit. And Yahoo gets a few dollars for their retirement fund.
Some quick initial thoughts on the impact to each player in the game:
Advertisers get a single channel with 20-35% of the search traffic (depending on what and how you measure, and who you believe) which is *nearly* enough critical mass to actually spend time on. The core economic problem that Microsoft, and to a lessor degree Yahoo had before was that they didn’t offer enough inventory to justify the effort of managing let alone aggresively managing large keyword accounts on their platforms. Many advertisers have 20% of their keywords or less running on these engines, and spend 10% or less of their management time on them. Bing and Yahoo still need to attract users or advertisers won’t care. But at their current market share, or better yet if they can pickup 5 or 10%, there’s enough there to be worth the effort to equalize campaign sizes and spend perhaps 30% of campaign management time on them.
Proof that being dumb and rich is a far better strategy than just being dumb. Nothing except their money has justified Microsoft’s existence in this market until recently. Bing seems a reasonable search engine, but the AdCenter platform is pure Microsoft, meaning anything-but-cutting-edge and won’t really offer even the baseline of what the market really needs until version 3.0. They seem to be trying, but in management tools, software and API features, and overall ‘state of the art-ness’ the teams over there need to re-triple efforts to deliver a platform and API set as rich as Google’s. If they don’t, users and developers who now have a large enough market share to bother, won’t have enough patience to work around the limitations it takes to do so.
Yahoo can now spend their time and energy on being second or fourth best at a wide variety of internet content and web-app plays, perhaps to eventually sell each of those to richer and dumber rivals. Or maybe the idea was to get out of search so Google would want to buy all their other assets. This is the Sarah Palin move of search – quit and declare victory.
Paid Search Platforms and Tools
For purely selfish reasons, we’re glad to see the Yahoo and Microsoft platforms consolidate. Every feature we add to ClickEquations that had to touch 3 different APIs took two or three times more time (at least) than if it only had to touch one. We can build more cool features to help advertisers faster now. As mentioned above, the AdCenter platform has plenty of Microsoft quirkiness to it, but we’ll hope and assume they listen to the market and evolve. But in the case of API vendors we can do more with less.
I believe that search result quality has a long way to go, that the loyalty Google has is to the brand and therefore ultimately could erode quickly. The Bing/Yahoo platform will likely very slowly pick up steam, but MS has to go do some HUGE bus dev deals to buy more distribution (AOL?) and continue to innovate on the results. Over time, they could substantially erode Google share, but the road will be hard and long. In this case, a perfect fit for Microsoft BUT they need to earn it they’re not just going to be able to out-last the competition or wait for them to commit suicide this time.
Enabling very weak competition to become marginally viable doesn’t hurt Google in the short run. The fear of actual competition and even market share loss could very well spur the very smart folks at Google on to deliver even better stuff faster, as competition always does. So in the short and medium terms I’d say this is good for Google (and helps get the Gov’t monkey off their back for a while). In the long run, I’d still bet on Google but Microsoft does have a lot of money and know how to compete.
But mostly, I’m just really happy we have one less API to support.
In the paid search world, Quality Score is the new black. Blogs, forums, conferences, and Twitter are full of discussions of what quality score is and how you can optimize it.
But the real importance of quality score has been a bit hard to pin down. Not any more – we’re going to reveal the exact $$ value of quality score.
UPDATE: Since this post was written, we’ve learned an important new fact about Quality Score – the numbers we’re shown are reported as integers between 1 and 10, but these are not the numbers or scale Google applies to in their formulas. Rather, they’re representative of the actual Quality Score in terms of 1 being poor and 10 being great. Knowing this, it seems unlikely the specific math and results described in this post are correct. The positive and negative effects of good and bad quality score remain true, and hopefully the numbers are roughly proportional. We’ll update this post further when we get more information.
Why Does Quality Score Really Matter?
The prominence of quality score has been based on it’s role in Ad Rank – the formula Google uses to determine the position in which your ad appears. Ad Rank = Bid x Quality Score.
But Quality Score also plays a very important role in determining how much you’re charged per click. This is a separate application of the value which occurs after Ad Rank is calculated.
The recently released Google Video by Google’s Chief Economist, Hal Varian helped clarify this point.
In the video Mr. Varian points out that your cost-per-click is calculated using the formula: Ad Rank of the ad below yours / your quality score.
So if you’re in position #1 with a quality score of 5, and the ad in position #2 has an Ad Rank of 10, your cost-per-click is 10/5 = $2.
So What Is Quality Score Worth?
Knowing this is how cost-per-click is calculated, we’re able to determine the specific impact of any quality score on your cost-per-click.
And therefore the exact cost or savings from any single-digit increase or decrease in your quality score.
Yes that’s right – we can tell you the specific change in your CPC that is due to the quality score you’re getting for each of your keywords.
For example, your QS=10 keywords are enjoying a 30% CPC discount as compared to if they were QS=7 and in the same position. And your QS=4 keywords are paying a whopping 75% premium for their position.
The table below contains the complete list. This details the positive or negative impact quality score is having on the CPC prices you’re paying.
These factors are true regardless of your bid, position or those of your competitors. These are the impacts of Quality Score on your cost-per-click, anywhere, anytime.
As you can see, there are serious savings to be had with high quality scores (8, 9, or 10) and very high penalty costs to low quality scores (6 or below).
How We Calculated These Numbers
We calculated these values by comparing the impact of quality score on the price established at a wide range of Ad Rank values. This analysis showed that when QS was applied as the denominator of the equation, the Ad Rank values didn’t matter – the impact of each step of quality score was consistent. (Check out the raw data). So it was a simple task to compute percentage of impact each different QS had on CPC.
Note that we set QS=7 as the neutral value because using ClickEquations to review a wide range of accounts we’ve seen that QS=7 appears to be the mean quality score across a very large and diverse set of keywords.
In other words, most keywords get QS=7, that’s the typical score. So quality scores better than 7 can be considered better-than-average and thereby beneficial, and quality scores lower than 7 are lower-than-average and detrimental.
Two Important Disclaimers
1) Since quality score is used to first compute the Ad Rank and then to influence the CPC, you wouldn’t actually have the position you do if you didn’t have that quality score.
So it isn’t exactly accurate to say that your keyword is paying 30% less for position 1 at QS=10 than at QS=7, because in most cases you wouldn’t be at position 1 if you did have a QS=7. I think the relative value for each QS remains valid and valuable.
2) Google very likely calculates quality score not as an integer but as a real number (you your QS isn’t actually 6 but rather 6.329498) which means the impact would be more linear and not in the big steps the charts suggest. Thanks to commenters for pointing out that this fact was left out of the original post.
What Does A 1-Point Change Cost You?
Based on the same numbers, this next table documents the economic cost or benefit of having your quality score move up or down by 1 point.
As you can see, if your QS=9, then moving up 1 pt (to QS=10) will give you a 10% CPC discount. Starting from that same QS=9 and losing 1 pt (to QS=8) will result a 12.5% % CPC increase.
A Clear New Reason To Improve Your Quality Score
Knowing that your quality scores are saving you up to 30%, or costing you up to 133%, should further motivate everyone to both know and work to improve your quality scores.
In ClickEquations we have a lot of features that can help you improve quality score:
- We list QS (and the related Min First Page Bid) right next to each keyword so you can watch them carefully.
- Our ClickShare metrics tell you which ad groups and keywords aren’t getting as many clicks as they should – and why – which can help you drive up CTR which is by far the largest driver of quality score.
- Our ClickVariance metric tells you when you’ve got keywords in ad groups which are under-performing based on CTR, so you can move them into their own groups and write more applicable ads, or pause/delete them – thereby driving up average CTR
- Our complete search query detailed reporting lets you add new keywords and phrases that users have proven that they click on
- Our multivariate text-ad testing tool is the best possible way to drive up CTR – often by 2X-5X which skyrockets quality score
- The Quality Score Distribution template in ClickEquations Analyst lets you keep a direct eye on how your entire campaign is doing relative to Quality Score – and we’ve just updated it to show the actual $$ saved and expended due to the quality score cost numbers released in this post.
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And A Warning
One small word of caution regarding the existing, and likely to continue, flood of tips on improving quality score. Be very suspect of anything which promises to improve quality score by any method other than improving click-through-rate.
Relevance has it’s place. But both the new Google Video and other recent disclosures make clear that CTR drives quality score. You will not have meaningful impact getting your keywords into your text-ads, grouping keywords in better ways, and many of the other tactics getting over-hyped in some quarters. Relevance plays a supporting role, as does landing page to an even lesser degree, but both are trumped and trounced by CTR. Get great CTRs and you’ll get great QS’s. There is no other route.
We hope you’re as excited as we are about the discovery of the true economic benefit and cost of quality score.
Another small victory for transparency in the paid search process. Which means another tool to help us manage PPC in High Resolution.
To learn more about quality score, read our complete Quality Score blog post series from several months ago, or check out the replay of our recent Quality Score webinar or our SMX presentation on Quality Score Tips on video.
I don’t believe firms should have any trademark protection in advertising, online or offline, with the exception of cases where an advertiser attempts to mislead a consumer into thinking they’re visiting or doing business with one company when it’s actually another company.
But the use of trademarks to compare or contrast is obviously – to me – legitimate.
It is something that happens naturally in the world every day and cannot be stopped or protected. It can only be stopped and protected in a few un-natural segments of communication and commerce where lawyers can beat sanity into the ground.
The search engines have been one of these places, and trademark holders can file to prevent others from bidding on their brand terms or using these terms in ad copy. Many companies do this, and unfortunately when your competitors block, it’s semi-understandable why your company might block too just to keep the playing field level.
I understand why a company would want to prevent others from competing with them. It’s a nice fantasy.
I even think the search engines, of their own volition, should offer registered trademark holders guaranteed #1 position and some neato ‘certified-official’ icon for their PPC adverts. Just because it sort-of-sucks to have to pay insane prices for your own name. I get it.
But that doesn’t mean others should be stopped from buying the trademarked keyword or using it in their ads.
It’s called ‘free speach’ and if you can understand trademark law it shouldn’t be that hard for you to grasp. Not the technicality, the concept. Anyone can say anything if they’re not hurting anyone else. In this case, if you’re not misleading anyone, you should be able to speak.
So Google has a policy I don’t agree with. That’s their right. (And it’s not the only one).
But should using words in a non-misleading way be illegal? The folks at 1-800-Contacts think so.
That’s right. The same people who could only come up with entirely of generic words as a company name, think that the combination of these terms should be illegal for use as keywords or in advertisements of competitors.