Recently I attended an online marketing conference in Seattle to find out the latest trends within PPC and more importantly – Google Adwords. As always, I was underwhelmed by the sheer amount of things I was asked to buy, and the amount of snake oil I was expected to consume… but one thing rang perfectly true as a 100% proven technique to win at online advertising with Adwords – Updating Your Ads.
I don’t mean updating your ads because they are bad or updating them because you have something “new” to say about your business. I mean always, always, always testing new ads. Why? Because you will save quite a lot of money doing so.
The Secret Formula
Google isn’t as complicated as you might think. There are some very basic ideas to keep in mind when dealing with them. The most important one of these being – don’t ever try to cheat them in any way. And this means that you should always do right by the customer, the publisher and in turn yourself when thinking about your ads. The second rule… Google loves money. But they make it in a very altruistic way.
With that said – Google applies a Quality Score to all of your keywords, and even slightly to your groups and campaigns (structures of ads within Google). It’s a very simply idea… the better your Quality Score – the less you will pay over time to advertise.
How do I get a good quality score? Well… write a really good ad. And rotate that ad with variations and adjustments as often as you can. The more your ad gets clicked – the more your ad will get shown. The ad is in direct correlation to the quality score. So you may be asking yourself, “I already have a great ad. Why do I need to change it?” We will talk later about something called multi-variant testing – but… know this… however great your ad is today, will not correlate through tomorrow. I.e. – write new ads to challenge the already existing “great ad”.
How Google Sees Your Money
Think of Google like a wheel… And there are 3 pieces of the wheel – the advertiser (you), the publisher (other websites or Google themselves), and the customer (your future client). Google wants everyone treated fairly, but it also wants to make the most money it can and to do it in a very egalitarian manner. They want all parties to get the best out of their experience with Google and they have developed their system around – IF YOU WRITE THE BEST AD – you are obviously the best advertiser. And hence – we will show your ad more and then make more money and the customer will be happy because they obviously like what you are saying… see the wheel? Good.
So here’s how competing campaigns look to Google:
Advertiser A is bidding $5 a click to run his ad and is getting a 2% Click Through Rate (CTR – how often an ad is shown / how often it is clicked)
Advertiser B is bidding $2 a click to run his ad and is getting a 5% CTR
Advertiser C is bidding $8 per click to run his ad and is getting a 1% CTR
Now what dictates a GREAT CTR? Well it’s a couple things but the most important thing is the quality, newness, and specificity of the ad. In order to get all those things clicking at the right time – we need to write and test more and more ads all the time.
So the way Google does their math is to say “If I serve this ad X times (let’s say 1 million) then I will receive Y.” The guys with the biggest Y will always win for Google. But since part of Google’s payment is predicated on the users interaction with your ads (clicks) than the best ad gets the best placement.
Advertiser A ~ 1M impressions X 2% X $4 = $8,000 (2k clicks to advertisers site)
Advertiser B ~ 1M impressions X 5% X $2 = $10,000 (5k clicks to advertisers site)
Advertiser C ~ 1M impressions X 1% X $8 = $8,000 (1k to advertisers site)
Now – which one of those do you want to be? Advertiser B of course – and the only way Advertiser B achieves that success is by writing and testing better ads than the competition. So… get out there and start mixing it up. Keep track of your successes and failures but always be testing to find the MOST effective ads you can. It will save you buckets of money in the long run.