Below, we would like to illustrate by means of a simple numerical example, the importance of setting the right conversion values versus failing to specify them or posting the wrong ones. Our PPC hero is a plumber who created 2 accounts to market his services. His Google account is geo-targeted at a suburban residential area while his Yahoo account is aimed at a newly built housing estate. A conversion, or order, through the Google account brings him $250 in profits while through Yahoo only $80. These numbers represent his corresponding conversion values. His advertising budget is approximately $100 per week. 

The rows in the below table are colored in red, blue or green. The colors symbolize 3 basic scenarios: he initially set the wrong data (red), set no data (blue), or set the right data (green), relative to his corresponding conversion values.

Legend:   the wrong entries, missing entries, the right entries

In the above table, performance numbers are in normal font while input data is in bold and calculated values in italics. The columns are as follows: Account, Clicks, Average CPC, Number of Conversions, Conversion Value, Total Value of Conversions (Number of Conversions * Conversion Value), and ROAS.

Above the partition line (xxx…) are the “past” week’s data and beneath it the “next” week’s values. The partition line itself symbolizes the process of decision making.

Below the partition line, we entered the right conversion values for each color, so that the profitability of the decision could be measured. “Next” week’s data are calculated based on the reasonable working assumption that CTR as well as Conversion Rate remain unchanged and the weekly budget can be depleted.  

RED SCENARIO: The lowest red row is the result of the decision that the advertiser redistributed all its funds to Yahoo since after the first week the red Yahoo ROAS seemed to be the higher one. (0.17)

BLUE SCENARIO: The upper 2 blue rows are incomplete because this is the scenario in which the advertiser did not post his conversion values, as a result of which the Total and ROAS columns could not be calculated. Accordingly, no decision was made after the first week. Hence advertising went on as in the first week, just that we collapsed the 2 accounts into one G+Y row.

GREEN SCENARIO: The lowest green row is a result of the decision that the advertiser redistributed all his funds to Google since after the first week the green Google ROAS was the higher one (35.71).

FINDING: If the neutral “blue” scenario (G+Y) is taken as the basis for comparison, you may conclude that the wrong “red” decision resulted in a very huge 54% drop in ROAS while the right “green” one in a 19% increase.

CONCLUSION: All in all, if you fail to specify your conversion value you will probably miss out on improvements, while entering unrealistic data may lead to conclusions causing huge losses. Well, have you ever thought of setting your conversion value?

Google Video – lower quality, faster to display, click the “Play” button at lower left:

Click on the link at the end of this sentence for a higher quality, large QuickTime Movie – where you can see the detail of the slides and screens, showing precisely which links to click to setup a new AdWords account, as a new AdWords user.

The video shows choosing a Standard Edition rather than Starter Edition AdWords Account. I’ve picked “Standard Edition” because the best use of AdWords usually comes from the additional power of the Standard Edition account. The Starter Edition limits you to a single campaign – and you need at least two campaigns to fully manage performance.

In the video I warn that users should not use a publicly known email address, especially if they have given other people access to their normal email account; perhaps a family member or an office colleague. Since the AdWords account controls the spending of money, make sure that everyone who has access to the Google AdWords Account, uses their own account name; that way you can trace decisions and actions. Especially make sure that the account names that are used, are not published anywhere. My standard practice is that I have public email addresses and private email email addresses. The private email addresses are used for receiving email from AdWords only, so no one knows their identities, other than AdWords. If you know an email address to send me email, then that’s one email address you can be sure I won’t be using for AdWords management!

AdWords Account Activation Email

Note the addresses that Google uses in the confirmation eMail. Especially notice that the right URL to sign in to AdWords is “h t t p s : / / a d w o r d s . g o o g l e . c o m /” If you see anything else at the beginning of the URL, then you may be visiting a spoof site that will try to steal from you.

Campaign Setup

The video steps through the process. Key points:

• Name this first campaign “Keyword targeted” – because that’s what we’re doing
• Target one language and one country per campaign – this is usually the most effective
• If your budget is high enough, then select “Accelerated Spending” to maximise your impression volume
• If your budget is too low to spend all day, use the default budget method – this spreads spending through the day
• Deselect the “Content Network”, despite the popup window that warns you about losing traffic; we’ll set up the content network in a later video.
• Select “Rotate” adverts, rather than allowing Google to optmise; it is easy to manage advert performance and rotation allows you to optimise better than the default.

Schizophrenia Charity

You can guess at the most likely keywords that a Schizophrenia information charity should offer. As it happens, the advertiser decided to appeal to a particular symptom, hearing voices. So the advert didn’t include any of the keywords. That’s almost certainly why he has a poor quality score… Psychological factors.

User Psychology

If someone types in “schizophrenia”, then they probably are looking for information about it. If they type “red leather shoes” then they probably want information and possibly sales sites featuring read leather shoes. Advertisements that mention the keyword help to assure the user that the right advert is showing. By coming back to them with what they said, you show you are listening and that you address their interests. The difference in Click Through Rate (the percentage of impressions that result in clicks) between using and not-using the Keyword in the advert can be more than 50% – you can double click rates by using the keyword in the copy.

We’re going to use that technique of “mirroring” to help get a good quality score in the adverts.

If the keyword is “schizophrenia”, then we should use that word in the title of the advertisement.

If the keyword was “luxury red shoes”, then we should use that.

User Psychology – Continue The Dialog

Apart from using the keyword, what else needs to be said? Classic marketing – a Call to Action. Obviously you want people to click and come to your site, but what will make them come? A low selling price? A wider range? A free delivery service? Free extended warranty? What is *your* unique appeal that will have a segment of the audience click on your advert more than they will click on other advertisements?

In the case of the Schizophrenia advice charity, they probably have three audiences. The person who is hearing voices – who probably won’t be inquiring about Schizophrenia. The friends and family – the social network – of the schizophrenic, who may want support and advice and might be searching for “Schizophrenia”, or “hearing voices”, or “psychosis”, or looking up side effects of prescribed medication, or a bunch of other search queries. And finally medical professionals – the care network – who probably have specific terms and may be considering the use of specific drugs for treatments.

When you have three segments, and overlapping keywords, you should probably offer three different web sites. The types of people going to each should be different, will need different language in the landing page and think about the problems they are trying to solve in different ways. That also means that potentially you might *need* to advertise three times on the same keyword – expecting different segments to click on different adverts and go to three different websites.

We’ll look at that, a very advanced concept in advertising, later. For now, let’s focus on reaching the main groups in the obvious ways. As you learn the techniques, you can start to apply some subtlety!

Google Video about improving advertising with AdWords

Since publishing this article, Google has produced a short video that emphasises many similar points:

Summary

This technique is about focus for new advertisers. Instead of spreading widely and becoming confused, pick a keyword that is the essence of what you do. Whether that is “lawn mower repair”, “luxury teas”, or a charitable operation. Pick that one word and write the best advert you can, that will bring people to the best page on your site that addresses the implicit question. If you have to, create a new page to make sure you address the search query.

Restrict the campaign to avoid the content network. The content network has its uses, but you need to target in a different way, and the adverts often should be different. Budgeting – is tricky. Generally, for a first campaign, keep the bid lower in order to get more clicks from the budget. There are reasons to worry about position, but you’ve enough to learn getting just one AdGroup working properly.

Before looking at anything else, this would be a good time for you to explore the rest of the user interface, and especially look at the reporting and web analytics. Future steps in performance improvement will require web analytics on your web site, or AdWords Conversion Tracking… But that’s still a few steps away!

Updates

2009-06-06 – Added Google video about optimising adverts – it echoes many of the same points made here.

Do Not Click On Links In Emails About AdWords

If You Need To Check AdWords, Type The URL Directly In The Browser Bat

https://adwords.google.com/

The main causes for sudden increases in spending are that you have told Google to optimise on your behalf, or a news item is unexpectedly sending people to search, or there’s a seasonality, or that adverts stuck in editorial review have been released, or that your account is subject to either click fraud or theft.

Have You Recently Told Google To Manage Your Spending?

There are a variety of ways to manage your account. Google offers you the choice of using their own bid management tools to optimise conversions, or to spend to a budgeted amount. If you recall seeing screens offering you help in optimising your budget or your cost per acquisition – you may have told Google to spend on your behalf. We will be offering an article about Bid Optimisation and the effects.

News Explodes Search

Every so often, some news item will provoke a lot of search on a previously quiet keyword. Look for patterns of suddenly high impression rate keywords, which may decline almost as abruptly. We’ve seen cases where a single TV show can provoke an entire months normal spend in a few hours – if the search query is spot on for an unusual term mentioned in the news.

Seasonality

“Stop Smoking” resolutions and campaigns focus on the last week or so of the year, and the first few weeks of the year. Outside that period, the search volume is much, much smaller. Consider whether you have something similar (“Thanksgiving meals”, “turkey dinners”?).

Adverts Released From Editorial Review

If you have recently started your account, or you have recently changed advertisements, you will have triggered “Editorial Reviews”. Your adverts will not run, or will only run slowly while they are under review. When the review is satisfactorily completed, your adverts will be released for full running. This can result in a factor of ten increase in daily spend, or even more under some conditions

Click Fraud

You might sometimes see otherwise unexplained increases in impressions and clicks. This does not mean that you have click fraud. It may be as simple as a local news item triggering searches, that you aren’t aware of.

Theft

If you think you’ve turned off advertising, but suddenly start seeing bills, or if you see marked increases but can’t identify the causes, you may be suffering from theft – or you simply don’t know where to look to see the spending. We have some articles covering “where’s my spending going?”. Before you assume theft, just make sure that are looking at all the data!

If you find new campaigns, adgroups, adverts and keywords sending visitors to sites you don’t recognise – your account has been compromised and you should take immediate action. See the article “What Do I When I Find An AdWords Thief?”

Professional Assistance

AdWords Help Experts have access to Google help, and experience in handling and diagnosing problems. If you are uncertain or want a second opinion, or if you’d like someone else to handle the problem on your behalf, please do contact one of the experts here. Fees to investigate and accelerate results are usually in the range of ten to thirty US Dollars; setting up replacement advertising may be more expensive depending on the complexity you need. Some of us also offer services for monitoring our client accounts for problems.