Did you realize that your PPC ads don’t bring in conversions?
Your PPC ads ensure that you are brining the correct type of traffic to your landing page that your website can then convert.
As your PPC ads help to qualify the traffic and are highly measurable, you can use ad testing to help design your landing pages so that the user’s have a seamless experience between your ads and the landing page. This type of testing can also help you create a consistent offer between your ads and landing pages.
On Tuesday, November 10th at 1pm EST / 10am PST myself (Brad Geddes) and Formstack are going to do a joint webinar that examines how to improve your landing page conversion rates via Ad Testing.
While Google’s homepage hasn’t, bar for a few tidbits, changed in the last years, the behavior of online searchers has dramatically changed. When Google originally started their services in 2001 there wasn’t many websites and products to search for – at least compared to 2015.
For this reason users were happy to find a matching website or product that solves their problem.
But users have changed their ways and their expectations have changed. Users are now looking for the best match. Any they know that in many cases it isn’t always on Google. Online searchers are developing new habits counter those we have gotten used to in the past.
What does this mean for Google and us search marketers and advertisers?
Forgetting the Big Picture
Day for day one toils away doing whatever one must to increase the performance of one’s advertising, website or even internal matters like sales and production.
In some cases this is done in adherence with strategic plans laid out after careful research of the past. In other case actions are capriciously undertaken, based on the last webinar or the latest post read on inbound.org that contained some good ideas.
Either way, one can forget to kept an eye on the data of the macro environment in which ones business model resides.
Macro environment is defined as: The conditions that exist in the economy as a whole, rather than in a particular sector or region.
In this case the macro environment in question is Search Engine Marketing on Google.
(In Germany Google has an apparent market share of over 95%, at least when looking at the main engines Yahoo, Bing and a few local ones, so for us it is apparently the only relevant search engine – more to that in a bit)
And if I would reduce all the lessons of life in last 20 years into one, then it would be that:
Changes is inevitable and in many cases they are just around the corner.
Internet, Social Media, tools, technology, demographics, politics etc….. Things are in a constant rush for change, nothing stays the same for a long time.
The same can be said of markets – markets always change – nowadays more than ever.
So it makes sense to take a look at the macro data once in a while. Google Trends is a great tool for this.
(I wouldn’t swear on the accuracy of Google Trends, but for the sake of thought provocation and fun, let’s assume that it is more right than wrong)
Additionally, what the internet has come to mean so much for so many businesses, it is well worth the time.
Online Advertising Is Relevant For Most Businesses
Ok, for starters, let me regurgitate a few headlines of the latest business magazines and internet blogs and hopefully prove a point:
The past decade online marketing has grown and become for most business owners a serious topich and a high-priority on their to-do-list.
Proof: spend in online marketing has been climbing and climbing. Google, the biggest advertising company in the world, increased its yearly turnover sky high to 66 billion since 2001. Take a look at the graph.
That is of course incredible. Google is by now one of the biggest companies worldwide. In online advertising, they are by far the strongest company.
And to just to make another case in point: E-Commerce turnover in 2014 has increased to a record 304.91 billion in the US and 43,6 billion in Germany – the country I call home.
The boom in Google’s turnover and that in E-Commerce businesses doesn’t seem to be ending soon.
But that doesn’t mean that online advertisers and website owners can expect unlimited, never-ending growth.
Our income is not tied to Google’s or to any online retailers for that matter.
(I don’t want to know how many online businesses are a far cry from being successful or just vaguely profitable. )
Search Volume Growth Rate Slows Down
Interestingly, yet understandably, the growth rate of search queries is not increasing. It is still decent growth but the volume is normalizing at a high level.
This of course represents the overall numbers worldwide. And considering the increased use of bots to collect data on Google, manipulate CTRs and so on, this chart might even look very different.
Another interesting graph is the search volume for “Google” on Google according to Google Trends in the US:
Considering the growth level of Google’s turnover the numbers are somewhat surprising or even disappointing, but understandable. (Remember everything changes – even markets)
But do these overall figures apply to all markets?
No.
Search Volume Changes From Business to Business
In some markets like dentistry (US) we have a steady growth rate exceeding the average:
Search queries (US) for insurance on the other hand has been declining – does that mean insurances are being sought and bought less often? No it doesn’t. I added a complete explanation at the end of the post.
So has queries for holidays (US):
While people have been searching for smartphones (US) incredibly often:
Ipads were being searched a lot, not so much anymore:
Movie streaming is a nicely growing market:
As you can see, the figures change from market to market.
But one can safely state that the exponential growth we had is in average over.
We have a high level of traffic that is being shared by many websites. But in many cases, it isn’t growing.
This situation as defined in the product cycles is the 3rd phase, which is the Maturity stage. The full list of stages are: product introduction, growth, maturity and decline.
In this stage we have websites competing for the same valuable traffic, where sales growth rates are diminishing and the primary strategy is to defend ones market share. – Sound familiar?
The Role of Search as We Know it Will Drop in Importance
Yep that is my earnest opinion.
The days of one search engine for all types of searches are ending.
Just like any other product or advertising media for that matter (even when newspapers try to negate the laws of nature), there comes a time when other better forms of a product emerge that replace that of contemporary ones.
This always happens – it might be a better search engine or just the rise of hundreds of specialized search engines as we are already seeing with Amazon for products, or citations or review sites for local businesses.
It is only a matter of time.
To illustrate my point, let me go back to the topic of insurances and their search volume in Germany:
(For those who want to verify the figure, the German word is Versicherung)
I think you will agree, the figures are declining or at least not growing.
Now compare that to the search volume for Check24 – the market leader for comparing insurance policies in Germany:
Of course this volume isn’t solely navigational search queries from people looking for the check24 website, but it does indicate the popularity of their service within the German market. The main search query according to Google trends is: “check24 versicherung” (German for insurance).
In this case we have users who are bypassing Google as the search engine while searching for an insurance.
Users who have gotten so proficient at search that they are mastering the ability of using more than one engine.
(No Google, users don’t want one complex search engine to fit all needs. They would rather have distinct services with their own set of features)
I am sure you can think of several cases where we have this situation.
It also raises the question (which has been raised numerous times already), whether market share comparison of search engines is valid when only including the usual suspects: Google, Yahoo, Bing and the other odd few and ignoring giants like Amazon or even services as those similar to check24, who are technically also a search engine.
As an advertiser the interesting question to pose is: When does it make sense to seriously start reallocating budgets to other forms of advertising? (This is already happening in the USA, but not so much in Germany)
This point won’t come soon for most micro environments within the Google cosmos but I have seen situations where advertisers are legitimately leaving or shunning Google due to ridiculous market conditions, looking for greener pastures elsewhere.
This point will arrive where Google loses it search market clout. The question is just when and how exactly.
Or does Google have an ace up their sleeve, whereby they introduce something so revolutionary, that it redefines the market in their favor.
Search engine advertising and search engine marketing have been so good to us, that we could forget to heed the laws of markets and fail to see the overall picture.
If you’re retailer, Google Shopping is one of the most important things to get right in your paid search program. And if you’re not, it’s usually impossible to promote your products or services with Product Listing Ads (PLAs).
So for those of you who aren’t managing (or planning to manage) any Shopping campaigns: I’m afraid you might as well skip this part of the audit series. However, the next part about bid management should appeal to all advertisers and agencies, as should all previous parts you can find above 😉
And for those of you that want to know all about how to achieve success with Shopping campaigns, this post is divided in the 4 following parts:
Why use Google Shopping? Because it works, it’s growing and it keeps getting better.
How to get the most out of Shopping Campaigns? It all starts with a great product feed. Next to that, I’ll talk about campaign structure and optimization best practices.
Shopping resources and tools. Especially when it comes to Shopping, there’s nothing wrong with some external help of specialized agencies or a data feed management tool to get the best results from PLAs.
Your Audit Checklist. As with all parts of this series, the post ends with a checklist to use for your own account(s).
As Simon Sinek says: let’s start with why. Why is it that important to get the most out of Google Shopping?
It works Although you have much less control over which product will show for a specific search query, almost every Shopping campaign I’ve seen outperforms its non-branded text-based counterparts.
In the first place, it’s probably because a picture is worth a thousand words. And that’s a lot more than the 95 characters you get in a text ad.
Secondly, not only does the user see the actual products before clicking on them, prices are also shown next to each product.
So whatever product the user decides to click on, (s)he has been able to easily compare the products and prices before the click. This could make it a much more qualified click than a click on a less specific (or harder to compare) text ad.
Just take a look at the SERP below after a search for ‘juicers’:
Not only are the PLAs in the top right (they also appear in top positions above the organic results by the way) the most noticeable part of the SERP, the same advertiser can easily show multiple PLAs, as Walmart does in the example above.
If the same advertisers also has a text ad for that keyword, he has taken up even more of the coveted real estate on the SERP.
Shopping campaigns outperforming their non-branded text-based counterparts is not just my personal experience, it also clearly shows in Merkle | RKG’s Q4 2014 Digital Marketing Report, where we see the following PLA Performance vs Text Ads:
The most interesting comparison is for non-branded performance, as PLAs mostly show for non-branded queries (unless you’re a manufacturer). Looking at the yellow charts above we see the following differences:
PLAs had a 5% higher non-branded CPC
PLAs had a 130% higher non-branded CTR
PLAs had a 9% higher non-branded ROI
PLAs had a 30% higher non-branded Conversion Rate
PLAs had a 12% lower non-branded Average Order Value
Obviously, your PLA performance may vary, but it’s rather exceptional to see PLAs perform worse than non-branded text ads for the same advertiser.
If that’s your case, and you followed all the advice below, the most common reason for underperforming PLAs is when an advertiser isn’t competitively priced while the consumers are very price-sensitive.
In those situations it’s hard to make Product Listing Ads work, as a user can directly compare prices on the SERP.
Both show almost identical growth rates when it comes to ad spend on PLAs: 45%-47% YoY growth in Q4 2014.
So what does that mean for the percentage of clicks coming from PLAs for retailers?
According to Adobe, Google Shopping produced 20% of all retailer paid search clicks and for the clients of Merkle | RKG it was even higher: 30% (Google paid search clicks only).
Let me bombard you with stats once more, but possibly the most interesting one. Below you’ll find the PLA share of non-brand Google paid search clicks, per industry, also from the Merkle | RKG report:
As you can see, PLAs produce between 31% to 71% of non-branded paid search clicks for retailers, depending on the industry.
These are impressive numbers and we can only expect the importance of Shopping campaigns to grow.
If you see lower click shares coming from PLAs in your account, there may be interesting opportunities to get more of these profitable clicks by following the advice in the rest of this post.
For advertisers outside the US it’s important to note these are mostly US based numbers, so it could be lower for countries where Google Shopping is less evolved.
It keeps getting better
Since their introduction as a beta in the US in 2009, PLAs have come a long way. Just take a look at the most important updates in the table below (click for a larger, more legible version) and you’ll quickly come to the conclusion that Google is committed to make Shopping campaigns an even bigger success. In 2014 they almost averaged 1 big Shopping improvement or expansion a month.
So now that it’s clear that it works and that it’s growing and improving all the time, it’s time to go into best practices to help you achieve the best possible results from your Product Listing Ads.
How to get started with Google Shopping?
Just in case you don’t have PLAs running yet and you’d like to get started, this is what you need:
Advertise in one of the countries that show PLAs, you’ll find the most recent list of countries on the official support page.
By the way, be sure to read all parts of this official support page if you’re new to Shopping campaigns. Or even better: read the 4 modules of the Shopping Advertising exam study guide. To get the most out of your PLAs, you really need to know exactly how things like product groups, campaign priorities and custom labels work and how to navigate within your Merchant Center and Shopping campaigns.
Sell products that are eligible for Google shopping, which is almost anything you can put in a box and send to a customer, except restricted products.
Set up a Shopping campaign in your AdWords account (after all of the above are in place). Also more about campaign structure and bidding best practices later in this post.
How to get the best results from Shopping Campaigns?
It all starts with a great product feed
Your product feed is the most important factor when it comes to success on Google Shopping. As Google likes to say: your feed should be as fresh, accurate and comprehensive as possible. This is what they call high-quality product data.
As you’ll see below, there are certain attributes of the feed you’ll like to optimize regularly, based on search behavior, just as you would optimize your website for SEO purposes.
So it’s best if the person or team running your Google Shopping campaigns can also make changes to the feed, or can at least suggest changes that will be implemented by someone who manages the feed.
Below, I’ll go deeper into detail about best practices and requirements for the most important feed attributes.
But first, be sure to have these 2 links in your bookmarks to refer to whenever you’re improving the feed, so you’re always using the most recent feed specification:
Below you’ll find the “big three” that highly influence your visibility and CTR (next to price): title, description and image.
These are the ones you’ll want to keep optimizing for better results. Hopefully, the recommended size, do’s and don’ts below will help you do just that.
This also means you should regularly analyze the search terms report within your Shopping campaigns to guide your product feed improvements and to find negative keywords.
1) Title:
Recommended size: your title can be up to 150 characters, but it will get truncated after 25-30 characters on the SERP and after 70 characters on google.com/shopping. So front-load your titles with the most important words.
Do’s: keyword-rich; clearly describe the product; include the brand (even if it’s already in the brand column); include the category (even if it also has separate columns); make it match with the product title on the landing page; use simple color names, which means converting too specific color names to one of these 11 colors, possibly adding ‘light’ or ‘dark’ before them (if applicable): black, blue, brown, gray, green, orange, pink, purple, red, white and yellow.
Don’ts: keyword stuffing; your brand name (unless you’re a manufacturer); all capitals; exclamation points; promotional text (e.g. “Free Shipping”); use of words with low search volume (e.g. SKU numbers, too specific color names).
2) Description:
Recommended size: your description can be up to 5,000 characters, but Google recommends to keep it between 500 and 1,000 characters (and 500 should be more than enough). The description only shows on google.com/shopping and gets truncated after 170 characters. So make sure the most important words are in the first 170 characters of your description.
Do’s & Don’ts: same as for title, but you have the room to use full sentences in the description. The best way would be to treat it as a very long search ad. This means using relevant keywords, mentioning features, benefits, USP’s, call-to-actions, etc. Furthermore, the following information should not be in your description according to Google:
Links to your store or other websites
Billing, payment, or sales information
References to internal categorization systems, e.g. “Toys & Games > Toys > Baby Dolls”
Comparisons to other products beyond the item you’re selling, e.g. “even better/faster/larger than X”
Details about other products, accessories, or similar items available
3) Image_link:
Recommended size: the link itself can be up to 2,000 characters. The image should be the largest, highest resolution, full-size image you have for the product, but no larger than 4 MB or 64 megapixels. Google recommends at least 800 x 800 pixels. Minimum size is 250 x 250 pixels for apparel and 32 x 32 pixels for other industries.
Do’s: high quality images that differentiate you from the competition; show the product clearly (white background is usually best); test different product angles.
Don’ts: low resolution images; watermarks; logos; odd backgrounds; multiple products in 1 image; stock photos everyone is using; cluttered images.
To get an idea of how you’re currently doing when it comes to the attractiveness of your titles, prices and images and of the optimization of your feed in general, you can compare your CTR to the benchmark CTR and monitor your Impression Share in the Product groups tab of your Shopping campaigns.
But first, make sure your budget and bids are high enough to ensure a decent Impression Share.
Required and recommended attributes to increase data quality
The attributes below don’t need to be optimized continuously, but need to be as complete and accurate as possible.
ID: your internal and unique ID for each product, max of 50 characters.
Link: the landing page of the product, its content should obviously match with other attributes like title, description, price, availability and image_link.
Condition: new, used or refurbished.
Availability: in stock, out of stock or preorder.
Price: the actual price obviously. Being competitively priced is even more important within Product Listing Ads, as users can compare prices directly on the search results page.
Brand: simply enter the brand name of the product. For some brands it’s best to use the most used version of the brand (e.g. ‘Tommy Hilfiger’ instead of ‘Hilfiger Denim’)
GTIN or MPN: the corresponding unique product identifier of the product like a UPC, EAN, JAN, ISBN or MPN number. Submit the ‘identifier_exists’ attribute with a value of FALSE if your product doesn’t have a GTIN or MPN (e.g. for custom-made products).
For apparel products: gender, age group, color, size, material, pattern, etc. are recommended attributes to add for apparel products. If you sell apparel, be sure to read the Submit apparel products guide by Google.
Attributes to customize AdWords organization & bidding:
When you create product groups in AdWords to bid on, most of the feed attributes you can use are more or less fixed: Item ID, Brand, Category (based on the Google product taxonomy) and Condition.
However, if you want to have more freedom in how you organize and create your product groups (and with that, how you differentiate your bids), you can use one (or both) of the attributes below to do so:
Product_type: this is your category of the item, so you can provide your own classification next to Google’s (which is fixed and according to their product taxonomy).
Be sure to provide full strings separated by “ > “, e.g.: Home & Garden > Kitchen & Dining > Appliances > Refrigerators
Custom_label_0 through Custom_label_4: Use up to 5 custom labels for extra categories such as best sellers, seasonal products, promotions or for margins.
For inspiration, see the examples below from the official support page (“How to use custom labels”):
Next to having a great product feed, don’t forget to:
Start with using test data feeds to check your data feed for errors first. Once you are happy with the feed processing results, you can upload the same file as a normal feed.
Upload your feed regularly in Merchant Center. At least once every 30 days, but daily would be better (and more often if needed).
Make sure to regularly check in Merchant Center for possible errors and missing attributes. You’ll find such updates and warnings in the Diagnostics and Feeds tab of Merchant Center.
After reading more than a 1,000 words about product feeds, it’s time to reward you with an example merchant center feed (Google spreadsheet) that should clarify and summarize all mentioned attributes and best practices above. Enjoy and feel free to share!
Campaign Structure & Optimization
Organizing and optimizing your Shopping campaigns is totally different from regular keyword-based search campaigns. As mentioned before, you really need to know exactly how product groups, bids and campaign priorities work to fully understand the different organizational strategies.
And as often in PPC, there’s not just 1 right way to organize your Shopping campaigns.
However, if you know beforehand which attribute(s) of your feed will mostly determine the bids you’ll set at the product group level, the table below can help you with your first organizational choices:
Next to the basic choices above (that don’t include the cool things you can do with campaign priorities) there are quite some other things to consider when organizing and optimizing Shopping campaigns:
There seems to be a 10,000 product limit per campaign in AdWords (although you won’t receive any warnings). So if you have more than 10,000 products in your Merchant Center feed, it’s probably best to organize your campaigns in such a way that each campaign targets no more than 10,000 products.
The order in which you choose your initial product groups is important, so draw out your structure before creating product groups. Since every product group is a subset of the former group, it’s hard to reverse your initial choices.
Use ad groups if you want different negatives, different mobile bid adjustments or different promotional messages for different product groups, as these are set at the ad group level.
Realize users only see your promotional message when they hover over your product image and that they apply to all products in your ad group. So as Google says: “These messages shouldn’t be used as ad text, but rather as actionable alerts that differentiate you from the competition.”
Next to the Product groups tab, don’t forget to regularly use the Dimensions tab in your Shopping campaign to view performance data by all available dimensions and product attributes, even down to the individual item:
Be careful not to blindly raise your max. CPC to the Benchmark max. CPC. Before increasing bids for better results, make sure your product feed and structure are as good as they can be and that your daily budget is high enough. If you still miss a lot of Impression Share or if your product groups perform great and you want more volume, then increase your bids cautiously.
Note: during peak seasons, you may want to quickly and aggressively increase bids for maximum exposure.
As mentioned before, regular analysis of the search terms report is essential. On the one hand to guide the optimization of the titles and descriptions in your feed, on the other hand for query mining, both negative and positive:
Add negative keywords for queries that are irrelevant and/or significantly underperforming.
If you see high-volume queries that perform well, make sure they’re also active in a regular search campaign. If not, add these as new keywords to see if you can get even more clicks from these queries by adding a text ad on the SERP.
Use all the ‘extra’s’ that are available in your country, such as:
Dynamic Remarketing: as a retailer with a product feed in Merchant Center, it’s very easy to retarget your site visitors on the Google Display Network with ads that automatically contain the products they viewed on your website.
RLSA: ask your Google rep if you don’t see the ‘Audiences’ tab in your Shopping campaign to enable this, as you’ll want to be able to bid differently (usually higher) for users that already visited your website.
Merchant Promotions: currently available in the US, UK, Germany, France, Australia and India.
Product Ratings: currently available in the US, UK, Germany and France.
Local Inventory Ads (if you have local stores): currently available in the US, UK, Germany, France, Australia and Japan.
Google Trusted Stores: currently available in the US, UK, Germany, France, Australia and Japan.
Advanced Shopping campaign structures
Most advertisers start to organize their Product groups based on category or brand and have just 1 Shopping campaign for all their products. And often, that’s fine.
But if you have a lot of products, sales or other factors that influence performance, you’ll want to get more advanced in your organization and bidding by using the campaign priorities setting.
In this video (just a little over 4 minutes): How to Best Structure your Google Shopping Campaigns by Merkle | RKG you get a great and quick overview of 3 campaign organization strategies and the advantages of using this Shopping campaign structure (using priorities):
A very interesting variation on the structure above that you should definitely check out is Taking Google Shopping to the Next Level by Martin Roettgerding.
In a 27 minute video (scroll down to see it), Martin shows you how to use campaign priorities to be able to bid the highest on the most specific queries and lowest on the most generic queries, even if all these queries match the same product.
And an example of the outcome of this campaign structure looks like this:
Agencies, Data Feed Management Services & Tools:
You may not have all the (optimal) resources or technology for managing product feeds and/or Shopping campaigns.
As these are essential to retailer success with PPC, you can reach out to one or more of the approved Google Shopping Partners to help you with this. Shopping Partners consist of specialized agencies as well as feed management services.
If you want more choice in tools for product feed management (besides Google Shopping Partners) you could also search for ‘product data feed management’ and check the organic search results. A safe choice would be Google’s own Channel Intelligence (acquired in 2013), as they’re obviously specialized in feeds for Google Shopping, but also many other Shopping Engines.
When it comes to tools for more efficient management within AdWords, the Optmyzr Shopping Campaign Tools could save you quite some time. Check out the demo videos on the Optmyzr website to get an idea how these work.
Just as your product feeds should be, I tried to be as fresh, accurate and comprehensive in this very long post about Shopping campaigns.
However, if you have any comments, questions, suggestions or experiences you’d like to share, please leave a comment below!
Google Shopping Campaigns: Your Audit Checklist
Merchant Center – Product feed:
Is your feed fresh and does it contain all products you want to advertise for, i.e. does it match with the contents on your website (prices & availability especially)? Are all the required and recommended feed attributes as accurate and comprehensive as they can be, based on Google’s feed specifications? Are the titles and descriptions of your feed user-friendly and do they match search behavior? Regular query mining should guide your feed improvements. Do you use and test the highest possible quality product images that distinguish you from the competition? Do you use the product_type and custom_label attributes to be able to bid based on your own categorization? Do you upload your feed as often as you should, given changing prices and availability? At least once every 30 days is required, daily is usually recommended. Do you regularly check the Diagnostics and Feeds tab in Merchant Center for warnings, errors and missing attributes?
AdWords – Structure, optimization and bidding:
Do you make sure each Shopping campaign targets no more than 10,000 products? Does your structure focus on product lines, profit margins and best sellers? In case you have seasonal items and/or flash sales: do you promote these with separate campaigns, using different campaign priorities? Do you take full control of ad serving with all 3 campaign priorities (Low, Medium and High)? Do you run search query reports to find negatives to exclude irrelevant or poor performing queries? Do you run search query reports to find new keywords for your regular (text-based) search campaigns? Do you use the Benchmark (CTR & CPC) and Impression Share insights to guide your optimizations? Do you use the insights from the Dimensions tab to guide your optimizations? Do you use separate ad groups whenever you want to have different negatives, mobile bid adjustments and/or promotional messages for your product groups? Do you use all additional Shopping (related) options that are available in your country, such as Dynamic Remarketing, RLSA, Merchant Promotions, Product Ratings, Local Inventory Ads and Google Trusted Stores?
This is a guest post by Wijnand Meijer, Quality & Learning Manager at iProspect Netherlands, an online media agency based in Amsterdam. He created his first AdWords campaigns in 2006 and is currently helping advertisers and coworkers alike to get their Paid Search to the next level.
Opinions expressed in the article are those of the guest author and not necessarily bgTheory. If you would like to write for Certified Knowledge, please let us know
Many marketers must submit all their ads to a legal and/or corporate branding team for approval before they are allowed to use them in a PPC account. These departments can often be bottlenecks to ad testing.
If you aren’t working well with legal and/or branding; then these departments can quickly become an excuse for why you aren’t testing ads appropriately and why the account is not growing as anticipated.
In this article, we’ll explain how to work with legal and branding so that they can help you in your ad testing process and not be a hindrance.
Explain Why Ad Testing is Important
The first step is sitting down with the departments and explaining why ad testing is so important. Proper ad testing can result in:
Higher quality scores
Lower CPCs
Higher positions at the same cost
More traffic
Lower cost per actions
Higher ROAS
More conversions
More revenue
You must explain to them why ad testing is both important to your job, but also crucial for the company as a whole.
Ask for a Time Commitment
Once the department understands why you must test ads; explain to them why you need their approval or feedback. Make them seem included in the ad testing process, not just a checklist item that you are forced to endure. The more a person feels special and included in the process, as opposed to just being a barrier or paper pusher, the more involved they will be in the process.
Once the person or department understands why you need their help to make the company grow and become more profitable online, then ask for a time commitment.
Try to schedule a time every single week where the department can approve ads and give you feedback. In some cases, you might only be granted monthly hours, but if you can get a weekly time slot it will make your ad testing more consistent.
Regardless of when the review process occurs, agree on a recurring period of time where they will approve ads and give you feedback.
At first, you might have to follow-up constantly to get them to stick to this time commitment. However, being organized and pushing for ad approval and feedback based upon their agreed upon schedule, will help in the long run as they get into the routine of approving ads and sending you feedback.
Determine the Best Ad Format to Send them Data
Before you go to the meeting, print out ads in a few methods:
AdWords editor import: With this printout, you will have an Excel sheet that lists the headline, d1, d2, display, and destination URL, department approval status, and notes by column.
This format is easier for you to deal with since you can just upload the data once it’s approved. However, a lot of non-PPC people find this a difficult format to work with.
Excel/Word Doc format: In this format, you will have the ad in one column as it will appear in a search result. Then another column for approval status and notes.
This format is easier for a lot of non-PPC people to read as they can see all the lines at once. However, you will have to do a bit more work putting the ads in this format; and once the ads are approved, you’ll have to put it into another format to upload to your account.
Note: You could also put this into a shared drive, Google Docs, Microsoft Office Online, etc format so that you can just send them a link to an online document they can read and edit.
Note: Your company might have some specific checklists or feedback requirements for ad approval. If so, add those to the sheet ahead of time so you can show you do understand the entire process and are trying to make life easier for them.
It’s ok to elicit feedback on the forms. Your goal is to make this as easy as possible for the department.
Ask them which format they prefer. While this might take you a bit more time, it will ensure that the department can work easier with your data and approve more ads within the same time commitment.
Making ad approval easy for legal and branding will help ensure that they realize you are trying to work with them and the easier it is for them, and the more ads you will get reviewed by the departments.
How Many Ads They Can Approve in a Time Frame
Once you have agreed on a format, ask them how long it will take them to approve ads in that format. Bringing a few printouts of varying numbers of ads to the meeting can help them see how many ads you really do need to get approved.
Your goal here is to get a sense of how many ads you need to create in a timeframe so that you can build up a queue of approved ads for testing. Even if you only need ten new ads a week; if they can approve 100, take advantage of that time to get more done than necessary.
What you don’t want to do is have them agree to an hour a week and then send them only 10 minutes of work per week as you’ll start setting an expectation that it only takes them 10 minutes. When you then send them an hour of work, it might take longer than usual to get responses from the departments.
Ask for Approval for Both Ads & Individual Lines
Often in ad testing, you might test multiple calls to action for the same headline and description line 1. In these cases, you really do not need the full ad approved; you need just a line approved.
Explain the difference to the department to see if you can get some globally approved lines that you can use at will.
Now, a lot of legal departments won’t do this as they want to see the entire message and how the lines interact with each other before they will sign off on the ad approval. However, if you are going to do multi-ad group testing; then you will want both full ads and individual lines approved.
Notes for Rejected Ads
No matter how much you try to write ads that will always be approved, some will be rejected. The trick with rejected ads is to have a feedback loop as to why it was rejected. In some cases, it might be something as simple as an unsubstantiated absolute or a number in an ad. In other cases, it’s the combination of lines together that will cause the rejection.
Ensure that your ad review document has a place for notes on rejected ads. Many departments have a tendency to just reject ads without telling you why. This does not help out anyone. Explain to them that if you know why an ad is rejected, then you can create copywriter guidelines so that future ads will fall into the guidelines and that everyone will be more efficient in their work.
Now, you will have some ads rejected that are confusing to you as to why. In these cases, feel free to ask for an explanation. In some instances, you might even build in an appeals process for ads that you don’t think should have been rejected and you can explain why you think the ad is OK for approval.
This rejected ad feedback loop is crucial to improving your long term relationship with the department. When you create new ads, you do not want to have future ads rejected for using some line or claim that was previously rejected. If the department feels that you are ignoring their information, they will stop sending it to you. So while you can fight a little bit for certain rejected ads, in the end, legal and branding have more authority over your PPC message than you do.
Discuss Promotional Schedules
In some cases, your company will run promotions. These might be holidays, peak periods, or other marketing campaigns. Often, when big promotions are coming up, you need more ads approved than usual.
If you are mostly dealing with the branding department, then there is usually a big discussion on the promotion with the other channel teams. Make sure you are in this meeting so you can understand the promotion, the message, and the media to be used. In that meeting, discuss the ads you will need to get approved. The branding department might just give you a few lines to use for your current ads to match the message or you might need to create all the new ads for branding approval. As the promotion has a deadline (usually 1-3 weeks before the promotion goes live), agree on a date where you will give them all the new ads so they can approve them all with enough time for you to upload them all and make them active.
If you are dealing with legal, then you need to discuss promotional challenges with them. Explain why promotions are so important; and ask them if, before these big promotions, they can schedule more ad approval time than usual to make sure all your new ads will meet their approval. This is also another time to bring up individual ad line approval as they might just need to approve 2-3 lines to use in your current approved ads instead of them reviewing hundreds or thousands of new ads.
What To Do with All the Approved Ads
If everything lines up correctly, you will have more ads approved than you need to run at any one time.
In these cases, using features like draft ads will help considerably. With draft ads you can:
Write ads in advance and put them in a queue
Set conditions for when loser ads are automatically paused and the draft ad goes live
This will ensure that all the approved ads are in the system and that they will be used and tested.
If you can get individual lines approved, then you will often want to use Multi-Ad Group testing techniques to see which lines perform best for you across a large variety of ads.
When you regularly test ads, your account will improve. However, branding and legal departments are often considered barriers to proper ad testing. If you create a review process and feedback loop with the departments, they don’t have to be a barrier for ad testing and can often help you create an ad testing schedule so that your account continues to improve and grow its profits.
If you have multiple ads in an ad group; your ad rotation settings will determine how often each ad is displayed. Based upon how you are testing and your favorite metrics, you should consider the rotation setting you are using and how that affects your ability to receive statistical significance data to make testing decisions.
The Ad Rotation Settings
There are four ad rotation settings:
Optimize for clicks: the ad with the highest CTR should be displayed the most often
Optimize for conversions: the ad with the highest conversion rate should be displayed the most often
Rotate evenly, then optimize: the ads should have roughly equal impressions for 90 days, then the highest CTR ad will be displayed the most often
Rotate indefinitely: the ads should have roughly equal impressions
Ad Served Percentage
The ad served percentage shows you how often each ad was served across your account, campaign, or ad group.
When examining this data; it is important to keep in mind the time frame you are examining. If you have paused or deleted ads that were active during the timeframe you are examining, then your ad served percentages may not add up to 100% unless you show those ads.
In addition, it is useful to only examine the data when all the ads were running at the same time. If you create an ad one month ago; but you are looking at the last three months of data; of course it will look like the newer ad doesn’t have the appropriate ad served percentage; and it can’t as it wasn’t active for two of the three months you are examining.
Improper Ad Rotation
When you use any ad rotation setting except for ‘Rotate….’ (such as ‘Optimize for CTR’ or ‘Optimize for conversions’), sometimes AdWords makes decisions too quickly about which ad is likely to be a winner.
For instance, if the campaign had the ad rotation setting set to ‘Optimize for conversions’ and we examine a time frame where all the ads were active, we would expect to see that the highest ad percentage served would be the ad with the highest conversion rate.
Unfortunately, that is not always true. Sometimes AdWords makes decisions too quickly and the wrong ad has the highest ad served percentage. For example, the below campaign was set to ‘Optimize for conversions’. Ad two is the highest converting ad and has the highest click through rate; so by any ad rotation standards the second ad should have the highest percentage served. However, it does not.
This does not happen all the time by any means; however, it does happen. When your ads are served improperly, it affects your account’s goals and your ability to reach the minimum viable data in determining the true statistically significant winners.
How Ad Rotation Affects Minimum Viable Data
Any ad test should have a minimum amount of viable data, such as a minimum amount of time, clicks, impressions, and conversions. These may vary depending on the type of metrics you are using for ad testing and the type of keywords you are testing (such as brand vs product).
When your ad served percentages are skewed towards a single ad, then the other ads receive less impressions. Since they have less impressions, these other ads also receive less clicks and conversions. Since these ads are receiving less data, it takes longer for those ads to build up enough minimum viable data to make statistically significant decisions.
Use Rotate Indefinitely for Ad Testing
For most serious ad testers, you should be using ‘Rotate indefinitely’ as your ad rotation setting. This will ensure that your ads are equally served and that all the ads build up the minimum viable information to make ad testing decisions.
Even if you only care about conversion rate (and if you are in lead generation; there are probably better lead gen ad testing metrics) and think that using ‘Optimize for conversions’ is the best option; that is only true if you meet two conditions:
AdWords actually serves your highest conversion rate ad the most
You are removing losers as you have the data
This second point is an important one; take the metrics from this ad group that was not well looked after.
Ad
% Served
Conversion Rate
Conversions
1
56%
9.0%
504
2
14%
8.3%
116
3
10%
7.2%
72
4
8%
6.1%
49
5
6%
3.2%
20
6
5%
1.1%
6
7
1%
0.9%
1
Total
100%
768
If ad 1 (with the highest conversion rate) had been served 100% of the time; then the ad group would have had 900 conversions instead of 768. As you should always be ad testing; there will be some opportunity cost when you test an ad that turns out to be a loser.
However, unless you are willing to test ads, you’ll never get better. Moreover, if your competition is diligent about testing, you’ll get worse by clinging to your old ads as they start to beat you.
Conclusion
To be a good ad tester, you should use ‘Rotate indefinitely’ as your ad rotation setting to ensure that all your ads are equally served. Then you need to be diligent about removing losers and creating more ads.
While this can be a lot of manual work, with good ad testing software, it can be very easy to find winner and losers and continuously test your ads so that your account keeps getting better and beats your competition.
There are many metrics you can test by; however, the best testing metrics for determining success vary by industry.
Often the lead generation industry is lumped together as a type of advertising campaign: just get me leads. It should not be classified this way. Within lead generation marketing campaigns, there are four main subsets of lead generation goals.
For the purposes of this article we will use CPA (Cost per acquisition) as the acronym. If you use CPL (cost per lead) internally, this would be the exact same metric.
The Types of Lead Generation Campaigns
I want the most leads regardless of incremental costs
These campaigns are commonly seen in long sales cycle, very high costs items, in the business to business world. There’s often little search volume; so all the competitors are fighting over the few leads that do exist.
There are exceptions where someone is just trying to lock-up the market or make a land grab where someone might overpay for leads for a while; but in reality, these campaigns are usually in high priced industries.
I want the most leads under a specific average CPA
In these campaigns, the blended CPA is what matters. It is OK if some leads are over the average and others are below it. However, the blended CPA needs to be within a specific target.
This is common in variable priced industries. You might have some leads that are worth $1,000 and others that are worth $10. It is usually difficult to determine any one keyword or ads value as the high value leads are often random and not predictable.
You might see this type of advertising goal in the ecommerce industry. For instance, I work with one ecommerce company that has some sales at $5,000 and others at $100. There’s no predictable way of knowing what ad or keyword will bring in the high priced sale – it’s completely random. Therefore, they work from an average CPA basis per sale instead of an ROAS basis.
I want the most leads possible, but no lead should be over $Y
For this marketing type, you work from a max CPA instead of a blended average. This is common when you are doing lead generation for other companies and then selling the leads. For instance, if you get a lead and then sell it to 4 others for $15 each, your breakeven CPA is $60. As you’d like to maintain margins, you don’t want any lead to ever cost more than $45, so you keep $15 per lead.
In this industry, if you get a lead that costs you $75 and you can only sell them for $60; you lose money on that lead. Since these are fixed costs, you have a max amount you want to pay for any one lead.
I want Y leads a month at the cheapest CPA
It is common for small businesses to not be able to scale properly. They don’t want the most leads if they can’t call them all back; therefore, they usually have a cap on how many leads they want a month.
The goal might be 150 leads a month at the cheapest CPA possible. In addition, these might have a cap such as get me up to 150 leads but don’t break $40 as an average CPA.
The Lead Generation Testing Metrics
There are several metrics that you can use for lead generation. Let’s first examine the metrics and then see which metrics best fit each lead gen effort.
CTR: Click through rate: Just because an ad has a great CTR does not mean it’s converting. This metric is not a good one to use for lead generation as it does not take conversions and cost into account. What this metric is good for is getting the most traffic regardless of how it converts.
CR: Conversion Rate: The conversion rate is a ratio between conversions and clicks. This metric does not take cost or volume (CTR) into account. What this metric is good for is ensuring that of the clicks you do get, you can tell what ad is most likely to get a conversion from those clicks.
CPA: Cost per action: This is your actual cost per action. CPA does not take into account volume (CPA) or the ratio of clicks to leads (Conversion Rate). This metric is good for ensuring that your leads do not break a certain cost.
CPI: Conversion per Impression: Conversion per Impression takes into account volume (CTR) and conversion rate. This is a great metric for determining which ad will result in the most conversions possible. However, this metric does not take into account cost.
Testing by More Than One Metric
You do not have to use only one metric to choose winners. You might want to only choose winning ads based upon an ad winning multiple metrics. Now, what you might find in some cases is that one ad will win by one metric and another by another metric. In these cases, you can pick an ad by your top metric, and then create a new ad looking to find one that will be a winner in multiple metrics.
For example, in this ad test one ad has the lowest CPA and another ad has the highest conversion per impression:
Therefore, if you wanted the most leads regardless of cost, the second ad with the highest Conv. Impression (CPI) would be your winner.
If you had an absolute lead cost; such as £7; then the first ad would be your winner since the second ad is above your lead cost; however, your target lead cost was £15; then the second ad would be your winner as it will provide the most leads and it is below your lead cost.
In some marketing campaigns, you will only use one metric to determine winners. In others you will use more than one metric. Therefore, let’s examine which are the best lead generation testing metric for each type of lead gen campaign.
The Best Metrics by Lead Generation Type
I want the most leads regardless of incremental costs
In this lead generation type; the goal is absolute leads regardless of cost. Therefore, you can use a single metric Conversion per Impression to determine your ad winners. As this metric takes into account volume (CTR) and conversion rate (CR) it will be your testing metric of choice.
In this case, ad 2 in the winner as it has the best CPI even though it is not the CPA (Cost/Converted click) winner.
I want the most leads under a specific average CPA
These campaigns care about volume and average CPA. Therefore, we will want to use two metrics to determine winners: CPI (volume) and CPA (cost). When you find an ad that is a winner in both metrics, then you have found a great winning ad. However, you have possible combinations. Because CPI speaks to volume and the goal is the most leads (within a cost); we’re going to pick ads based upon the winning CPI ad (and the other ad/s will be the CPI losers).
CPI winner. CPA winner. Fantastic, this is your best ad. Feel free to test against it; but you have a top notch ad.
CPI winner. CPA loser; but the CPA is below your average. In this case, your top CPI ad is your winner as it has the most leads below your lead cost.
CPI winner. CPA loser and CPA is above your average. The other ad has a CPA below your target.
In this case, the ad below your target CPA will be your winner as ultimately you will be judged on how much a lead costs.
CPI winner. CPA loser. All ads are above your target CPA.
In this case, you have a choice: what matters more – cost or volume?
If its cost, you will pick the lowest CPA ad, examine why the other ad did better on a CPI basis, and then create a new ad to test
If its volume, you will pick the highest CPI ad, examine why the other ad prequalified people better (common for lower CPA), and create a new ad to test
In this case, there is a winner by CPI (conv. / impr) and CPA (Cost/Converted click) and thus that is a clear winning ad for this lead gen type.
I want the most leads possible, but no lead should be over $Y
The management of this type of account (as most should be) should start at the keyword and search query level to make sure you are only using keywords that are under your target CPA. From an ad testing standpoint, we should use cost (CPA) as a primary metric since the main goal is not to break a certain CPA and then use volume (CPI) as the secondary indicator. Since CPA is the prime metric, we will examine the ads based upon the CPA winner (and the other ad/s will be the CPA Losers).
CPA winner (and CPA below your target). CPI winner. This is your winning ad. Feel free to test new variations; but this is a clean win.
CPA winner (and CPA is above target). CPI winner. This is your winning ad since it’s the lowest CPA with the best CPI; but since the CPA target is above your goal, you will need to be aggressive about testing new ads.
CPA winner. CPI loser. In this case, we need to establish what you care more about: the most leads or the lowest lead cost
Lowest lead cost: In this case, you will take the CPA winner/CPI loser ad as that will be the lowest lead cost. Examine the CPI winner, pause it, and create a new ad to see if you can find a combination CPI/CPA winner.
Most Leads: CPI winner has a CPA below your max CPA.
In this case, your CPI winner will be the winning ad and not your lowest CPA ad as you want the most leads and both ads are below the target CPA. Again, examine the losing ad, pause it, and write a new ad that can become a CPA & CPI winner.
Most leads: CPI winner has a CPA above your max CPA.
In this case, your CPA winner will be your winning ad since your top CPI ad breaks the primary marketing goal of an absolute max CPA. As usual, examine loser, pause winner, create new ad.
If our target CPA was £10 and our goal was the most leads; then the 2nd ad would be our winner as it has the higher CPI (conv. impr) and is still below the target cost.
If our target CPA was £9; then the first ad would be the winner as the 2nd is is below our lead cost.
If our target was £10 but we cared more about cost than total leads; then again the first ad would be our winner as it has the lowest CPA.
I want Y leads a month at the cheapest CPA
For this campaign, your primary goal is a set number of leads each month. While the account states you want them at the cheapest CPA; there is usually a max CPA cap as well; however, the main goal is cheap CPAs hitting a specific conversion target. Therefore, your top metrics will be CPA (you want the cheapest leads) and conversion rate (making sure the clicks you do get actually convert).
While CPI could be substituted for conversion rate to find the most volume (up to the point where you can pause the account as you hit your goal) at the cheapest CPA, these accounts are usually small businesses with few clicks, so it usually takes a long time to get CPI confidence; and therefore, it’s usually easier to use conversion rate as the secondary metric. If you have a high number of target leads, then you can substitute CPI for CR (conversion rate) in this evaluation.
In addition, your traffic is split between two or more ads. So when you examine the timeframe (say previous month) you would multiply the number of conversions by the number of ads in an ad group and then take into account the percentage of the month being used to examine the data to get extrapolated conversions. This would show you what would have happened if only the winning ad were running.
For example, if your goal is 100 leads a month and you have three ads in the ad group and you examine a week of data. Then you would take the number of leads that ad received (let’s just say 10 for example purposes) x 3 (number of ads in the ad group since the ad was sharing impressions) x 4 (4 weeks in a month, you only ran the ad 1/4 of the time, you could also divide this by the percentage of time; such as 25%). That means that our extrapolated conversions for the ad would be: 10 (conversion) * 3 (ads) * 4 (weeks) = 120. That means if our winning ad was the only one in the ad group; the ad group would have hit the max conversions.
Now as there is usually more than one ad group in a campaign, odds are that you can’t do this across all ad groups easily. Hence by just using CPA and conversion rate we can usually arrive at the same results for the small amount of data the ad groups usually have.
CPA winner. Conversion rate winner. Fantastic, this is your winning ad. Feel free to test, but you have an absolute winner.
CPA winner. Conversion rate loser.
In these cases, you need to look at the overall account. Are you close to your target leads?
If yes, your CPA winner is likely to be your winner since a few more leads per month, even at a low CPA might push you over the edge for your account lead goals
If no, if your conversion rate winner’s CPA is somewhat close to the losing CPA (so you aren’t going to suddenly spike your CPA)?
If the CPAs aren’t too far apart then your highest converting ad will be your winner since you need more leads
If the CPAs are dramatically different, then in most cases you will pick the lowest CPA ad as picking the highest converting ad could dramatically increase your overall CPAs.
As usual, when you find losers, pause them, learn from them, and create new ads that will help you reach your goals.
In this case, ad 1 is going to be our winner as it has the highest conversion rate and the lowest CPA.
The Quality Score Wrinkle
The one issue we should cover is how quality score affects lead costs.
Google does not show any quality score information at the ad level, it is all at the keyword level. However, when examining ads, usually the higher the CTR, the higher the Quality Score for that ad and keyword combination. This can mean that if you have an ad with a much higher CTR than the other ads in the ad group; it could have a higher quality score and thus you pay less per click (or it has a higher position).
This is why you can have one ad that has a higher conversion rate than another ad, but also a higher CPA. If both ads had the exact same CPC and exact same conversion rate; their CPAs would be the same. However, if one ad has a higher quality score, and thus a lower CPC, it can have a worse conversion rate and yet a better CPA than another ad.
Ad
Quality Score
CPC
Conversion Rate
CPA
1
high
$0.75
5%
$15
2
low
$1
6%
$16.67
Therefore, even if you are not picking winning ads by CTR: it is useful to examine CTR information when creating new ads.
Easily Automate Your Ad Tests
The next time you create a lead gen account; don’t just think its yet another lead generation account – determine what type of lead gen account it is. By understanding the type of lead gen account; you can then determine how to create and manage your ad tests.
Now, determining statistical significance by all of these metrics can be a tremendous amount of work. If you are looking for a solution to automate the analysis of your metrics as well as only seeing alerts when you have winners, take a look at AdAlysis: Powerful Ad Testing made Simple.
And after that, I’d say I really need a couple of more hours for the rest of the audit.
For those unfamiliar with this exotic sounding ratio, it is named after the founders of 3Q Digital (formerly PPC Associates) Will Lin and David Rodnitzky and is a quick way to assess the efficiency of your account.
And although the ratio sounds complex, it really is quite simple (or ‘elegant’ as mathematicians would like to say).
The Lin-Rodnitzky (or L/R) ratio is calculated as following:
How to calculate your L/R Ratio in AdWords
First of all, you need conversion tracking to be working in your account to be able to calculate this ratio. See the measurement part of this series for all about tracking conversions.
Secondly, you need enough click and conversion data in your account for significant results. The official L/R white paper suggests to evaluate at least 2 weeks of conversion data, but preferably a few months. I usually find that the last 2 to 3 months is a good time range.
Once you’re sure conversion tracking is working properly for the time range you’re evaluating, follow these steps:
1. Set a date range of your choosing (somewhere between 2 weeks and 3 months) in AdWords.
2. Go to the “Keywords” tab, click on the “Details” button and select “Search Terms: All”.
3. Make sure the following columns are visible in your search terms report: “Converted Clicks” and “Cost / converted click”. If they aren’t, add them first by clicking on “Columns” -> “Customize columns”.
4. Click on the “Filter” button, then select “Create filter”.
5. From the drop-down choose “Conversions”, then select “Converted clicks”.
6. Use the greater than or equal to sign >= and enter 1 in the box. Click “Apply”.
7. Now scroll to the bottom of the page, where you’ll see something like this:
8. Now you divide the total (grey) “Cost / converted click” by the filtered (yellow) one. In the example above that would be: 4.99 / 2.91 = 1.71
What does the ratio mean?
So now you’ve calculated the L/R ratio for your account, let’s see what it actually means. In the official white paper we can find the following interpretation: “we’ve concluded that healthy accounts typically have a Lin-Rodnitzky Ratio between 1.5-2.0.
On a continuum of scores, this is what each score range generally means:
1.0-1.5: The account is too conservative. Most likely this means that the only queries getting any traffic are brand terms or the absolutely most targeted queries. This means that the account is likely missing out on a lot of incremental conversions, most of which are likely to still be highly profitable for the business.
1.5-2.0: The account is well-managed. There is a combination of consistent winners that always bring in sales and experimental queries that are being tested to identify growth opportunities.
2.0-2.5: The account is too aggressive. There are too many queries getting clicks that are not driving conversions. This is either due to excessive use of broad match, a lack of attention to the account, or a lack of rigorous analysis of metrics.
2.5+: The account is being mismanaged. Money is being wasted daily, and simple changes can save the business a lot of money.”
Note that not every account has to be in the 1.5 to 2.0 range all of the time. I’ve seen well-managed accounts with temporary L/R ratios between 2.0 and 2.5, for example right after adding many new keywords. That’s why it’s best to evaluate your ratio over a rather stable period (or only for mature campaigns).
So ratios below 1.5 or above 2.5 really mean there’s serious work to be done, but what exactly?
What to do when your Lin-Rodnitzky Ratio is too low
This means you’re hardly taking any risks. You’re probably mostly advertising on exact match keywords that are known to convert well.
While this may seem like a great idea, as stated above, you’re probably missing out on a lot of additional interesting search queries.
Besides, you’re not following the ‘always be testing’ principle in your account by trying out new keywords.
To increase your L/R ratio, you could thoughtfully:
Add keywords in phrase and/or modified broad match (that you currently only have in exact match).
What to do when your Lin-Rodnitzky Ratio is too high
This happens more often than a too low ratio. This means you need to (seriously) cut the waste in your account.
The higher your ratio is, the higher there’s a need to:
Add poor performing queries or words as negatives.
Pause the worst performing keywords.
Lower bids for keywords with a too high CPA or a too low ROAS.
Increase bids for keywords that deserve a higher bid based on their value per click and your targets.
In short: you should spend less money on queries that aren’t working and more on the ones that are. By the way, make sure you have enough data (clicks) before deciding a query isn’t working.
And obviously, you should also investigate why those queries aren’t converting. Are they simply not relevant to your business? In that case you can freely exclude them.
But if the queries are relevant but still don’t convert (enough) after a significant amount of clicks, there may be other reasons for this like your website, offering, landing pages, ads, competition, prices, etc.
In that case excluding the queries will save you money, but the real problems still need to be addressed.
The Lin-Rodnitzky Ratio: Your Audit Checklist
Is your Lin-Rodnitzky Ratio between 1.5 and 2.0?
This is a guest post by Wijnand Meijer, Quality & Learning Manager at iProspect Netherlands, an online media agency based in Amsterdam. He created his first AdWords campaigns in 2006 and is currently helping advertisers and coworkers alike to get their Paid Search to the next level.
Opinions expressed in the article are those of the guest author and not necessarily bgTheory. If you would like to write for Certified Knowledge, please let us know.
One of the greatest things in online marketing is that you can test anything that generates a click or conversion (which is about everything): keywords, bids, ads, landing pages, your checkout process, etc.
Besides, it’s actually the only way to scientifically keep improving the performance of your account and website. That’s why the most successful advertisers and websites in the world have 1 thing in common: they’re testing everything in an almost obsessive manner, running hundreds of tests each month.
Depending on the amount of traffic you have, you may not need to run hundreds of tests a month, but you need to be continuously testing, as often as you possibly can with the traffic you do have. How else will you find out what works best?
To run a test, you basically need 3 things:
The fun part: generating an idea to test. Ideas could come from anywhere: while you’re taking a shower, something in an ad or website you saw, something the HiPPO suggested or something to actually challenge the HiPPO. Wherever the idea may come from, the best response is always: “let’s test it”. In the end, whatever generates the most profit should prevail.
The work part: actually implementing the test: adding a keyword, writing a new ad, creating a new version of the landing page, etc.
The tedious part: waiting and testing for statistical significance. But luckily there are tools out there to do this work for you, which you’ll find at the bottom of this post.
So what do I mean by testing? Well, there are actually 2 types of testing you could do within an AdWords account and both never stop:
Split testing (A/B testing): running a controlled experiment with 2 or more variants (e.g. 2 ads in an ad group) where traffic is split between these variants. After a while (depending on the relative difference in performance and the amount of traffic), you’ll find that one of the variants significantly outperforms the other(s). The winner gets to stay and should be challenged by a new variant as soon as possible.
Trying out new elements, like adding new keywords, campaign types, networks, etc. This is part of the continuous search for new opportunities: some will work and some won’t, but if you don’t try it, you will never know. In this case there’s nothing to split test in the traditional sense, as you’re adding something new, but obviously you will find out if this addition is worthwhile.
In this post I’ll focus on testing within PPC. Landing page best practices (including how to test them) will be the subject of a future post in this series.
Split Testing Ads
If there’s just one element in your account you should continuously be testing, it’s your ads. They highly influence your CTR and therefore your quality score and the amount of traffic you’re getting from paid search. CTR is also the metric you’ll reach statistical significance the fastest, so you’ll quickly learn what works and what doesn’t. Applying all these learnings add up to huge improvements in your account over time.
Ads also influence conversion rate, but it will take longer to reach significance for this metric, as you’ll obviously have much less conversions than clicks. But if you do reach significance for conversion rate, you should definitely take this into account and test for the ultimate metric: profit per impression.
When testing ads, keep these best practices in mind:
Set your ad rotation settings to rotateindefinitely. This isn’t the default campaign setting, so you’ll have to change this yourself. The reason you’ll want to rotate is twofold:
You want to choose the winning ad based on your metrics and your significance requirements, not Google’s. Even if you would purely test for CTR or conversions, Google doesn’t show you the confidence levels and just starts showing the ‘best performing’ ad more and more often.
You want to be notified whenever there’s a winner. That way, you can directly pause the loser and write a new ad. Even if Google’s optimize settings would always pick the right winner for you, you won’t know it as long as you don’t go into each ad group and find out that one ad has a much higher ad-served percentage. That’s something you don’t want to spend time on anyway, and that’s where the paid tools listed below come in.
Determine the goal of your test. In most cases the purpose should be to create an ad with a higher profit per impression, without hurting quality score (too much). But maybe you have a low quality score (or don’t want to wait for significant conversion differences) and you only care about increasing CTR for the moment.
Or maybe you have too many low quality clicks and you’re willing to purposefully lower CTR by qualifying, for the sake of improving conversion rate and saving costs.
Test 2 to 4 ads (per device) simultaneously. You’ll get the fastest results when testing just 2 ads. But in high volume ad groups you could also test 3 or 4 ads at the same time. If you advertise on mobile devices and have mobile preferred ads, then you should also test 2 to 4 mobile preferred ads and consider this as a separate test.
Test one thing at a time. Whether they’re big or small changes, once the winner has been declared, you should be able to clearly pinpoint why that specific ad performed better. That’s impossible if you change multiple things at once. A simple way of testing one thing at a time is by testing 1 line of the ad copy at once and keeping the other lines the same.
Use aggregate testing. Especially for low volume ad groups, it may take forever before you reach statistical significance. And you don’t want to wait forever. A way to solve for this, is to use the same text (usually one or both description lines) in multiple ad groups and aggregate the data at these lines (or words) to see what works best.
An easy way to aggregate is to label all ads that share components, so you can analyze the performance on a label level (under the Dimensions tab). Another way is to create a Pivot Table in Excel to aggregate.
But beware: when you aggregate data, make sure the ad groups are as similar as possible. So don’t aggregate branded and non-branded, search and display, ads in high positions and ads in low positions, etc.
If you do this, you can run into Simpson’s Paradox, leading you to draw the wrong conclusions based on aggregate statistics.
Make sure the results are accurate and significant. This means the ads should have been active simultaneously, conversion tracking is in place, the ads have been in the same (or very similar) positions and obviously: both ads have had sufficient clicks (and conversions) for the differences to be significant. The tools at the bottom of this post will help you determine whether the differences are significant. You should aim for a 95% confidence level or higher.
So you don’t want to draw conclusions too soon, but on the other hand, you don’t want to keep running significantly underperforming ads. So make sure you’ll know right away whenever an ad is underperforming.
Keep track of your learnings. Before you know it, you’ll have tested dozens if not hundreds of ideas. So make sure you (and your colleagues) don’t forget what has worked and what hasn’t by logging your test results. This prevents you from testing something you’ve already tested in the past (although sometimes, this is actually worth trying) and helps you generate truly new ideas.
Split Testing Keywords, Bids, Ad Group Structure and Match Types
It’s probably one of the least used features within AdWords, but you’re actually able to split test all these elements (and others) with AdWords Campaign Experiments (ACE). I won’t dive into how to set up experiments or how to monitor them as Google provides clear guides and some useful examples can be found in these 1 minute videos:
Keywords & match types: test the impact of adding a new keyword or different match type.
Bids: test the impact of changing your bids. This is especially useful if you’re looking for the optimal combination of efficiency and volume for a keyword or ad group. Usually a higher bid should lead to a higher CPA or a lower ROAS, but it should also lead to more conversions or revenue. By running this test, you can actually see the efficiency and volume combinations for different bids and choose the one that delivers you the most profit.
Ad Group structure: although you can be pretty sure that a tightly themed ad group should outperform a less specific ad group, you can actually test this to be up to 99.9% certain that this is not due to chance.
Ad Creatives: this option doesn’t add that much to regular split testing without ACE as described above, besides seeing confidence levels in the AdWords interface and easily aggregating the results at the campaign level.
There’s another reason I won’t go too deep into ACE, and that’s because Google announced to take split testing to a whole new level with Drafts and Experiments. This means a more sophisticated, user-friendly and powerful way of split testing compared to ACE.
And yes, this means you can even split test campaign settings, like whether or not you should use automated bidding. That’s fantastic news for all of us.
The bad news is that we’ll have to wait until somewhere in the first half of 2015 before this feature will be released. Until then: try out the possibilities with ACE, the results may surprise you!
Testing New Opportunities
Next to scientific testing with hypotheses, controls, experiments and confidence levels, there’s also the good old “let’s try something new”.
So what kind of things could you add or change in your account?
Suggestions from the Opportunities tab
These have become a lot more useful than they used to be. You will even find suggestions to lower your bid for locations to improve performance. But you’ll also find the suggestion to set your rotation setting back to optimize for clicks or conversions. As discussed above, you don’t want to do this.
So make sure to regularly take a look at the Opportunities tab, and use your common sense to decide which one(s) to apply.
Dynamic Search Ads
If you haven’t tried Dynamic Search Ads (DSA) yet, you definitely should, especially if you sell a lot of different products (but even if you don’t).
Any skepticism is understandable, as you’re letting Google decide which search queries to target based on the content on (parts of) your website. That’s why you always need to keep a very close eye on DSA campaigns.
But for mature accounts, it gets harder and harder to come up with new keywords. So next to traditional keyword research with the tools listed at the bottom of the Keywords and Match Types part of this series, DSA can help you find additional keywords and increase your reach with much less effort (but more risk).
Create a separate campaign for Dynamic Search Ads.
Start with a daily budget you can afford to test with.
Initially, set your max CPC’s lower than most (if not all) CPC’s in the rest of your account. You can always increase bids later if you’re happy about the first results or want more volume from your DSA campaign.
Add negative keywords beforehand: words you don’t want to be matched on anywhere and keywords that are already active in other campaigns (especially your brand name, including misspellings).
Review the search terms report often (weekly at least) and add irrelevant or underperforming queries as negatives. And on the other hand:
Promote search queries with 2 or more conversions to their own ad group in a regular campaign (and add them as a negative afterwards).
Test and optimize the description lines of your ad copy (you can’t control the headlines).
Don’t forget to add sitelinks and other extensions to your DSA campaign.
Combine DSA with RLSA to create a separate RDSA campaign. That way, you’ll only target your site visitors, which makes DSA much less risky. You could start with this if you have a lot of traffic on your site and prefer to start small.
AdWords Betas
Once you (or your agency) spend a significant budget on AdWords, you may have a Google rep and he or she can keep you up-to-date on the latest product developments and (upcoming) betas.
In that case, participate in any beta you can and that makes sense to your business, as it can give you a unique (but temporary) advantage compared to advertisers that aren’t participating in the beta.
As I’ve started this post with the well-known “always be testing” mantra, let’s wrap up with the following very appropriate Google mantra:
Tools:
As mentioned earlier in this post, there are several tools to help you out with testing, especially with the tedious work of checking for statistical significance.
Chad Summerhill’s Excel Spreadsheets: Chad created 2 great Excel downloads to quickly calculate the significance for difference confidence levels when it comes to CTR, conversion rate and conversions per impression. All you have to do is share the page(s) on Twitter or Google+: file 1 including sample size calculation and file 2 with explanation within the spreadsheet (but without needed sample size).
Note: Chad’s site and splittester.com are offline
Use this tool if you quickly want to find out the significance of CTR differences between 2 ads.
Paid Tools
AdAlysis: my favorite ad testing tool, fully dedicated to make your ad testing life easier. No more manual checking and waiting for significance, as AdAlysis will automatically show where tests have reached significance. Scroll down the AdAlysis homepage to get an idea of the features or watch the instructional videos.
AdBasis: if you want to take your automated ad testing to the next level, AdBasis offers a multivariate solution that calculates which ad combination is best for each conversion goal.
AdProof: testing is great, but it can still be an expensive way to learn. What if you could use crowdsourcing to test your ads instead of paying Google for clicks? That’s what the AdProof platform offers: cheaper and faster test results.
Optmyzr A/B Testing for Ads: one of the Optmyzr tools that makes ad testing easier by doing the math for you.
Testing: Your Audit Checklist
Is the ad rotation setting set to rotate indefinitely for all your campaigns? Do all your ad groups contain 2 to 4 active ads (per device)? Have you paused all significantly underperforming ads and replaced them by new challengers? Do you use AdWords Campaign Experiments to split test other AdWords elements like keywords, bids and ad groups? Do you regularly check the opportunities tab and apply/test the suggestions that make sense? Have you tried Dynamic Search Ads (DSA), following the mentioned best practices? Have you tried Dynamic Search Ads in combination with Remarketing Lists for Search Ads (RLSA)? In case you have a Google rep: are you participating in any betas that you’re eligible for and that make sense to your business? Bonus: do you use one of the mentioned paid tools to make ad testing easier and more effective?
This is a guest post by Wijnand Meijer, Quality & Learning Manager at iProspect Netherlands, an online media agency based in Amsterdam. He created his first AdWords campaigns in 2006 and is currently helping advertisers and coworkers alike to get their Paid Search to the next level.
Opinions expressed in the article are those of the guest author and not necessarily bgTheory. If you would like to write for Certified Knowledge, please let us know.
Google just announced that all exact match and phrase matched words will be treated as ‘variation’ or ‘near’ match starting in September.
I want to show you why this is an absolutely terrible idea if Google does not let you opt out of this (which it does today).
What is Variation Match?
If you are unfamiliar with this setting, it’s neither good nor bad – it is account and maybe even keyword specific whether it is good or bad for you.
If this setting is turned on, then your exact match and phrase match keywords can show for ‘variations’ of those words. These are commonly misspellings, singulars, plurals, etc.
This is a campaign level setting:
Viewing Variations
When you navigate to your search query data, you will see (close variant) next to the match type indicating that this isn’t your keyword, but a variation of that keyword.
Determining if this is a good or bad setting
The easiest way to see if this is a good or bad setting for you is to use a pivot table and view your data by match type:
In this particular account, close variations have much lower conversion rates and much higher CPAs than their actual match type.
Advertiser’s Are Slowly Losing Control
Variation match isn’t always bad, there are times it can be good to use variation match. However, there was choice.
In fact, in this account variation match isn’t all bad. It uses a Search/Discovery or Alpha/Beta structure. Variation match is turned on in the Beta campaigns and turned off in the Alpha campaigns.
Finally, if you want control – please tell Google how bad of an idea this is. Loss of control is never good. Mobile control was lost with Enhanced Campaigns, and now you’re losing control over your match types. This will further erode your ability to control costs and conversions within AdWords.
Is your feed fresh and does it contain all products you want to advertise for, i.e. does it match with the contents on your website (prices & availability especially)?
Many marketers must submit all their ads to a legal and/or corporate branding team for approval before they are allowed to use them in a PPC account. These departments can often be bottlenecks to ad testing.
Once you have agreed on a format, ask them how long it will take them to approve ads in that format. Bringing a few printouts of varying numbers of ads to the meeting can help them see how many ads you really do need to get approved.
No matter how much you try to write ads that will always be approved, some will be rejected. The trick with rejected ads is to have a feedback loop as to why it was rejected. In some cases, it might be something as simple as an unsubstantiated absolute or a number in an ad. In other cases, it’s the combination of lines together that will cause the rejection.
