A Brief History of PPC

The pay per click model came about in the late 1990s and differed from previous methods of advertising which were based on CPM (cost per thousand impressions) rather than cost per click. GoTo.com (later Overture, now part of Yahoo) were the first search engine to offer PPC in 1998.  Google were a little late to the party, adopting the PPC model in 2002.

Back in the bad old days it was literally an auction with the advertiser who was willing to pay the most per click securing the top position.

However, it quickly became obvious that this wasn’t the best model – a pretty irrelevant ad which gets only 1% of the clicks @ £10 per click generates less revenue than a relevant one which gets 10% of the clicks @ £2 per click.

As such in the mid-noughties Google introduced quality score – an algorithm which essentially ensured that most relevant ads (i.e. the ads which generated the most revenue) would get pushed to the top of the results. Yahoo and MSN later followed suit with algorithms of their own.

This changed the face of PPC – as instead of fighting an auction war, PPC-ers had to get a little bit cuter and make sure their ads were as relevant and attractive to users as possible in order to secure a decent position on the page and (potentially at least) reduce the cost they pay per click.

Quality Score Explained

Quality score is calculated every time your keyword matches a search query – that is, every time your keyword has the potential to trigger an ad.

So, how is it calculated?

Quality score on the search network is calculated based on the following metrics:

1. Historic click through rate of the keyword, ad and display URL
2. Relevancy of the keyword and ad to the term which is being searcher for
3. Relevancy of the keyword to the ad copy
4. Relevancy of the keyword to the landing page
5. Landing page quality
6. Historic account click through rate

You can read more here.

For obvious reasons Google don’t reveal quite how these factors are weighted, however it’s easy enough to guess

It’s pretty much all about click through rate.

This a nice metric as high click through rate indicates that users think that your ads are relevant/offer an attractive proposition AND of course clicks = money for Google.

Should you *always* worry about Quality Score?

Frankly, no. Whilst having a high quality scores is good from a cost per click point view (as you’re likely to be paying less per click) – you shouldn’t necessarily let it bother you overly. Obviously Google want you to play by their rules and create relevant ads that people want to click on so they can continue to rake it in; however – on some occasions you might want to bid on certain keywords, but limit the number clicks you get.

For many clients we use ad text to pre-screen clicks. For example, we may bid on a term like ‘taxi insurance’; but because our client only wants to insure taxi drivers over a certain age we might elect to run an ad like this:

Low Cost Taxi Insurance

Over 25? Compare Leading Taxi

Insurers & Find the Cheapest Quote!

TaxiInsuranceExperts.co.uk

Now here, we’re actively trying to limit the number of clicks which we’ll get – which of course may impact our quality score – however it’s far more important for us to deliver the right sort of leads to our client. So it’s not necessarily something you ought to be tyrannised by

Questions, comments, etc? Hit up the comments my dears.

Image credit KB35

Competitor analysis ordinarily forms a key part of any marketing activity, however seemingly, when it comes too PPC, it sometimes gets forgotten. 

All too often I see campaigns with impeccable structure, great keyword selection, judicious use of match types and negative matches and yet; they stumble at the final hurdle. Their ads just aren’t standing up (or standing out) versus the competition.

Consequently, as their click through rates are poor, their quality score is suffering and they’re paying over the odds for their clicks. Bad times.

So, just how good are your ads?

Check out the competition:

So you need to look at your ads in situ – here you’ll be able to see what the competition are doing, and indeed how your ads stack up. Now, you don’t want to look at them live, as you’ll be generating impressions and no clicks, which might hurt your quality score even more. Google have a handy solution – the ad preview tool.

So check you’ve selected the correct geo-targeting options so you can see your ads alongside your competitors, pop in your search query and you’re good to go. Here are some things to look out for:

Offers:
 

Click to enlarge

I’ve chosen to use ‘double glazing’ to illustrate my point as it’s a very competitive ‘offer driven’ sector. On the page you’ll see ads featuring 40% off, 35% off, 70% off, 65% off, buy one get one free, etc, etc.

Now, imagine that you’re offering 35% off – I’m guessing that your click through rates might just suffer in the face of such competition.

So what do you do? Assuming you can’t offer 70% off to stay ahead of the competition, what should you say instead?

My view would be to create a new ad to test. Avoid the whole x% off messaging altogether as it looks like you can’t compete. Instead make a general mention of low pricing, or a sale, then focus on another key benefit – e.g. interest free credit; no quibble guarantees; lower energy bills; etc. Test it versus the current ad, and see what happens.

Humour:

Click to enlarge

Alternatively, you might look for other ways to make your ad stand out versus the competition. Above I’ve shown an example of a search for ppc agencies. Now to my mind, whilst the ads shown are fine, they’re a little bit dry for my taste. Therefore, when I was creating a campaign for Gravytrain I elected to inject a little humour into the mix. Now clearly, depending on the product or service you’re promoting that might not be the way to go, but we’ve seen some success, so I would suggest a test.

Be Topical:

Again here this won’t necessarily be applicable to all products and services, however sometimes mentioning something topical can make your ad stand out versus the competition. We tested a set of ads which referenced the credit crunch for one of our insurance clients, which saw significantly higher click through rates than their previous best performing ad. Interestingly conversion rates also held up well.

Whatever you decide to do, we wouldn’t recommend making wholesale changes to your ads – instead leave your best performer live and create an alternative and see how it works for you. In order to give your new ad some exposure you’ll need to select: ‘Rotate – show ads more evenly’ within the ad serving options of your campaign settings.

Hopefully you’ve found this useful – if you’ve some additional tips you’d care to share please let me know in the comments.

Wow – we’re up to part five of the series! If you’ve not already done so, we’d recommend that you read part one, two, three and four.

So in our last post we dealt with keyword research – so hopefully you’ve now got yourself a lovely long list of keywords. Now it’s time to organise them into appropriate groups.

You might remember in part three we talked a little about account structure. To give a quick recap, an adwords account is structured as follows:

There are three levels account, campaign and ad group:

1. Account - this is the top level, your adwords account has a unique email address & password for access purposes and your billing information.
2. Campaign - A campaign is associated with your account. At the campaign level you set the daily budget, language & geographic targeting, distribution (where your ad is shown), when your ad is shown (e.g. particular days of the week, and timings) and if desired an end date.
3. Adgroups – adgroup are associated with a campaign. At the adgroup level you select appropriate keywords and/or placements, set the bids for those keywords/placements, and create appropriate ads.

At the adgroup level you control which adverts are shown for which keywords.

Ultimately you want people to click on your ad, then go on to convert (e.g. buy your product / service; sign up; become a member etc, etc). It’s therefore important that the ad (or ads) that you show for your keywords are relevant.

Let’s imagine that you sell fruit online. You might decide that you want to bid on ‘buy green apples’. Lets consider the following ads:

Buy Green Apples Online                                                             

Golden Delicious, Granny Smiths &

More. Free Next Day Delivery!

Buy Fresh Fruit Online

Huge Selection of Fresh Fruit &

Free Next Day Delivery!

Clearly the first ad is more relevant to the ‘buy green apples’ query. It’s therefore more likely to elicit a click than the generic fresh fruit ad. When it comes of PPC relevancy is King, both for attracting visitors, but also because of the way paid search networks calculate the price you’ll pay per click.

Quality Score

Google calculate the price you’ll pay per click based on a number of factors all of which contribute to quality score. Google say:

Understandably Google don’t want to reveal the precise weighting of their quality score formula, however the core components are:

1. The click through rate (CTR) of the keyword and matched ad on Google (i.e. the number of times the ad has been shown divided by the number of clicks it has received)
2. Account history – the CTR of all of the keywords and matched ads in your account
3. Historical CTR of the URLs in your adgroup
4. Landing page quality
5. The relevance of the keyword to the ads in the adgroup
6. The relevance of the keyword and the ads to the search query
7. The account’s performance in the geographical region where the ad will be shown

By taking the time to create your adgroups appropriately you give yourself the very best chance of achieving a high quality score, which will mean your ads will appear in a higher position, and at a lower cost per click.

Creating Adgroups

Now there’s no ‘ideal’ number of adgroups – it really depends on the account.

If we go back to the example of selling fruit online, I would create an adgroup for each type of fruit which I sold – e.g. apples, pears, bananas, peaches, plums etc, etc. I would then also create other adgroups for more generic search terms like fruit, fresh fruit, dried fruit etc.

When I’m trying to split keywords into adgroups I just try to think about the ads which I’m going to create – e.g. it would be awkward to create a good ad which simultaneously do a good job targeting those who want to buy apples and those who want to buy pears – hence I’d split those keywords into two separate adgroups.

Well that’s all for this week, next time we’ll cover writing your ads and of course getting your campaigns live on Google.

Image credit oskay