Determine Price By Position:
The top ad position sometimes loses money. To find out what the top position costs on Google AdWords you use their Traffic Estimator tool without entering a bid price. This price will roughly equate to the bid necessary to rank #1 for 85% of search queries. Keep in mind that since their factor in CTR ads which get a low CTR will need to pay more while ads with a high CTR not cost as much per click.
In mid 2006 Google created a bid to position feature, but typically it is best to use prices to control your position. If you find that the top 2 or 3 positions are cost prohibitive, but positions 4-7 work great then you can bid high enough to where you would normally rank in one of the top few positions and then use the bid to position feature to limit your exposure.
Determine how Competitive a Market is:
Markets may shift quickly. If you notice certain ads appearing again and again over time, they are probably ads that are generating profits. For a quick glance at how competitive a market is you can look at the estimates in the Google Keyword Tool.
You may also want to record the top 10 results every few days for a few weeks to up to a month. If an ad is in around the same position (which is not from a huge corporation) after a month has passed they are probably earning profits.
Listing Your ads on Top of Google Search Results:
While lower ad positions may have a better ROI in some markets they also may not provide adequate distribution to create significant profits. Google AdWords may list the top 1 to 3 ads above the regular search results (versus off to the right side like most other AdWords ads). The top ads usually have a high click through rate which helps lower click costs.
The ad position on the Google SERP right column is determined primarily by the equation max bid times ad click through rate. Before an ad can appear on top it has to be reviewed by a human and the ad has to be deemed extremely relevant. Relevancy is closely approximated by click through rate, so the ads which display above the Google search results factor in click through rate more heavily than max bid.
If you get an ad which is placed above the search results and edit it, your ad may take at least a few days appear back in a top position.
Find the Best Products:
If you see a lot of affiliate ads then typically there is a dominant player or system in that keyword termspace. You may want to try purchasing your competitors product to see the whole sales path all the way through to the backend.
If there are more non affiliate ads than affiliate ads odds are that there is no dominant player / system in the marketplace yet.
Checking Broad Match, Phrase Match, & Exact Match:
Using exact match may drastically improve click through rates. To determine if a person is using exact match do a search for
keyword A adfkafdjsadf keyword B
If their ad still shows up they are using broad match.
If their ad does not show up for broad match check keyword A keyword B dfadfkadfa. If it shows up for this check they are using phrase match.
If their ad does not show up for the phrase match, then they are advertising via exact match. Any time you are checking competitors’ ads you will want to refresh the screen multiple times as sometimes certain ads rotate in and out of the system.
Keep in mind you can use different bid prices to bid on all matching variations at the same time.
Extreme Local Targeting:
Google will allow you to target your ads to:
- any zip code or metropolitan area
- a radius near your business
- the defined coordinates of any polygon you enter
Using Syndication:
Google has various levels of ad syndication explained in the below chart. Google.com is part of all search ad delivery options. You may chose to deliver content ads in conjunction with search ads by setting up separate content bids, or you may wish to deliver some ads just to the content network.
| Syndication Type |
Where Ad is Shown |
| Google |
Google.com |
| Search |
Google.com + AOL, Earthlink, and other search sites |
| Content |
many contextual AdSense partner sites |
| Site-targeted branded content CPM |
whatever sites you pick; charged per impression |
If you set up ad syndication you can bid separately on content ads. Bid whatever you determine to be fair market value for the Google AdWords distribution and then bid a separate lower value for content ads.
Some people like to use different campaigns or ad groups for content and search ads so it is easier to track the R.O.I. Some terms convert far better on search than content, and if these stats are blended it may be harder to notice the trends at a quick glance.
On some occasions it may make sense to make content only ads if you are trying to increase branding without spending a significant amount of money. Content ads are generally clicked on at a much lower rate than search ads.
In some rare cases content ads are worth more than search ads, but in most cases there is not as much implied buying demand when a person reads an article about a subject as when they are actively searching about that topic.
With your content ads you may also want to try using image ads to lock out competition from being able to advertise against you. Some ads disabled from search distribution due to low click price and low relevancy still may appear in the content network.
In November of 2006 Google started allowing advertisers to bid not only on specific sites, but also on specific AdSense channels, so if publishers are using different channels for different parts of a page you may want to bid on the ad unit which most closely fits your goals.
Syndicated ads do not appear on partner sites until they are approved by an editor. Many ads appear on Google.com prior to editorial review.
How Google Determines AdSense Relevancy:
Google reads the content of AdSense publisher webpages to determine what their pages are about. When attempting to match ads with those pages Google considers:
- Not a single keyword, but the entire keyword list associated with an ad group.
- You want to use well themed keyword adgroups to help ensure your ads are delivered properly. Including generic words like computer can make it harder for Google to understand what your adgroup is trying to sell.
- Textual Adgroup creatives are also used to help understand what ads to display.
- Max PPC and clickthrough rate play into the order of the ads displayed.
- Using appropriate campaign negative keywords can also help further target your ads.
- Google offers effective contextual advertising tips in this free 9 minute video.
Google AdSense CPM:
Most AdSense publishers do not make an exceptional amount of money for publishing AdSense since the ads do not usually have a high click-through rate. To help compensate for that, and to make AdSense more appealing to large traditional media buyers, Google also sells AdSense ads on a C.P.M. rate.
Advertisers can buy ads on off-topic sites for branding, but they have a 25 cent C.P.M. minimum, and will have to compete with the revenue earned by other advertisements, which could drive the price much higher. This will eventually cause people to significantly bid up the ads on some of the larger & more important AdSense partners.
Large publishers who do not want to compete with Google selling direct ads can optionally turn off the C.P.M. feature.
C.P.M. ads can also be targeted to a specific page or section if an advertiser does not want to buy ads across an entire site.
A good way to get your ads syndicated to content sites you want to be on without being forced to pay C.P.M. rates is to bid on common page text or names of sites you want to be on and only enable that ad to be displayed on the content network. That should roughly let you target some of your favorite sites and still only pay when people click on your ads.
Google also allows you to target AdSense site targeted ads via demographics data.
Losing Small Money on Contextual Ads:
Sometimes it makes sense to lose a bit of money on contextual ads. In some cases you can get around 5 or 10 million ad impressions for around $1,000 or so.
Those ad impressions give you a brand lift and may cause increased search volume for your brand, which you may later convert on. Just make sure you do not bid so much on contextual ads that click fraud becomes appealing or your ads start getting syndicated to loosely related sites just because your bid price is so high.
Filtering Junk AdSense Clicks:
Click fraud is a huge issue. Google now allows you to filter out sites that you do not want to advertise on. If a site sends you significant traffic that does not convert you can block your ads from appearing on their site.
This tool, which I have not yet tried, tracks which sites your AdSense ads are appearing on. Sometimes low quality scrapper sites actually convert well since people only find them via search and immediately click an ad while still in search mode. You can’t determine how well a site will convert without tracking it, although if you are getting a ton of clicks and suspect fraud then it is best to block the URL.
If you enable content syndication (displaying your ads on AdSense) make sure you filter out regions which have notoriously high click fraud (India and most of Asia) unless you are trying to target those regions.
Why Lower Ads Often have Better ROI:
The lower ads have a lower bid price, which can help save money if the top placed ads are overpriced. Another great benefit of having a lower ad is that a user that scrolls down the page to click is more prequalified to make a purchase. By scrolling through a bunch of ads they have displayed a greater intent to make a purchase.
These two combine such that listing lower often provides a better ROI than listing at the top. If the top ads seem too expensive you may need to test the profit elasticity for your market to see what ad locations will return the highest overall profits.
Lowering Click Price after Bidding:
After you get 10 or 20 clicks and have a decent click through rate you may want to slash your bids in half or by 2/3. Often it is best to start off with your ad near the top to collect feedback and then let it fall back after you drop ad price.
Instead of lowering your bid all at once lower it slowly over time and monitor your ad rank position as indicated in the AdWords interface.
Expanding Breadth:
If you are running your ads correctly the availability of well targeted ads should be what is limiting your spend.
If your ad spend is limited by a budget and you are ranking high for many of the search terms lower your max bid to lower the position down to 3 to 7. In doing so you will be able to show up on more search results and people who are looking at the lower ad positions are more pre-qualified to buy.
Dynamic Keyword Insertion:
If you have a group of similar keywords that could still use the same body text you can enable this feature by writing out your normal body text, and placing KeyWord: default keyword in the title of the ad.
When the keyword matching the search is greater than 25 characters the default ad title will show. Otherwise the ad will show the search term as the ad title. Also note how I capitalized the K and W in keyword. This makes the words in your ad title appear capitalized.
Having keywords in your title can help your title jump out at people and improve click through rates.
Google now also allows you to pass the referring keyword trigger as a variable in the actual destination URL. To pass the trigger keyword as a variable use &kw=keyword. You can also track whether the clicks came from Google content ads or Google search ads by adding the following to your URL referrer=ifsearch:GoogleAdWordsSearchifcontent:GoogleAdWordsContent.
Use Keyword Rich URL’s to Your Advantage:
Often people view the URL as one of the most important parts of an ad. The ad title sticks out the most, but many people factor in the URL more than the copy. By changing your URL to a keyword rich URL you can sometimes raise your click through rate by 50 – 200%. A new throw away domain name only costs $8 at GoDaddy.
Bid on Competitors Names or Products:
I believe this is illegal in France (and maybe some other areas), but trademark laws still have not been firmly set in this field in the US. Unlike Yahoo!, Google allows US and Canadian advertisers to bid on trademark names of their competitors. The competitors trademark names may not appear in the ad, but they can be used as the ad trigger word. I can tell you from personal experience that these terms are often super cheap and convert well.
If you use competitor names as the triggering word then you need to group that in an ad that is not using dynamic keyword insertion or your ad title will put you in trademark violation.
Keep in mind that since the laws are gray in this area you may run into some problems if you push the envelope and do not respond to complaints. I believe in the US trademark owners are required to inform you of the problem and give you a chance to fix it before they have a chance to sue you for damages (whether or not they can sue you is still somewhat up in the air).
I did this particular technique and ticked off about a dozen SEOs who made a few hate threads in forums. I primarily was looking for AdSense ad space in articles, but some SEOs offered nasty comments about the technique (although it is a rather common technique).
You may want to ask people before using their names if you think they may take it the wrong way. Another good way to appear on many content sites is to run your ads on phrase match for some of the more popular article titles in your industry.
A way to avoid the controversy associated with bidding on competitors names is to only bid on their names on content matched ads (ie: disable search ads in the ad groups focused on competing products).
Viewing Geographically Targeted Ads:
You can target ads to a specific country. If you are not in the country you will be advertising in you can view the country specific ads by adding &gl=country code to the search string (ca for Canada, US for United States, UK for United Kingdom, etc).
If Google is mixing in state regional ads, it will list the state name at the bottom of the ad.
Geotargeting can allow you to afford words which may be broader than your globally effective keywords since geotargeting only delivers ads to locations you are interested in advertising.
You may want to break your ads down by different price levels by country codes. One of my friends nearly doubled his ROI by placing ads from low converting countries in their own cheaper ad groups.
Google also offers a free AdWords Local Ad Preview tool to show what ads will appear on search results in different areas.
Sending Users to a Landing Page:
The conversion process works best when you remove unnecessary steps. By sending a user to a focused landing page versus your home page you should improve conversion rates.
Use Capital Letters:
Google will allow you to use capital letters at the beginning of words in the title and in the description. Using capital letters at the beginning of each word in your ad title and ad description may help boost your clickthrough rate. Most people do not capitalize short words like an, or, and a.
Split Testing:
Google will allow you to test multiple ads at any given time. Every week or month you might want to try to make a new ad and place it up against the best prior ad. If you have an ad that is getting an exceptionally low click through rate and another pulling decent you can usually get rid of the bad ad after a few clicks on it, but it doesn’t hurt to let these ad tests run long.
Perry Marshall created a free online Split Testing tool which will help guide you using mathematics to determine whether or not you have collected enough data do stop testing. He said he usually recommends waiting until it is at least 90% to 95% sure of the results (as determined by the software).
You can also make two copies of the same ad and send it to different URLs to test different landing pages. Google also offers a free multivariant landing page testing software program called Google Website Optimizer.
When split testing you will want to turn off the auto optimization tool and you may want to limit the test only to Google so you can get the most accurate data.
More Advanced Ad Testing:
I do not work with large enough accounts to have put extreme effort into some of my tracking, but a few other ad testing options are:
- Split Testing:explained above, but you can keep doing split testing over and over again, creating smarter and smarter ads
- A/B/C testing:make two identical copies of one of the ads and compare it to another. Run until the CTR of the same ads are nearly identical and then compare that rate to the other ad.
- Quadrents:use two title sets and two description sets which make 4 ads. Leave them unoptimized and run the AdWords account until a clear leading ad is found.
- Taguchi Method:a bit complex for this guide, as I have not deeply researched it and most people probably will not use it, but the Taguchi Method allows you to set up a large matrix of variables and determine what the best combinations are using advanced mathematics and minimal testing.
If You Are Having Problems with a Word:
For your highest traffic and most expensive keywords you will usually want to make custom ads groups or ad campaigns specific to each one. If you have a word that is giving you problems in an ad group, remove it from the ad group and set it out on its own.
Off the start, you can try to exact match it as well. If you try multiple exact match specific targeted ads for that keyword and still can not get it to run profitably, then that might not be a word worth running an ad for, or maybe you can save it as a word worth trying again later down the road.
Cheap Traffic:
Some AOL users have type search term here in their search queries. Some of them accidentally run the word here into their search term, such as hereViagra or hereYourTerm. Some people search for stuff like NBA Basketball.com. There is a ton of cheap targeted traffic if you are creative.
Affiliate Ads:
Google only allows one affiliate or merchant ad per keyword per URL. This means that whoever has the ad with the highest effective price (CTR * max bid) between the merchant and all of their affiliates gets their ad displayed.
Affiliates can still have their ads show up if they create white label affiliate sites with information about the products.
Creative PPC Techniques:
Mikkel wrote a few good ppc tips in this article. A few pointers he offered were:
- Think creatively.
- Do not point P.P.C. ads directly at landing pages. Instead, use intermediate pages. This way you can redirect the ads to a page with new sales copy without needing to change the ad URL.
- You may be able to cloak pages that the ad editors see.
- Do not use the budget function. Your budget should be determined by the amount of relevant profitable traffic you can buy.
Someone at ThreadWatch also mentioned that some of your most creative AdWords ad ideas might be best to try out on a Friday evening so that they may be able to run a full weekend before being spotted by an editor.
If you have the top premium AdSense position and also rank well in the organic listings you can help bump the #2 premium ad position down to the right rail if you edit your copy. It may take up to 3 days for an editor to read your new ad and raise both ads to the top of the results again.
Getting Quicker Business Feedback:
When starting a B2B account it is a bad idea to start an account on a weekend since there will be few buyers over the weekend. Monday is usually the biggest spending day for most B2B purchases and is the best day to start your ads.
Lead generation may be a smarter way to dive into Google AdWords than trying to sell affiliate products. Since it is common to have a lead generation rate of 10-20% the feedback loop is about 10 times as fast as selling a product that may convert at 1-2%.
Google AdWords Competitive Analysis Software:
Google does not give its users tons of information about competing sites. Recently a couple software products hit the market which ping Google and determine the ad display rate and average ad position for your ads and competing ads. You can use this information to see which competitors are most sophisticated and what positions have the most competition and perhaps profits.
AdArchiver is a cheaper lower end product. AdGooroo is a higher end more sophisticated system. Google also released an API which allows people to build similar interfacing software. SpyFu and KeyCompete both allow you to glimpse a list of keywords some competitors bid on.
Bidding on Your Brand (Important):
If you rank at the top for your brand name should you also buy the associated ad? My answer is usually yes for the following reasons:
- You can control the branding statement on your ads. You may not be able to do that with your regular listings.
- You can point people at your landing pages or make special offers with the ads. Usually your home page ranks in the regular listings.
- If you are not advertising there then your competitors may be.
- If the top ranking ad is from the same site as the top ranking regular result then more people may click on your regular result.
- If you have affiliates make sure you are not getting in bidding wars with them. Create a consistent affiliate marketing plan that makes sense.
Creating Ad Groups:
- Your most competitive or most important terms should usually be in their own ad groups (or perhaps ad campaign) so they are easy to monitor and so you can write ad copy that is precisely targeted to those terms.
- You may want to create a group for misspelled terms.
- You may want to create a group for mistyped domain names.
- You may want to create ad groups based on personality types.
- You may want to create ad groups for your most important products.
- You may want to create ad groups for seasonal or special promotions.
- Some people also use different groups for contextual ads due to different ad value and the desire to use different ad copy.
There are many ways you can split up your account. By creating and tracking various ad groups it makes it easier to monitor your return on investment, and adjust you’re your ad spend accordingly.
Deep Keyword Research:
Using deep keyword research is hugely important.
Yahoo! Search marketing places exact matches ahead of broad matches, so if your competitor bids $2 for widgets and you bid 11 cents for buy widgets when people search for buy widgets your ad may list above your competitors ads even though your ad is a lower price. This allows you to get more targeted clicks at a lower price, which increases your advertising return on investment.
There is something to be said for simplicity and ease of management, but using targeted permutations of your most important terms should drastically increase your ROI.
With Google AdWords they allow dynamic keyword insertion (mentioned above), that allows the search query to drive the ad copy. That increases your chances of having a higher clickthrough rate and lowering your cost per click if you bid on many variations of your most important Google AdWords keywords.
Below is a chart of some example term ideas (with the words slightly modified) and the associated conversion data from an actual AdWords account. Notice how the cost per conversion drops off when modifiers are added to the root term. By bidding on these additional keyword phrases I am paying less for higher targeted leads.
| Keyword Phrase |
Cost Per Click |
CTR |
Conversion Rate |
Cost Per Conversion |
| abc tires |
$0.77 |
7.8% |
1.86% |
$41.37 |
| abc car tires |
$0.64 |
10.9% |
1.92% |
$32.96 |
| [abc tires] |
$0.75 |
10.1% |
2.32% |
$32.01 |
| abc sports tire |
$0.74 |
12.4% |
2.91% |
$25.29 |
| abc tire co |
$0.59 |
15.1% |
2.70% |
$21.73 |
| [a b c tire company] |
$0.56 |
38.2% |
11.11% |
$5.03 |
| abc tire products |
$0.74 |
17.3% |
22.22% |
$3.30 |
| misspellings |
$0.21 |
3.6% |
1.82% |
$11.37 |
Adding modifiers will split up the traffic volumes to make some terms seem more profitable than they are and make other similar permutations seem less profitable than they are. The math from the above campaign was compiled over a year with hundreds of thousands of ad impressions to help smooth out some of the discrepancies.
You have to consider the cost of building and managing the account when building out your keyword list, but I tend to like using various matching levels and modifiers on my most important keywords.
Pay Per Call:
Google has started testing pay per call. To some businesses pay per call will not have much of an effect, but high end local based businesses (legal, loans, real estate, etc.) will find their competitive landscape drastically different in the next year.
http://www.google.com/help/faq_clicktocall.html
Google Checkout:
Google is trying to become a leading payment processor to help make their ad market more efficient, gain more market research data, and create another revenue source.
AdWords advertisers who accept payment via Google Checkout have their AdWords ads highlighted, which may cause them to have a higher clickthrough rate, and thus offer more targeted traffic and a better ROI.
Additional AdWords Resources:
How to Improve Clickthrough Rate and Slash Google AdWords Costs to Maximize Profits:
