Google AdWords gets its own extremely long section because it is exceptionally more complicated and feature-rich than other PPC systems, largely because Google has been more innovative than competitors, and largely because Google wants to be the worldwide advertising platform. Consider the following:
- To get a lead in video distribution Google bought YouTube for $1.65 billion in stock.
- Google will unveil audio ads before the end of 2006.
- Google has tried to sell ads in newspapers and magazines.
Google vs. Yahoo!:
Google AdWords and Yahoo! are in a battle for search distribution. One of the two PPC services is distributed on nearly every major search engine or portal.
Google Bid Prices vs. Click Costs:
With Google you pick a maximum bid price and your click cost will never exceed that. Like all other major PPC providers, their software has a bid discounter built in, so your average bid cost will be less than your bid prices.
Google bid prices are not transparent so your competitors have no way to be sure exactly what your ads are costing (due to factoring in click through rates into effective bid price – which I will explain later).
A few Things you can do with AdWords:
Google AdWords is an advertising medium like no other.
- There is only a $5 signup fee (which is converted into bid credits).
- You can have ads across Google’s network of sites with some ads appearing in less than 10 minutes.
- Google’s broad match technology allows you to receive extremely broad distribution while keeping it quick, easy, and simple to use. Yahoo! and Microsoft now do this too.
- Google’s vast distribution network makes it possible to test a business model without fully investing into creating that business.
- Google AdWords syndication allows you to reach AOL users, other searchers, and Google’s vast content network.
- Google offers Geotargeting, so you can target your ad to a country, state, metro area, zip code, or geographic radius of your choice. Google allows you to preview local ad delivery using their local ad preview tool.
- You can run multiple ads for the same words and test them against each other or send them to different pages to A/B split test your site or ad copy.
- Google allows you to use a free multivariant testing software program called Google Website Optimizer to test landing page conversion potential.
The Importance of a High Clickthrough Rate:
Google lets searchers determine the relevancy of the ads. Price for Google AdWords is a function of click cost * click through rate (and, in some cases, a couple other mystery meat variables). I believe Google uses the average click through rate from the 1,000 most recent ads in this calculation, though for some markets with low search volumes they may use other quality indicatiors, like CTR for an ad group. This means if you know how to get a high click through rate you can dominate Google AdWords by serving up ads at a far cheaper rate than what your competitors are paying.
The following table gives examples of how the Google system calculates bid prices and ad positions. Observe how some low priced ads appear above high priced ads because they are more relevant. Also observe that actual click cost sometimes varies widely when compared to max bid price. Some clicks are at times expensive and at other times they are cheap. It is the average click cost that matters, since that is what you are paying. Max bid does not matter since sometimes it can widely depart from actual click price. For example, I have seen a $6.00 max bid which had clicks go for 77 cents.
| Ad Number | Max Bid | CTR (relevancy) | Effective Bid | Ad Position | Actual Click Cost |
| 1 | 0.40 | 5% | $2.00 | 4 | $0.40 |
| 2 | 0.26 | 10% | $2.60 | 2 | $0.26 |
| 3 | 1.00 | 2.53% | $2.53 | 3 | $0.81 |
| 4 | 1.50 | 2% | $3.00 | 1 | $1.31 |
Distribution buys further distribution. Off the start you will want to overbid slightly as you will be competing against the best ads that have developed over time in your niche.
The bid prices Google suggest are often somewhat high. I usually cut the suggested bid price by 20-50% when I first start an account. I then monitor closely and change it to try to maintain decent ad position and ROI.
Quality Based Minimum Bids:
In the past, Google had a five cent minimum bid price and only allowed ads to display if their Google click-through rate was above 0.5%, but in August of 2005, they shifted to quality-based minimum pricing.
This means that if your ad is deemed exceptionally relevant, you can get clicks for as low as one cent, depending on how competitors are bidding. If your ads are not exceptionally relevant, you will have to pay a higher minimum bid to make up for the lack of ad relevancy.
Google has been making their ad system more blackbox-like. They stated they may include landing page quality in their ad relevancy scores. In other words, we can’t know exactly how it works, but they will create a system that optimizes for maximum internal revenue, while delivering value to trusted advertisers, and overcharging irrelevant or noisy advertisers. If they are vague about their exact ranking criteria, it will be harder for people to game the flaws in their ad system.
Ads which are disabled from search syndication due to low relevancy and bid price, still appear in the Google contextual ad program unless their quality score is too low to appear there as well. I describe syndication later on in the chapter.
The whole point of quality-based minimum bids is to squeeze the margins out of noisy ad campaigns.
Broad Match, Phrase Match, and Exact Match:
Google AdWords and Yahoo! both have different levels of word matching. Using [search term] will only return searches ads for the query search term, which is called exact match. Yahoo!’s exact match is a bit fuzzy, matching plurals and some common misspellings. Google’s exact match is more precise, only matching the exact search.
Buying the keyword “search term” will show your ads for any search that has ‘search term’ in the query (in the same order), which is called phrase match.
Buying search term (no quotations or brackets) will show your ads on any search that has ‘search’ and ‘term’ in it. With broad matching, synonyms to search term may also display your ad. If you decide to start off with broad matching you should view the synonyms to ensure none of them are wasteful. This is especially true with acronyms or other terms with multiple well known meanings.
Google offers all three levels of ad control. Yahoo! offers exact match, and groups phrase match and broad match in a category called advanced match.
| Examples | Match Type | Will Show Results For: | Will Not Show Results For: |
| [eat cheese] | Exact | eat cheese | any other search |
| “eat cheese” | Phrase | eat cheese; I love to eat cheese; you eat cheese | Cheese eat, or anything else which does not have both words together in the same order as the search term |
| eat cheese | Broad | All above options and searches such as: cheese eating; ate cheddar |
Google Ad Status:
If you do not understand something or are frustrated with something in particular feel free to ask at an SEO forum or ask your ad representative. Google AdWords has a blog (which does not want direct AdWords feedback), an online support center, and you can contact Google advertising via phone at 1 (866) 2 Google.
Due to trademark issues some ad copy will be rejected by the automated review. When that happens you can request an exception and the ad will get a human review.
Google usually runs most ads before they have an editorial review, but they review them before placing them on partner sites. I have seen long review times in excess of a few days for Google site targeted AdSense ads.
Ads on Google.com have two states: active or inactive. If an ad is inactive you can make it active by bidding higher. Google also has an ad diagnostic tool which states what needs to be done to make each word active.
Google Keyword Suggestion Tool:
The Google Keyword Tool (https://adwords.google.com/select/KeywordToolExternal) estimates search volume, trends, and advertising competition. You can enter keywords to analyzer or they can extract relevant keywords from a given web page.
The Google Traffic Estimator Tool (https://adwords.google.com/select/TrafficEstimatorSandbox) roughly estimates the price required to rank #1 on AdWords 85% of the time and the traffic you could expect to get from Google AdWords for a given bid.
Google offers a search term suggestion tool by the name of Google Suggest which auto-completes partial search queries. It does not show search volumes, but search volume plays a heavy role in its output order. The tool is currently only available in some languages. Many Google Toolbars have this feature enabled.
Negative Keywords:
There is a negative keyword option in both Yahoo! and Google AdWords. Any word that you do not want your ad to appear for can simply be blocked by placing “-badword” beneath your keywords.
There are many words which would indicate a lack of desire to purchase anything. Words like crack, free, wallpapers, pic, and mp3 are often money losers if you do not remember to include these in your negative keyword list.
Following is an example keyword list showing a negative keyword: (should be much longer and more detailed, this is just an example)
eat cheese
buy cheese
-free
Thus, your ad would show up for many cheese queries, but for none that included the word free. Google also allows you to filter negative keywords at a campaign level.
Getting Feedback from Your Account:
When opening up a Google AdWords account many people are hesitant to spend much money. In spending a small amount the business is essentially ignoring the feedback loop Google has set up.
Is it better to lose $100 today, than to lose it over three months to finally come to the conclusion that you need to change? I would rather want to know that I need to change now. Not all industries or business models will make money from AdWords. It is not a business model that will work perfectly across the board.
If you spend on targeted keywords your site should have a chance for success. Any marketed internet based business should leverage fast feedback loops to help it improve. Off the start you want to overspend on your ads so you can see which ones are effective. After a while you can regroup your ads by prices and then slash your bid price down. The ineffective ad groups or keywords will be disabled due to quality based minimum bids and the winners will keep displaying.
Google Advertising Professional:
The Google Advertising Professional program is a program which allows marketers to be certified as a Google AdWords expert. The requirements are that you spend at least $1,000 in a 90 day period after signing up, comply with their rules, and pass an online test. After the 90 day period is up you can place a logo on your site which will perhaps make many people assume that Google endorses all of your SEO / SEM services.
This program also allows you to link together up to 500 AdWords accounts so that you can access and manage them from a single login. Google also offers many free online tutorials which can help prepare you for the test and help you learn more about AdWords even if you do not want to take the test.
Google AdWords is Responsible Advertising:
Add all the above features to the fact that Google also offers a free web based conversion tracking tool, and you can see how the AdWords system is a direct marketers dream. Everything is targetable, tangible, and measurable right down to the cent.
Google also offers a program by the name of Google JumpStart where they will help set up your account for you. Likely they will not be able to set up the best account for you, but they might be able to help you get your feet wet. The fee to join JumpStart is $299, and the fee gets converted to bid clicks.
Keep in mind their goal is to have you spend money, which may not necessarily have targeting the best ROI or best keyword buys in mind. Search engines would prefer that merchants get in bidding wars over a select small set of terms and miss out on some of the cheaper terms.
Google Adwords Tips
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