/Culture/ Master Google AdWords
14/05/2007 | Filed under Discover > Culture
Google AdWords is a phenomenon that’s transformed internet marketing. Advertisers allocate vast sums to it, yet many are daunted by rising keyword costs and click fraud. Does it lead to an advertising goldmine or is it more fool’s gold? Mark Buckingham investigates
Until a few years ago, like many internet marketers, I was focused on search engine optimisation, the practice of priming a website’s content and link popularity for improved rankings. If I’d known then that a pay-as-you-go advertising system would soon become an indispensable resource for millions of businesses, heralding a new era in online marketing, I would have invested not only in Google’s sponsored advertising from the beginning, but in its stock. From the moment I created my first ad campaign and saw the almost instant results, I was hooked.
Whereas optimisation can take months to generate search engine prominence, pay-per-click (PPC) advertising offers the savvy advertiser immediate gains, with the potential to test new markets, promote special offers and create brand awareness at the click of a button. For some, it’s a compelling pursuit. For the less attentive and effective marketer, however, there’s a risk of wasted investment.
AdWords is Google’s flagship advertising system and is its chief source of revenue: its advertising network accounted for almost 99 per cent of total revenue ($2.66billion) in the third quarter of 2006. Launched in the US in 2000 and in the UK in 2002, AdWords covers 237 countries and 44 languages, enabling subscribers to attain a real-time geo-targeted global reach, engaging web users during the search process.
Search and dominate
Despite its multifaceted nature and increasing range of ad formats, the essence of AdWords is simple: subscribers bid for exposure in the sponsored links section to the right (and sometimes at the top) of any given relevant search results page on Google, and, if selected, its search and content syndication network. Advertisers create brief text ads, set a maximum costper- click (CPC) for their keywords and keyphrases and only pay when their adverts are clicked on. Their maximum bid helps determine whether their ads appear above or below that of their competitors’. Google only charges the minimum amount required to display the ad.
As the search market grows, so does Google’s dominance. According to Google, approximately 80 per cent of US internet users (and hundreds of millions more globally) view AdWords ads each month. In August 2006, Google was responsible for over 68 per cent of UK clickthrough traffic (from 706 million total searches across the major engines) in a market where there were almost 16,000 UK searches every minute. In the US, 3.1 billion search queries, roughly half of all queries, were conducted on Google in November 2006 (both sources: Neilsen//NetRatings). Other survey results indicate that Google’s reach from users surfing the web at home is actually 78 per cent.
AdWords’ success doesn’t need to be the province of the seasoned online marketer or those with generous budgets and hours to spare. A key to AdWords’ growth is its relative ease of use. Google provides a range of tools and resources to help advertisers fine-tune and manage their campaigns, as Sean Cornwell, product marketing manager for AdWords at Google’s UK HQ, explains: “It’s not necessary to understand all the advantages of AdWords. For certain advertisers, the starter edition is sufficient in terms of simply driving more traffic to their website, if that’s their goal. And when they achieve a certain level of comfort, they can graduate to the full edition at any time.”
I asked Sean what the chief advantages are for those new to AdWords: “The simple benefits are what make it so powerful. It’s highly targeted, accountable, ROI-driven advertising – you only pay when a user goes to your landing page. Advertisers can see immediately the benefits that they’re getting from their advertising. It’s very flexible, too. An advertiser has full control; they can set their budget and there’s no minimum spend or time requirement.”
By the very fact of its widespread popularity, those who don’t advertise via this medium may find themselves losing out to their competitors.
Spencer Dyment-Shone, head of online marketing for Loot (loot.com), the classified ad portal, agrees that PPC is an essential component of the marketing mix. “It’s almost impossible to envisage planning an online campaign without PPC. The responsiveness, measurability and predictability of PPC eclipses all other marketing channels.”
With limited characters per line, getting your message across quickly key. ‘Clickability’ is the key. Short, sharp, informative adverts are more likely to grab a searcher’s interest and it’s good practise to include the primary keyword or phrase for your group in your ad’s title or description. Try split-testing different ads to see what works. Even a minor change in your title or syntax can garner better results.
The skills to succeed
It’s not enough, however, to churn out vast numbers of related keywords and expect them to perform adequately. “This may have been the case six years ago when PPC was still relatively new in the UK, and ad quality standards and minimum bids were substantially lower across the board,” confirms Spencer Dyment-Shone. “With so many companies competing for exposure, effective PPC management is certainly more involved than that, though it’s not rocket science. The simple truth is that, the more targeted keywords are to the pages, and thereby the products and services being promoted, the more useful they’ll be to end-users.”
It’s not just your advert text that matters either. If your website lets you down, you’ll never accrue the level of conversions you hope for. If you’re unskilled at writing striking, engaging text, employ a good copywriter to get the best from your ads and landing pages to ensure the presentation of your site is up to scratch and intuitive to use.
The price you bid for a keyword isn’t necessarily the deciding factor behind your ranking. Google’s ‘Quality Score’ (QS) rewards those advertisers with high-quality, relevant landing pages and well-optimised campaigns, while enhancing the overall experience for the enduser. In principle, the higher the QS, the lower the minimum cost-per-click bid, and price you pay when someone clicks on your ad.
London-based Logan Tod & Co analysed the performance of more than 200 websites, evaluating AdWords campaigns across different sectors for a range of clients. Chief executive Matthew Tod says: “We find that three out of four people who respond to an AdWords campaign don’t engage with the advertiser’s website and return to Google quickly, with the advertiser gaining no value. Smaller companies can steal a march on the ecommerce giants by developing better landing pages that really work. The incredible thing about AdWords is that, despite the problems advertisers have with landing campaigns, the ROI is great, and there’s potential for every advertiser to improve.”
Google Analytics
Measuring profitability is another key to AdWords’ success. Google Analytics is free ROI measuring and tracking software, interlocking with AdWords (or used independently), and was launched in November 2005, released to the general public several months later. Before its arrival, it was somewhat of a headache for anyone wanting to measure and evaluate the ROI from their AdWords expenditure without relying on third party software.
Paul Walker, MD of Bodypower Sports, has spent nearly £1.2million on AdWords since its inception in 2002, investing approximately 60-70 per cent of its marketing budget in AdWords. Despite this investment, there are still some doubts: “In terms of traffic, AdWords has been a great success,” says Paul. “However, the increased cost of PPC has put a question mark against the profitability. It has allowed us to grow the business by approximately 22 per cent, though our profitability suffered due to the increase in PPC costs. Unfortunately, due to the lack of analytics last year, it’s not possible to see the ROI data and calculate the effect on our profitability. From 2007, those analytics are now in place going forward.”
Analytics can be used to evaluate the quality of traffic stemming from Google’s content network. “The additional traffic from AdWords to our website has been fantastic,” says Paul, “yet, we’re unsure of the quality of the traffic, especially from Google’s affiliate websites. Hopefully, Google Analytics will enable us to see the conversion rates and to filter out any poor performing affiliate sites.”
Brian Clifton, Google’s head of Analytics Europe, explains how it works: “It’s a tool to measure the success of your website. AdWords is about bringing visitors to your website, but what about the user experience? Ultimately, what commercial websites want are conversions, and Analytics gives our customers accountability and transparency in terms of what they’re doing with Google. You can use it as a sort of benchmark or thermometer, if you like.”
Matthew Tod adds: “Measuring single-access ratio (the number of people who look at one page and leave your site immediately) is the most important thing you can do beyond the basic AdWords reports. Google Analytics is free and works very well. To improve, look beyond just the AdWords report and use Analytics to figure out how good the customer experience really is. The numbers don’t lie.” Emphasising the gains enjoyed by those who evaluate and optimise their campaigns and their websites, Sean Cornwell says: “AdWords and Analytics give you all the data, metrics and reports about how your campaigns are performing, and I think a very important part of it is that you’re not going to get it right first time. Those advertisers who frequently test and optimise their campaigns get the most benefit on the whole.”
Speculate to accumulate
In order to make AdWords work for you, you have to set a realistic budget. A common mistake is to set your daily budget too low. AdWords operates on the basis of the ‘law of large numbers’ – it’s obviously not possible to successfully plot trends with only a few samples. Given that advertisers only pay for each click received and not impressions, you won’t necessarily use up your maximum daily budget. In my experience, an average daily expenditure of 60-75 per cent of an advertiser’s daily budget is not uncommon. AdWords’ success can make it an expensive option for those less savvy, as Spencer Dyment-Shone observes: “Increased competition tends to fuel spiralling bid inflation. This seems to signal the demise of the true AdWords ‘amateur’, as specialist knowledge and advice becomes evermore necessary to avoid burnt fingers and bruised budgets. Google does have a habit of surprising us all!”
For some, like Andrew Birtley, chief executive of www.winedirect.co.uk, it clearly pays to take the plunge: “We relaunched our website just 10 days before Christmas and spent £5,800 over nearly four days. We expected a decent return, but didn’t predict that we’d be flooded with orders,” he says. “Some of the best results came much later. In those first few days, 300 of our 8,000 unique visitors spent about £40,000 with us. But many of the others came back a week, even four weeks later. They liked what they saw and returned to buy when they were ready.”
Combating click fraud
Some claim that PPC marketing figures are overinflated and promise a false dawn, distorted as they must be by click fraud, by which a person, computer program or script imitates a legitimate user by clicking on an ad without having actual interest in the link. While unwilling to disclose its anti-click fraud detection techniques, Google’s resident expert on click fraud, Shuman Ghosemajumder, says: “Invalid clicks consistently make up fewer than 10 per cent of all clicks on the Google advertising system. Google takes this issue very seriously and has devoted significant resources and expertise to developing proactive, technically sophisticated measures to filter invalid clicks before advertisers are charged for them. As a result of our continued efforts, the percentage of invalid clicks that may escape detection is very small. In the interests of customer service, we investigate every click fraud claim made by our advertisers, and will credit them retroactively as appropriate.”
Data Protection concerns
Other doubters wonder what Google does with the information it collects. Brian Clifton assured me that data is never collected to target individuals. “Privacy is something we give time and attention to and we build it in from the ground up. In terms of Analytics, Google does absolutely nothing with that data. Customers ask us how their conversion rates compare with other advertisers in their sector, but there’s nothing we can do, because we don’t look at the data. Maybe that’s a service we could offer one day perhaps, but it would be purely on an opt-in basis and very transparent.
“There are two sides to the privacy debate,” he adds. “Ultimately, we’re providing a service and we want to help you improve your online marketing – that’s how we get our return. The other side is that website owners have an obligation in terms of privacy, in terms of tracking their visitors, so they need to be transparent about what they’re doing. But the big differentiator, and I can’t speak for every product, is that our data is collected in aggregate form. We don’t say, ‘Brian has visited the site at this particular time in this order and has done this, this and this’.”
Further irks include campaigns being paused for random system-generated quality control review and, some say, without explanation. While Google claims that all ads must comply with its quality control standards, these can occur without warning. Paul Walker experienced this frustration: “Two weeks after converting our original dollar account into sterling, we had our new account suspended pending a review for almost 48 hours, during the Christmas rush! No compensation was offered for this situation.”
While this gripe may be unavoidable, frustrations could be avoided by familiarising yourself with AdWords’ policies. Taking time to peruse the AdWords Learning Centre, the official Inside AdWords blog, and the many other resources available, is time well spent.
There’s no doubt that AdWords isn’t fail-safe. Its main competitors, Yahoo Search Marketing (formerly Overture) and Microsoft adCenter certainly merit consideration. Yet, AdWords is evolving and there are exciting opportunities ahead for its advertisers, especially with new formats such as clickto- call and click-to-play video ads. While I believe that SEO is still a vital process, neglecting the power of PPC can be a costly mistake for businesses. The opportunities AdWords offers are ostensibly limited only by budget, time and imagination. Test, iterate and optimise and you may well fast-track your way to profitability.
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Comments
sharon shinwell / 14/05/2007 / 14:03
We have been using Adwords for 2 years now, with some, but not great success. In an attempt to lower our outgoings, we recently decided to lower our ppc bids to half of their previous amount. Expecting to appear in a much less favourable postion in the sponsored links areas, you can imagine our surprise to find that we stayed at the top. This has led us to ask, if Google really does only take the money needed to beat the position of the next lower bid, (and not the whole amount if not needed) why are we still in the same position with half the amount of money offered for the PPC? I find it hard to believe that suddenly all our competitors lowered their bids at the very same second we did. Now I am sceptical about how they charge their fees, and are they accepting higher bids, when they don’t need to.
Claude Gelinas / 15/05/2007 / 04:24 / http://blog.logixca.com/
To this day, no other company on Earth offers a better cost-per-click advertising engine (and advertiser interface) than Google, in my humble "advertiser" opinion.
Don't even get me started on Yahoo or MSN...
The alleged click fraud has been next to non-existent, for me. The conversion rate has been way over the Yellow Pages, the radio station ads and the community newspaper (not the major ones, though).
It's also much easier to reach a very precise customer base.
From what I gather, in the forums (elsewhere), those who whine the most about their click conversions are those who also happen to have web sites where converting isn't easy... or sufficiently inviting. If they just updated (duh) their web site (or store), their prospective customers would surely buy more often.
Used intelligently, Google AdWords consistently delivers nice conversion rates.
Robert / 15/05/2007 / 13:11 / http://www.covenantglobal.com
Google is leaving a "ton" of money on the table for those wanting to start up a business. Nowhere other than Google can you literally carve out your market. "iterate" iscore word used in this article. I think of Adwords as a science lab where you continually discard the lowest perfoming element, and continually try to beat the best performing one. Again, this "iteration" process can literally carve out any market you desire to tap into.
Great article and thank you.
Jason Sjobeck / 16/05/2007 / 19:40 / http://www.sjobeck.com/
WE have had decent results with AdWords but also find that your budget can get clobbered if youre not watching it like a hawk (which makes us feel like we need some one sitting in front of the screen all the time, monitoring & tuning & tweaking it, which we just will not do). Good article.
Ben / 20/05/2007 / 01:25 / http://www.benkrull.com
Adwords management is more important now than ever before, especially for large businesses with tens of thousands of keywords. Small optimizations can result in huge ROI increases.
Landing page conversion optimization is an even bigger opportunity going forward. The tools to accomplish this are not very good mainly because they can't tell you what is missing. The businesses that figure it out first will be making money like crazy. It is definitely a "winner take all" market.
3rdeye / 20/05/2007 / 10:09 / http://urltrak.com/?3:gc:ChrissSecret
Chris Carpenter @ Affiliate JackPot is right when he says
referring to Google Adwords...
“...literally the world’s fastest business opportunity.”
“...you can jump into a new market in as little as 15 minutes.”
“No inventory, no email lists – you don’t even need a website!”
I believe HE's ABSOLUTLEY RIGHT!
You just have to treat PPC like a skill and learn the tricks! =]
Then youll be able to sit back, relax, and enjoy...
Hallelujah * *
Sick van Tired / 21/05/2007 / 07:25
Google cheats and manipulates its organic listings so of course it takes years for sites with real content to reach the top - they want you so frustrated that you buy advertising from them -its fraidulent practice that should be punished by The E. U. and the DOJ in the USA. You are obviousll a schill for google and are helping to ruin the internet with bill board advertising and pablum.
Sure lets add millions of crap sites so that people will of course click to leav and willat the same time generate us revenue. Google is a company filled with selfish arrogant bastards and has been sued more times than you can shake a stick at it.
have a nice day
osman / 23/05/2007 / 15:27 / http://www.kitlen.com
Adwords management is more important now than ever before, especially for large businesses with tens of thousands of keywords. Small optimizations can result in huge ROI increases. thanks you..
yoganand netrakanti / 29/05/2007 / 12:07
There is an overwhelming change in the content presentation with the advent of Adsense of Google , the world's most popular search engine
Miles Galliford / 13/06/2007 / 20:09 / http://www.subhub.com
We found that we increased the success of Google Adwords by 25% by having dedicated landing pages for every group of keywords rather than driving all the traffic to the home page. A useful tip!
Mak / 02/07/2007 / 09:41 / http://gallery.k-netsystems.net
For small budget business, here is my suggestion.
use only CPC (cost per click) model with a keyword-targeted campaign, not site-targeted campaign.
never bid on general keywords, use "specific" keywords.
write a good ad, focus is to get people to click on it. Make sure using the keywords in the ad.
make sure that landing pages use the keywords that bidding on. This will increase quality score which also influences per-click costs.
keep bid prices low as possible and set a manageable daily budget.
joe / 31/07/2007 / 00:43 / http://www.affiliateclickpayperprogram.info
A vast majority of Google users (and Internet users) would be pretty familiar with the idea of a ’sponsored link’. The ads are differentiated.
ronder / 15/10/2007 / 23:48
how can i learn more abou silicon
Karen / 19/10/2007 / 21:29 / http://www.mosaicpublicity.co.uk
Great story. We have been paying for ads on Google for about two years to promote our media training and podcasting courses and we estimate at least a 20-fold ROI if you take into account ongoing client retention. The only problem is that you drop on and off the listings throughout the day so you don't know if you've missed a big potential client. For those who are unsure whether it will work, I'd recommend trying it for a few months. You may be pleasantly surprised.
Hubbers / 27/11/2007 / 15:38 / http://www.banglebangle.co.uk/
I have used this on http://www.banglebangle.co.uk/. While I was finding my feet I kept the cost per day low and found after a few weeks that my conversion rate just wasn't high enough to cover the cost of adwords.
Especially since the cost are so high to get anywhere near an early page. In my sector I find that big name companies can appear on a couple of different pages before you get to the page that my ad is on. I can't afford to bid high enough to beat them.
MY advice is Adwords is good for high value sites with a high likelihood of repeat sales but it isn't really there to help small traders.
Gareth / 19/06/2008 / 08:50 / http://www.ukcaravans4hire.com
I think that Adwords is an absolute godsend for the small business. If you spend time researching keywords and stay away from the big traffic keywords you can find low cost clicks.
I have been using Adwords (and Yahoo PPC) for a while now and my return on investment is better than anything I've seen before when using print adverts, radio adverts, banner advertising, etc.
If you can spend the time to create a good PPC campaign then there is no reason not to use it.
James Hunt / 24/04/2009 / 22:39 / http://bookkeepersurrey.com
Adwords is amazing, it funny reading the comment at the top from 2007. Adwords has changed so much lol.
Biggest benefit.....where else can a marketeer get a client for 12pence!!!!! AWESOME!
Alex H / 07/01/2010 / 13:17 / http://www.makeawillonline.co.uk
AdWords can be hit and miss when you're on a smaller budget. If you're very targeted in the keywords that you target it can bring great results... particularly if you can find a selection of long tail searches that your rivals are missing both in paid and natural search.
At the same time, ploughing money into big, generic keywords is usually the preserve of the big brands with big budgets. As with all marketing, getting your market research right before investing is the way forward.
