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Three Google AdWords Myths That Need to Die

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Google's AdWords auction is in a constant state of flux. Search marketers have to keep up not only with the inherent fluidity of a live auction but with the hundreds of changes Google makes to its paid search platform each year.

At the SMX Advanced conference a few weeks ago, I shared a presentation about some of the more significant changes and how they're changing the way marketers should optimize their AdWords accounts.

Too many are stuck in their old ways and suffer the consequences of failing to adapt. If you don't understand Quality Score—Google's all-important metric that determines your ad position, cost per click, and impression share—you're going to get stuck with higher costs and overall account malaise.

Thankfully, you can nurse your campaigns back to good health with an understanding of the myths (and truths) of AdWords as it is today—not as it was three or four years ago.

Here are three myths to stop believing.


1. Lower click-through rates will save me money

This is a common refrain: "I'm paying for too many clicks!"

Some advertisers intentionally target broad keywords with low clickthrough rates (CTRs), so they can pay for fewer clicks. Because it's pay-per-click marketing, fewer clicks means lower costs, right?

That is silly. Not only does doing so not work, but you're sabotaging your entire account by doing this.

Google assigns each of your ads a Quality Score, which has a huge impact on your ad placement and the price you will pay for each click as shown in the following figure:

 

The main thing that determines your Quality Score is whether your ad beats the expected average CTR for a given ad position.

Two things to note are...

  1. Expected CTR varies by ad position, so bidding higher or lower to change your position won't affect your Quality Score.
  2. An above-average CTR results in an above-average Quality Score, which means you can actually bid less and pay less per click to get a higher ad position (more visibility) than your competitors.

Truth: Your low CTRs are actually telling Google, "My ad isn't all that popular or relevant. No one likes it all that much." The only thing that is going to achieve is an overall lowering of your Quality Score, which means higher costs per click and fewer ad impressions.

2. Every keyword stands alone

Until recently, Google never admitted that anything other than a single keyword's performance figured into Quality Score. That led many advertisers to believe that having junk keywords with low Quality Score in your account had no detrimental effect on the rest of the account.

Last month, Google finally released some new information about Quality Score that is more in line with my findings.

The fact is new keywords with little to no performance data still have Quality Scores, which means that Google is using other keywords in your account to help gauge the relevance of that new keyword.

That cuts both ways:

  • If the Quality Scores of the keywords in your account are higher than average, new keywords get higher scores, too. This is why I always advocate bidding on branded keywords; they get very high CTRs and lift your whole account.
  • If your Quality Scores are lower than average (due to low CTR keywords that should have been paused or deleted months ago), you pay a penalty on each new keyword you add.

Truth: Accounts with high-average Quality Scores get a performance boost (and a cost-per-click discount) even on brand-new keywords. So keep your account-average Quality Score high, and delete the junk keywords that are killing your account.

3. I don't stand a chance... You just don't get high CTR/quality score/conversion rates in my industry

That is baloney. We've done extensive analysis of impressions, CTRs, Quality Scores, and conversions across industries, and no one is at a disadvantage just because of their niche.

In the following chart, the Green line shows how Quality Score is calculated for a few dozen of my clients in the real estate industry. The blue line underneath it shows how Quality Score is calculated for several hundred of my advertiser clients in other industries.

You can see that the two lines are basically on top of each other, signifying that there is no big difference between how Google calculates Quality Score for one industry versus another:

I found that it was the same formula used for pretty much any other industry too.

Remember, Quality Score is based on whether you beat the expected CTR for any given ad position. In any industry, approximately half of the advertisers are going to have a below average CTR, which in turn affects Quality Score—and that influences ad position, impression share, and costs per click.

Truth: There are low to high Quality Scores and performance in every industry, from finance and B2B to e-commerce. You're competing against the people in your industry, and no one industry is at a disadvantage.

The New Rules of AdWords

Google is all about quality, quality, quality. That means...

  • the quality of your account keywords
  • the quality of your ads and their relevance to the searcher's query
  • the quality of your landing pages

Google uses clues, such as whether your ads beat the expected CTR for their ad position in your industry and how relevant your landing page is to the user to gauge the relevance and quality of your ad campaigns. That means you have to strive to improve your CTR in order to demonstrate maximum relevance and quality to them.

Advertisers who focus on cutting the fat and improving quality are richly rewarded, with CTRs three to six times higher than average and conversion rates five times higher than their competitors in the same industry.

Are you going to be one of them?


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Larry Kim is the founder/CTO of WordStream Inc., provider of the AdWords Grader and 20 Minute PPC Work Week.

Google+: Larry Kim

Twitter: @larrykim

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Comments

  • by Lyndon Johnson Thu Jul 17, 2014 via web

    Thanks Larry - some interesting information here.

    Great to hear that being specific and targeted is a good strategy - it's about quality, not necessarily volume.

    Best wishes,

    Lyndon
    Founder, THINK | DIFFERENT [LY]

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