Caveat Emptor

For those of you who were not forced (at gunpoint) to take Latin lessons in school, 'caveat emptor' means, simply, buyer beware and it's a salient phrase to use in respect of Adwords. Back in May 2009 I posted about the dangers of setting large budgets in an untuned and untested account and I'll expand on that here.

Adwords is not a simple product to run and use effectively.

This message is, I believe, not pushed home forcefully enough by Google (understandably from a marketing point of view) and it leads the unwary into opening accounts and spending money with little of the learning and knowledge they need to do so efficiently and get worthwhile results. Even 5 or more years ago there were many twists and turns in the Adwords system. Today there are 10 times as many and some very complex and confusing factors can come into play when designing and operating an account. The posts from hapless users continue in the support forum: "I've spent $400 in the last two days and had no calls...", "Adwords says I'm getting 100 clicks a day so why haven't I had any sales?" and so on.

It is not just the sums of money involved here that are disturbing. It is also that many of these posters exhibit such a complete and total lack of understanding of Adwords. It's like finding someone with a car crashed into a lamp post, saying "I don't know what happened, am I supposed to do something with that wheel thing or those little pedals on the floor?".

It's easy to see how a business owner might jump at Adwords as an opportunity to improve sales quickly. But, if the owner intends to run the account themselves, there is no benefit to be had in going too fast, knowing too little. Some time learning and asking questions will reap far greater rewards than trying to knock something together in time for the weekend.

Of course, if the need is time-sensitive then there are always consultants who'll be more than happy to assist and, given the right consultant, this can also be a route to learning over time.

Being Negative Can Help

Today I'm going to champion one of favourite Adwords features - Negative Keywords. What are negative keywords? If you think of the 'ordinary' keywords in an ad group as being a list of words and phrases that tell Google when to show your ad, you can think of negative keywords as being a list of words or phrases that tell Google when not to show your ad.

It's clear from posts in the forum that many users either don't understand how important negative keywords can be in campaign performance or don't know of their existence at all! Personally I'd be very surprised if every single campaign currently being run couldn't benefit from at least one negative keyword. So why are they so important? It's all about CTR (and a bit about wasted clicks).

CTR (click-through-rate) is that ratio of clicks to impressions (an impression is each individual display of your ad) and is a major factor used by Google to evaluate the performance of your campaign(s). Generally speaking, the higher your CTR (the larger the percentage of clicks to impressions), the better your campaign is performing, so a CTR of 15% is better than one of 8%, for example.

A lot of words are written about how to increase the number of clicks to improve CTR, but the 'flip-side' to this objective is to reduce the number of impressions. 10 clicks from 100 impressions is a CTR of 10%. 10 clicks from only 50 impressions is a CTR of 20%. But, I hear you say, why would I want to show my ads less often, surely that's insane?

In an absolutely ideal world you only want your ads shown to people who are really interested in your product or service and only in response to searches that match what you actually do or sell. Using good 'positive' keywords is the primary route to achieving this goal but unless you're only using exact matches in your keyword list (where the search term must match your keywords exactly) there's a danger that your keywords may trigger in a longer search phrase that is clearly not of benefit to you and is a wasted impression or worse, a wasted click. This is best demonstrated with an example.

Let's say you run a firm of accountants and want to advertise your services. You use a variety of accountancy type keywords in your ad group all of which are either broad or phrase match types. Fine, what's wrong with that? The problem is that while you'll get impressions and clicks for people who are actually looking for an accountant, you'll also get clicks from people who are looking for work in an accountants. Unless you have a very large turnover of staff this probably isn't the aim of the campaign. Here's what you might see in a Search Query report:

accountancy services

jobs in accountancy

accountants in York

accountancy vacancies

All those job-seekers are pushing your impression count up and many of them are probably clicking your ads as well to go to your site and search for contact details to send in a CV. Adding 'job', 'vacancy' and other variations to your negative keyword list - either at the ad group or campaign level as appropriate - could dramatically reduce your impression count, increasing your CTR, and will probably save you some wasted clicks as well, increasing your conversion rate.

In other industries it may be that the negative keywords should include brands you don't stock, colours you don't sell, specific services you don't provide; as I said at the top of this post, I think every campaign could probably find one or more keywords that would be useful as negatives.

So, the next time you're thinking about keywords, try to be a little negative.

Advertsing for the Odd Times

I have a number of hotel clients and if I've learnt anything over the years it's that hotels have 'fulfilment cycles'. They're not always the same but let's consider the fictional hotel 'The Outlook' (with apologies and necessary credits to Stephen King).

The Outlook consistently fills it's rooms on a Friday and Saturday night and, for all intents and purposes has no need to advertise these rooms. Sunday, Monday, Wednesday and Thursday they do 'OK' and don't believe there's any benefit in terms of ROI (Return on Investment) in trying to get an extra room or two. But Tuesday is always terrible. Any time of the year, Tuesday night sees the hotel only half full at best, so there's a clear opportunity to fill those beds.

So how can Adwords help for just one day a week?

The 'knee-jerk' response is, of course, to use Ad Scheduling to show the ads for The Outlook only on certain days of the week but with a hotel this can't work. Someone looking for a hotel room on a particular night may search for it on any given day before that night, not necessarily the night in question. Limiting the ad display to just - say - Monday will not catch those who were trying to book a Tuesday stay on the Friday before*. So, what can you do?

The key to success here lies not so much in the Adwords features but in what and how you advertise. If you create ads that simply promote the hotel then you'll get clicks looking for any random (possibly booked) nights of the week. What you need to do is promote Tuesday as the night to stay. So, your ad copy needs to mention Tuesday night. But why should I stay on a Tuesday? This is where the hotel needs to be pro-active in encouraging customers. If you want beds filled on a Tuesday then you have to make Tuesday night more attractive than Monday. So your ads need to include an incentive - a strong 'call to action'. Offer a free breakfast, 10% off, or a double room for the price of a single only for Tuesday nights.

What each hotel (or other business) can offer here depends on the business but there's usually something that can be offered at limited outlay but which seems appealing to potential customers.

So, you can run your ads all week but because your ads are clearly offering a Tuesday night special, you can reduce the number of 'wasted' clicks from customers who are not staying that night.

*That said, with some effort and time, it might be possible to establish a pattern. IF your hotel site gathers proper data and is able to analyse it effectively, it may be that you can tell which 'advertising days' are linked to which 'stay days'. However, there's no guarantee that such a correlation will be found.

So, in short, it is possible to use Adwords to fill those 'gaps' in the schedule, but success here is more related to ad copy and offered services/discounts than anything Adwords can do as a setting or feature.

Concerning Fixed Rate Managed Services

We often see questions about companies who offer a simple, monthly fee based Adwords service. Such companies typically offer a number of keywords, a 'guaranteed' position in the ad rankings, and may offer a 'guaranteed' number of clicks. Their approach is attractive to potential advertisers because it's a quick and easy route to Adwords advertising, but are they any good?

Straight away, I want to make it clear that I have no reason to believe any such company is actually 'scamming' or 'cheating' their customers. The issue is not whether there is anything immoral about such services but whether the product they offer is actually worthwhile and offering good value for money.

To understand this question we'll need to look at the service being offered. While such companies may vary, typically their service will consist of one or more of the following features:

• A fixed set of popular keywords (often around 10 - 12)
• A 'guaranteed' position
• A fixed monthly fee

The key problem I have with this approach is that it is very difficult - perhaps even impossible - for an inexperienced customer to judge the results of such a service. Let's say you sign up and pay $300 a month. The company creates your keyword list and fulfills all their promises and your site receives 200 clicks a month. Out of those 200 clicks you make enough sales to cover your $300 and make $100 profit. So, you're quite happy.

However, you as an end-user, divorced from the actual account/campaign, really have no idea whether these figures represent effective performance. It may be that a well structured, managed campaign should return $900 in sales, not $400. You'll carry on earning $100 a month for a long time without ever realising that it could be far more.

You'll note that I haven't actually suggested that a well-run campaign will return more clicks. That's because Adwords isn't just about the number of clicks, it's all about the sales from those clicks, the conversion rate. The well-managed campaign may be able to generate $900 in sales from only 150 clicks, not 200, if the campaign structure ensures that the keywords are more relevant, the ad copy more enticing and the bid structure more appropriate.

Yes, a company offering a fixed fee, fixed keyword list may well employ decent Adwords users who can make a good attempt at creating a decent start to your campaign, but I doubt (strongly) that any will offer the sort of week on week, month on month, analysis and review that creates a truly cost-effective and efficient account.

Adwords is not a simple and easy product to use. To get the very best performance takes learning, effort and frequent management and review. It does not, in my opinion, suit a 'one-size-fits-all' approach and I can only recommend that anyone considering using a company as described above should think very carefully before signing on any dotted lines.

Short and effective - keyword lists

Some time ago I published a post about long keyword lists but, in this reborn blog, it's worth going over this problem once again. We are still seeing posts on the Adwords Help Forum from many users who are trying to manage hundreds or thousands of keywords and who are sometimes even reaching the 2000 Ad Group limit and wanting more.

It's easy to understand how it may seem that you need to include all the possible keywords someone might use when looking for your product or service, but the truth is that in almost all cases all that's required is a relatively short list of well-chosen and planned keywords. And by relatively short we could be talking about no more than 10.

To understand why this is the case we've got to consider the following:

• Frequency of usage
• Cost per click (CPC) & Conversion rate
• CTR & Daily budget
• Effect on account performance
• All of the above together!

None of these items can really be considered in isolation, so I'll try and build this explanation up slowly. Firstly, let's look at the frequency of usage.

Frequency of Usage

Although you may spend hours or weeks building a keyword list that appears to cover all the possible terms anyone might ever use that's vaguely related to your product, in truth almost all products will have a 'core' of terms that are most frequently used in search terms. In many cases their frequency could be dramatically higher than any of the other terms. For example, in a list of 100 keywords, it may be that just five account for over 90% of all the impressions received.

Cost per Click & Conversion Rates

OK, so should you just dump the other 95 words then? Well, maybe, but you've got to look at the CPC and the conversion rate (how often a click results in a sale/sign up) of the words. Although the 5 words may get the most clicks and impressions, they may also be the most expensive words with the lowest conversion rate. It may be that you'll need to pick and choose amongst the top 10 or 15 words to find those that are the most inexpensive and offer the best conversions.

CTR & Daily Budget

Your daily budget also has something to say here. Let's say you have two keywords that have the same CTR and conversion rate, which are quite acceptable. But one has an average CPC of $0.50 and the other of $1.00. In this case you can receive only half as many clicks from the more expensive word and, since the conversion rates are the same, this means half as many sales. In the real world you'll have to check that both these words have enough potential clicks per day to satisfy your budget but this is quite often the case.

Effect on Account Performance

Many users don't appreciate that poorly performing keywords (and ads) have a negative effect on overall account performance and, ultimately, the CPC of your keywords. There is little point in having a keyword within a group that has great performance if there are another 200 in the same group that are terrible. Ad group keyword lists should always only contain words that have an acceptable performance, all others should be removed.

All of the above

So, there's a lot to think about, but if you take one thing away, it's that all the advice you'll see from professionals and Adwords themselves, is that keyword lists per group should really be in the range of 10-50 words at most. If you think you need much more than this, it's worth considering why...