TAKING THE RIGHT PATH TO PPC SUCCESS

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1 TAKING THE RIGHT PATH TO PPC SUCCESS ADIDO WHITEPAPER FEBRUARY 2015

2 PPC OPTIMISATION WHITEPAPER - 1 INTRODUCTION By Suzana Bulearca Digital Marketing Account Manager, Adido. DO YOU FEEL LOST WITH YOUR PPC OPTIMISATION PLAN? If you are a PPC manager, either company or agency side, then you will most likely face one of these two situations: 1. You are aware of too much information, there are too many possibilities, options, features, too much data available that you could work with to improve your account. What do you choose to do, with just 24 hours in the day and, more often than not, a finite budget, to get the best value out of your actions? 2. You think PPC management is easy and you can control everything. Why does your account not perform as well as it could then are you missing a trick? Digital is such a fast moving environment that no one can conceive to stay on top of everything but the trick is not to know everything, but to know and apply what is the most important and the most beneficial to you at any one point. The famous rule is the principle that helps us filter through everyday decisions, personal or business related, and indeed PPC related it s the road in the middle that matters. This road is going to bring you the most benefit for your effort and everything else just becomes a distraction from your core objectives. This is why I think going back to basics in PPC management is something worth writing about. To bring back into the spotlight the simple, yet essential PPC management factors and to make sure you really understand these factors, their interrelationships, and how to apply them to ensure your success.

3 PPC OPTIMISATION WHITEPAPER - 2 CONTENTS Market conditions Ad rank Quality score Click through rate Max bid Impression share Average position Average Cost Per Click Potential traffic What next? About Adido

4 PPC OPTIMISATION WHITEPAPER - 3 MARKET CONDITIONS AND WHY THEY ARE CONSTANTLY CHANGING Everyone is competing in an environment with high competition from very similar players. Sometimes you will be the leading brand, with the highest market share, brand recognition and big budgets. You are still focused on performance, but you can manipulate the game more than your contenders can, and getting burned won t hurt as much. But you can also be the challenger, trying to make the most effective decision for your buck, whilst also improving your brand awareness and trying to please the different stakeholders. In this case, you will be very sensitive to changes in the market, and your competitors changing their strategy will likely have a significant impact upon your performance. compare has become a significant search player in areas such as the finance industry) will affect everyone in the market. Both are factors that more often than not receive less importance than they actually have. Most people like to think that they are masters of their own destiny. They like to think their results will not be impacted by things like the market, competitors, or any other external force does anyone remember saying things like seasonality and weather weren t good enough arguments for poor performance? Then we have Google. Google is the actual space we all play in for search, and at the moment they dictate the rules of the game. Their decisions related to how search works across devices (think enhanced campaigns), how to display results in the search page and how they themselves want to compete (Google

5 PPC OPTIMISATION WHITEPAPER - 4 MARKET CONDITIONS AND WHY THEY ARE CONSTANTLY CHANGING In fact, if we think about Google as what it essentially is a stock exchange things will become much clearer. It s about trading clicks So in this extremely complex market, there are a variety of levers that we can pull to try and create more favourable conditions for ourselves, but just a few are of essence as they impact the metrics we care most about, cost and benefit. buying and selling, prices fixed by demand and supply, manipulated perceptions that can then cause a financial disaster, unrelated events (apparently) like the pass of a law, a rainy day or Wimbledon, that can make or break one s performance.

6 PPC OPTIMISATION WHITEPAPER - 5 AD RANK ITS IMPORTANCE IN DETERMINING AD POSITION Ad Rank is Google s calculation to decide whether ads should appear in an auction, and which position they should get. It is a factor of quality score, bid and ad extension performance. Ad Rank is not a metric you can see in Adwords, and it s also not a metric that can easily be calculated. This is purely because QS is not as plain as we see it in the system, and ad extension performance doesn t have a visible, quantifiable representation. Historically, Ad Rank used to be taught as a simple formula whereby your max CPC bid is multiplied by your quality score. Your ad rank is then used to benchmark your performance against competitors, and determine a final CPC cost and ad position. However, many people have tried to infer, with Google s guidance, what their Ad Rank is, what competitors ad ranks are, and therefore what they should be paying per click. From my tests, this calculation has always been off, by at least Lesson learned: Don t think you can outsmart or fully comprehend the system, it s much too complex; Google would have been out of business years ago had it not kept it so. The Ad Rank formula has also been updated in the last six months to take into account the expected performance of your ad extensions and formats. More on these features a bit later. In order to improve your Ad Rank you need to do one of two things: Increase your keyword bids Improve your quality score The most important thing to remember here about Ad Rank is that it s impacted by all the core KPIs and features available in Adwords, and it has a crucial bearing over Impression Share, Avg. Position and Actual Avg. CPC.

7 PPC OPTIMISATION WHITEPAPER - 6 QUALITY SCORE GOOGLE S ADWORDS ALGORITHM Quality score (QS) usually creates the most confusion, but it can actually bring quite a few rewards if understood correctly. QS is a measurement of how relevant your ads, keywords and landing pages are to the person seeing your ad. It is shown in Google Adwords on a scale of 1 to 10. Google were apparently going to remove this number as it was too simplified, and created frustration and aggravation amongst advertisers, but for now, it should be used as a guide rather than a definitive number. Nonetheless, there are a few factors which we know for certain have an impact, and most of them are in our control or we can influence to some extent QS is determined by a myriad of things. Unfortunately, Google will never divulge all of them as it s the reason why their search engine became #1 in the first place! Before we go into what we do know about it, I will tell you that even though you may see a QS of 9 or 10 in the Adwords system, it is actually way more complicated than that.

8 PPC OPTIMISATION WHITEPAPER - 7 QUALITY SCORE FACTORS THAT IMPACT QUALITY SCORE 1. HISTORICAL ACCOUNT PERFORMANCE Historical performance of your keyword, your ad groups, your campaigns and the overall account performance has a known impact on QS. click essentially, therefore you re wasting money. Google hates that, because in the long run, it will mean the user perceives Google as a search engine showing misleading and irrelevant results, so they will stop using it for their search needs. Mistakes at the account set up stage can cost you money even after three years of performance, so being intelligent with your account at every stage will help. 2. LANDING PAGE RELEVANCE & PERFORMANCE If your ad says you sell red sandals but you send to a black boots page (at best), Google recognises there is no relevance. Therefore, common sense dictates there is also no relevance to the user, so not only does your QS suffer, but so do your bounce rate, conversion rates and all other efficiency metrics. You re wasting a If you think you are showing your best landing page but are still not scoring highly with Google, it might mean that it s not your most specific page for the query, or it s not the best there is (did you check your competitors recently?). Every PPC specialist should be very concerned with landing page optimisation and have a mind for user experience and optimising users paths to conversion.

9 PPC OPTIMISATION WHITEPAPER - 8 QUALITY SCORE FACTORS THAT IMPACT QUALITY SCORE 3. KEYWORD RELEVANCE This is another factor which you can influence. Keyword relevance first impacts your Click Through Rate (CTR), which then impacts your QS. So next time you consider wiping out the market with a generic broad term, just in case, think again. The best rule is to be as relevant as possible to users search queries, right from the beginning of your account setup. I m not saying add long tail 9-keyword terms from the start, but using the various keyword planning tools available, research users problems and questions and understand how they like to describe your industry s products/ services (which might be completely different to how you describe it), and add those terms in. That s your initial keyword list, which you can then start to build on as time goes by. Using different match types is crucial, but remember that even if you go broad, you have to make sure it s very relevant. 4. AD RELEVANCE This is another string to our bow, and yet another factor that impacts CTR first and then QS indirectly. You ve first established which search queries your business is relevant to. Now you just need to say, in a clear and concise way, why your business is the most relevant and will offer the most benefits to the user. Don t try to be smarter than you need to just sell your business. If it s as good as you believe it is, it will work. Don t try to be misleading, you will spend money on clicks but not generate any conversions...

10 PPC OPTIMISATION WHITEPAPER - 9 QUALITY SCORE FACTORS THAT IMPACT QUALITY SCORE 4. AD RELEVANCE CONTINUED What if you can t find a USP to shout about? Then objectively, your business is in trouble long term. With an uncompetitive product, you will soon see diminishing and eventually no returns. If you don t have a strong positioning purely because you haven t thought about that yet, you need to stop, create a good brand strategy, and then re-enter the market. Otherwise you ll be stuck in the middle and back to square one. B. Bring in high value clicks only (for example deterring existing customers from clicking) At this stage it becomes a balancing act between the benefits QS can bring and the profitability gains of qualifying your traffic better usually, the latter should win. Overtime, you start to make decisions on whether you want your ads to: A. Bring all the clicks it can (higher CTRs deliver better QS)

11 PPC OPTIMISATION WHITEPAPER - 10 QUALITY SCORE FACTORS THAT IMPACT QUALITY SCORE 5. AD EXTENSIONS I have left this one as a separate area because it has become much more than just a nice feature in Adwords. This is a crucial change, and whilst for a while I was just interpreting it in the usual way (A Google threat of get ad extensions or else ), more recently I have come to understand the wider implications of this change. Until last year, ad extensions were enhancements to your ad to help your brand stand out on the search page. They did this by improving your CTR and increasing conversion rate by directing people to a specific landing page on your site, either closer to conversion completion or showcasing benefits that aid in choosing your product. They still do that, but in addition they have started to become part of the ad rank calculation in other words, ad extensions now help Google decide if your ad should show, which position it should be in, and how much you should pay for a click. It occurred to me that you only get ad extensions in position 1-3 (unless you have G+, or location, or review extensions, but that might not always be possible or relevant to you). So if you re not in those top spots, and these other options are not available to you, then you re pretty much doomed to have a lower Ad Rank than your top peers, and therefore you ll need to pay more for a click. YES, even if you have a QS of 10/10 - I have seen this on real accounts! SO WHAT ARE YOUR OPTIONS IN THIS SITUATION

12 PPC OPTIMISATION WHITEPAPER - 11 QUALITY SCORE FACTORS THAT IMPACT QUALITY SCORE 5. AD EXTENSIONS CONTINUED So what are your options in this situation? A. BID HIGHER FOR TOP POSITIONS You can look to bid higher and get to the top spots, which will help you get the ad extensions, at least the sitelink ones, almost guaranteed. or should I appear just 20% of the time in top positions? This is an analysis which you have to undertake by weighing the benefits in cost vs. volume at different positions and impression share levels. B. GET EXTENSIONS TO SHOW ON RIGHT HAND SIDE This might not be a viable option though, depending on your budgets, the competitiveness of the market, and your business targets. The consideration is: should I spend my budget to be in position 7, 100% of the time, You can look to try and get the extensions that could also appear on the right hand side. Google+ extension Location extension Seller Ratings extension

13 PPC OPTIMISATION WHITEPAPER - 12 QUALITY SCORE FACTORS THAT IMPACT QUALITY SCORE 5. AD EXTENSIONS CONTINUED Ultimately, G+ is a must these days, notably for SEO benefits, and if it is to be of value you need to have a good number of followers, rather than merely a presence. Location might not be relevant if you don t have a physical presence, but reviews are definitely relevant to any business be it product or service, everyone looks for trust cues, and personal recommendations are the most powerful of all. extensions performance are part of the Ad Rank calculation mainly because they represent a factor of relevance to the user, and a good relative CTR is one of the best indications of relevance. The next section looks at just how important CTR is and how to achieve it under a good marketing strategy and not just for the sake of it. C. IMPROVE CTR You can look at improving your CTR outside of ad extensions or ad copy. Ultimately, both QS and ad

14 PPC OPTIMISATION WHITEPAPER - 13 CLICK THROUGH RATE OBSESS ABOUT IT FOR THE RIGHT REASONS Click through rate (CTR) is a complex metric in the Ad Rank calculation, as it impacts and is impacted by many factors in your account. It s not something that can be controlled directly; it s something many marketers obsess about, but most often for the wrong reasons. From the keyword and ad relevance aspect it should be clear why CTR is impacted the more relevant your keyword and your ad are to the user s search query, the more chances you have to receive that click. In terms of context, it s all about the recent developments in Adwords location, time of day, offers and device. With targeting and ad extensions, you can now be smarter about understanding and being relevant to user s context. For example: I m at home wanting a cheap pizza, if you show me an ad that says you are based in Bournemouth, do delivery in my area, have great pizza based on people s ratings, which is also cheap, plus you can give me a 2-for-1 deal, I m likely to click, and convert. If you show me an ad that just says you have pizza, but I have no idea who, where and how good you are, you are unlikely to win my click unless every other competitor is like you. Ad extensions also have the merit discussed beforehand, in that they showcase benefits that aren t possible on the main ad because of length limitations. This helps position the brand better, especially on enhanced ad extensions (see picture on right) or direct to a more specific, and therefore more relevant landing page that could entice people to click (and then convert).

15 PPC OPTIMISATION WHITEPAPER - 14 CLICK THROUGH RATE CAN YOU ONLY HAVE A GOOD CTR IN A HIGH POSITION? The interesting relationship is between avg. position and CTR. Studies have shown (and you have probably seen this in your own accounts) that the better your position, the higher the CTR, especially for those top spots (2 or 3 depending on the search landscape). This is even more dramatic for mobiles, where you are either top or bottom of the page. For one of my clients, CTRs have varied from 3 to 10% in such situations. CAN YOU ONLY HAVE A GOOD CTR/ QS IN A HIGH POSITION? One myth regarding position/ctr/qs is that you can only have a good QS in a high position, since you can only have a good CTR in a high position. position and to the industry. So if your industry never gets more than 2% CTR, even in top positions, however poor you think that is, it s your industry norm and it will be treated as best in class. Conversely, if the industry standard for position 6 is 3% and your CTR is 6%, then you are above standards and will be rewarded a good QS, even in that position. But obviously position will improve your CTR, and enable you to get more clicks if budget isn t an object. So, in theory, all other things equal, you should want a higher position. This is not actually true (tried and tested!), since Google will calculate your QS by normalising CTR to

16 PPC OPTIMISATION WHITEPAPER - 15 CLICK THROUGH RATE BRAND BUILDING HELPS CTR BRAND BUILDING HELPS CTR QS 10/10 is not the holy grail we used to think it was; the actual number that the algorithm uses is much more complex, and therefore you could end up with a QS 10/10, a similar bid but an Ad Rank lower than your competitor s. This will be influenced by CTR - CTR either coming from good ad extensions, or from good ad copy, or from something else. This something else is the synergy of channels and brand touch points; it s the halo influence of other channels; it s the brand awareness concept; and it s the object of attribution models. With so much choice on a search page, what makes you, as a searcher, choose? It could be shiny stars, ad enhancements, and other such gimmicks. It could be price, or the best offer, or the most relevant product. Or it could be the brand you know, the brand you trust or can recall you ve seen them on TV, heard about them on the radio, seen banners, seen them on Facebook, your friends were even talking about it. Whichever the source, there were other touch points that did a good job in positioning that brand in your consideration set, and it is thanks to them that you now decide to click on that brand s ad, even if it s at the bottom of that page. The long old saying is ever so true feed the funnel at its upper end to have results dripping at the bottom. No feeding, and you can still compete at the bottom, but it will be tougher, as you have to be extra smart with everything you do to stand out, and even that might not help.

17 PPC OPTIMISATION WHITEPAPER - 16 CLICK THROUGH RATE BRAND BUILDING HELPS CTR Why do you think Coca Cola, McDonalds and all these companies have been doing advertising for such a long time, continuously, relentlessly? They understand the importance of always being on that consideration set, so that when the moment of decision comes, chances of them being the chosen brand are exponentially increased. Just a few weeks ago I was approached by an energy company to switch through a direct mail piece. It seemed like a good offer, but I wasn t convinced. Later on I saw a poster while going to work, which reminded me of them. I then heard a radio ad and I decided to give them a try. I saw them on comparison sites, with good reviews, I saw them on PPC and I visited their site. I compared their offering and it wasn t the best decision for me, so I didn t change, but it was close. What a long user journey, across online and offline platforms, sadly for them with no positive outcome. This is the truth of how we decide things nowadays. Presence of your brand at every stage is not an option; it is a necessity if you want to stand a chance in the conversion moment. DON T OPTIMISE TO ESSENTIAL EFFICIENCY AS THIS STUNTS GROWTH Always think about the rule. Start with your harvesting channels search (paid and organic), and direct (your site). Do them well enough, but don t get lost in the superadvanced refinements, they will be too much effort for too little benefit at this stage.

18 PPC OPTIMISATION WHITEPAPER - 17 CLICK THROUGH RATE DON T OPTIMISE TO ESSENTIAL EFFICIENCY AS THIS STUNTS GROWTH DON T OPTIMISE TO ESSENTIAL EFFICIENCY AS THIS STUNTS GROWTH HEALTHY VS. UNHEALTHY CTR OBSESSION: QUALITY VS. QUANTITY Go on to the next level social, , direct mail. Here you can be closer to the decision point, and so influence opinions, or you can be at awareness stage, and so create a great positioning from the start. The healthy CTR obsession is wanting to be the most relevant brand, recalling on that mental consideration set, standing out from your peers and not paying through the roof for a lower position than your competitors. Do them well, but again don t get lost in super enhancements yet. Then go higher display, and traditional media. These will feed your funnel with prospects and will create familiarity with your brand. Maintain this relationship and you ll be the most clicked brand in position seven you ve ever seen Have you seen As seen on TV in ad copy?. The unhealthy CTR obsession is caring only about the clicks good quality, bad quality, and existing customers when repeat purchase is not relevant. Ultimately you pay for a click, so you will want a good quality click that has a chance to lead to a conversion. Even if your objective is traffic, you will still only want a relevant audience to reach your site, otherwise you ll be wandering why bounce rate is high, time on site is low and engagement with your content is poor.

19 PPC OPTIMISATION WHITEPAPER - 18 MAX BID THE PRICE YOU RE PREPARED TO PAY HAS A HUGE INFLUENCE ON PERFORMANCE Max CPC bid is the maximum amount you are prepared to pay to get a click. This is not what you will actually end up paying, since this will be impacted by your competitor s activities as well as by your Ad Rank as discussed so far. But it does influence Ad Rank and it s the single most accessible tool we have. Try talking to any Google rep for whichever issue you might have, and you ll most likely hear try to increase your bid or improve your QS. BIDS IN THEIR PUREST FORM? Bids are easy to understand. My cost per conversion target is X, so if I work back to a click based on my conversion rate I am happy to pay up to Y for a click. So I bid that or slightly higher, and it s all good. The problem is that we need to go back to our first point the market. Competitors also think the same, so they ll also bid Y or maybe a lot more. All things being equal, that means you might lose the auction, which could mean you don t show at all for that particular user and search query, or you show in a lower position than your competitor. This then impacts CTR, which impacts Ad Rank (which ultimately impacts how much you end up paying for a click), and traffic to the site (which impacts your conversion volume). So, one small decision can have one big impact on ROI. Worst case scenario is that you could end up in a lower position, paying more for a click than your competitor, and getting less clicks and less conversions.

20 PPC OPTIMISATION WHITEPAPER - 19 MAX BID BIDDING WARS THE AGGRESSIVE OPTIMISER BIDDING WARS Bidding is also associated with bid wars, especially on very competitive markets. The significant benefits of top three positions or just a pure competitor game can lead to cost inflations that drive out some players and put pressure on the ROIs of those who carry on. This is why a good analysis is always important you might not always get the best conversion rates in top positions, especially if you are a niche player on a generic industry term, since quality can be poorer. Or if you do, the increase in spend might be substantially higher than the increase in conversions/ revenue, therefore not making it profitable. My advice? Find your comfort range. Bid inflation also happens in certain market conditions, such as more people coming to the market, or having some very aggressive players that, for a while, might artificially push that market s value. Recently, with enhanced campaigns, we have all felt the inflation by device, most notably on tablets. These are conditions you can t change, and you either have to start playing by the market s rules and pay more, or exit and find an alternative strategy. In a pressured environment though, the golden rule is to be smarter to offset cost inflation smarter about your ads and CTR, smarter about on site conversion, smarter about feeding your funnel.

21 PPC OPTIMISATION WHITEPAPER - 20 IMPRESSION SHARE THE NEWCOMER Impression Share (IS) is one of the newer metrics in Adwords, one that has been more common at campaign and ad group level but is also now available at keyword level. match or Ad Rank. The first two are perhaps more easily understandable or controllable though pushing budgets (if available) or making sure exact matches coexist in the account alongside the other match types. IS is highly correlated with many factors: budget, location settings, day parting settings, language settings, match types, Ad Rank. It s definitely not a metric that has been studied in depth, but it is something that can cause a lot of confusion and seems to have introduced an additional layer of complexity to optimisation. Lost IS can be attributed to insufficient budget, exact One important thing to note though is the importance of your campaign settings on IS as a metric overall. Budget is a no brainer, but things like location, language and day parting also have a significant bearing and many people tend to forget that. When you target the whole of the UK and you suddenly go to London, your IS is most likely to increase. This means you are better at covering a smaller pie. If this is where the core of your business lies, that s a wise decision; if it s not, then you have to consider the potential pie you are losing and its benefit to your business.

22 PPC OPTIMISATION WHITEPAPER - 21 IMPRESSION SHARE LOST IS (RANK) IS A MORE COMPLEX PART OF IS LOST IS (RANK) IS A MORE COMPLEX PART OF IS. If you maximise the QS that Adwords shows, and succeed in improving your CTR above the position threshold, with or without ad extensions, then the only way to improve your Ad Rank and therefore diminish IS lost to rank is by increasing your bid. But increasing your bid means increasing your avg. position and increasing your actual avg. CPC. Tweaking constantly in a fairly stable market can allow you to eventually achieve maximum IS at a desired position, but in a dynamic market this will be more difficult. If you get instances of both IS and position increase, and it s what you were hoping to achieve, then the additional cost increase will bring you both more impressions (as you are allowed to participate in more auctions), but also improved CTR (with the stronger position), which will likely make it worthwhile until you reach your point of saturation. If however you just achieve an increase in IS, this will most likely just give you access to more impressions, but not at a cost efficient rate. So you could actually end up in a loss area, in which case accepting a cap on your volume will be the sensible solution If you want to maintain your avg. position and can t minimise Lost IS (rank) by improving your Ad Rank naturally, then bidding more will not be the profitable answer. However, taking your eye off the IS ball completely might bring you to a situation where you don t show most of the time, whereas your competitors might. Therefore you run the risk of missing out on the moment of decision for many potential customers. As always, there is a balancing act involved.

23 PPC OPTIMISATION WHITEPAPER - 22 AVERAGE POSITION AND WHAT IT ACTUALLY MEANS There are many misconceptions related to avg. position, which in turn lead to confusion and wrong optimisation. This is very important, as your position influences the amount of clicks you can get the higher you are, the better your CTR, then the more clicks you get. WHAT DOES AVERAGE POSITION ACTUALLY MEAN? SEGMENT YOUR TRAFFIC TO SEE PERFORMANCE BY POSITION An important misconception is related to its name AVERAGE. Based on various factors (Ad Rank, day parting, personalised search results, localisation, competition, device, retargeting lists for search ads), Google decides WHERE to place your ad in a particular auction, IF at all. An average position of three means that you can appear in three, one, six or not appear at all for some searches. Average position is calculated in relation to how many impressions you receive at each position point. Adwords offers an interesting segmentation metric, Top vs. Other, which allows you to see how many impressions you received in positions 1-3 (top) vs. 4+ (other), and therefore how you perform in those spots. In most cases, you will see significant CTR differences, especially if you usually tend to be in positions 6+. You will also see CPC differences, and also, depending on the market and situation, you might see conversion rate differences.

24 PPC OPTIMISATION WHITEPAPER - 23 AVERAGE POSITION HOW POSITIONS AFFECT CTR & CONVERSION RATES. Although there have been initial studies that conversion rate doesn t vary by position, ads now have nowhere near the appearance that they used to some years ago. There is also a useful report in Google Analytics which allows you to see by keyword, the number of visits your site receives from each ad position. You can analyse conversions and on-site behaviour by ad position as well all useful metrics to determine the optimum ad position for your objectives. To find this report, navigate to Acquisition > Adwords > Keyword Position. HOW POSITIONS AFFECT CTR & CONVERSION RATES The enhancements on top ads are sometimes very significant, and there are studies and proof to show how ad extensions can help conversion rates. So maybe going from position six to position four doesn t help conversion rates, there s no logical reason that it should, but going from position six to position two will most likely have an impact. The CTR impact is however unquestionable and mobile can give the most dramatic impacts. This is where positions one-two can give you a CTR 3X higher than what you get in positions three - four, at the bottom of the page. The drop in traffic is significant, but the drop in CPC might not follow suit, so beware of false costsavings, on mobiles as well as desktop and tablets.

25 PPC OPTIMISATION WHITEPAPER - 24 AVERAGE POSITION DOES IT PAY TO BE IN #1? DOES IT PAY TO BE IN #1? A question that is often posed is the quality of traffic in the top spots. If you are a niche advertiser on a generic industry term, you might not be better off at the top. Depending on the term, and on who you re competing against, it s the quality of the traffic that matters, not where you sit in the ad results. Bidding solely by position is not a healthy strategy, unless you understand the other metrics involved. The useful thing to do is pick a handful of terms which are the bread and butter terms of your account. Improve as best as you can the qualitative part of your Ad Rank. Then test each position, possibly in an IS/ position combination. Analyse impacts on cost, volume and efficiency at each stage. This process will help you understand which range is optimum to maximise profitability, and also which CPC range you will need to pay. Bearing in mind the market is ever changing, be it by Google s will or because of competition, you have to stay on top of the situation by ensuring you maintain your position range. This is whilst also focusing on influencing the factors that will make you more efficient CTR, quality traffic, conversion rates and funnel feeding. This way, even if the market experiences cost inflation, you always have a profitability buffer that will allow you to compete. And don t forget to rinse and repeat search is a highly dynamic environment.

26 PPC OPTIMISATION WHITEPAPER - 25 AVERAGE COST PER CLICK AND THE FACTORS WHICH INFLUENCE IT Average CPC is the actual amount of money you end up paying, on average, per click. I have alluded before to the myths of calculating average CPCs even if you could know how much your competitors are bidding, you still have the important issue of qualitative Ad Rank, for both yourself and your competitor. Whenever I have tried to apply these widely preached formulae, I have never gotten close to reality. There are a few important things to remember about average CPC: 2) Be clear on the relation between how much you are paying for clicks, and how much you are getting from them. Again, it comes down to a cost-benefit analysis where you need to find your optimum range for profit maximisation. Within this range, you can decide that you are prepared to pay more for a higher position, or a higher IS, but always make sure you are on the profit side of the curve. 3) Going down on the page doesn t necessarily mean paying a comparatively lower avg. CPC, or paying a lower avg. CPC altogether. 1) Understand that it is an average, and using the average position logic and segmentation, you can understand how your actual CPC varies by position and IS

27 PPC OPTIMISATION WHITEPAPER - 26 AVERAGE COST PER CLICK AND THE FACTORS WHICH INFLUENCE IT In many cases, volume follows a steeper curve than avg. CPC in relation to position, which means you could actually end up paying only 20% less for 50% less volume. In other cases, market inflation has meant that the position (and therefore volume) you used to achieve with 5 avg. CPC is now no longer possible. In other cases still, your Ad Rank (and most importantly the qualitative Ad Rank) could be much lower than that of competitors, which will force you to pay a higher avg. CPC for a lower avg. position. Here enters the vicious circle of Adwords optimisation!

28 PPC OPTIMISATION WHITEPAPER - 27 POTENTIAL TRAFFIC HOW MANY CLICKS CAN YOU GET TO YOUR SITE After a long, but by no means exhaustive, journey, we reach the end of our traffic driving efforts how many clicks you get to your site. convenient path to conversion, by device, by audience type, by location, and even by channel. Testing for conversion optimisation becomes a new journey. In theory, if you got everything right upstream, you should by now be maximising available traffic for your budget and location/ time restrictions. It s now the point of further analysis. Is the quality good? If yes, there is a good chance you will have a high conversion rate. If no, then you must go back up, look at your keyword selection, negatives, ad copy qualification, and position analysis. Can you convert this traffic efficiently? Landing pages now become critical, as it s not only a matter of relevance to improve QS, but also a matter of user experience and offering the best, easiest and most

29 PPC OPTIMISATION WHITEPAPER - 28 WHAT NEXT? REQUEST A FULL PPC AUDIT OF YOUR BUSINESS FROM THE ADIDO EXPERTS My experience so far has shown that this process is crucial, and if nothing else you need to look at the core elements that I mentioned to get PPC right. There will be of course many betas, various ad extensions, formats, targeting structures you can trial, or incremental changes you can make; but most of your time should be spent optimising the core, as this will likely bring you the most benefit. Next step, think about the channels to feed your PPC before you go off squeezing the last drop of efficiency in Adwords. If you don t feed the funnel, you will soon have little coming out at the end. GET A PPC HEALTH CHECK FROM OUR TEAM OF EXPERTS. REQUEST A PPC AUDIT. The PPC audit will cover the following areas in your Adwords account*, offering insight and recommendations to improve performance. Market & consumer observations Account structure Budget & settings Location & device targeting Keywords, match types & negatives Landing pages Ad copy & extensions Beyond search References: *To conduct the PPC audit Adido will require access to your Adwords account.

30 PPC OPTIMISATION WHITEPAPER - 29 ABOUT ADIDO Hello. We are Adido, an award-winning full service digital agency. Since our birth in 2003, we have been helping brands to Do Digital Better. Based in Bournemouth, we have seen rapid growth and are a leading digital marketing and web design agency serving businesses across the UK and Europe. Our integrated and flexible approach enables us to make many big brands better online, we also help numerous smaller businesses and start-ups to grow using our innovative & cutting edge digital skills. Are you interested in finding out how Adido can help your digital business? Do not hesitate to get in contact with the team on or us on NUMBER ONE RECOMMENDED AGENCY ON THE SOUTH COAST RAR TOP (0) Twitter Facebook: adidolimited YouTube: adidotube

31 PPC OPTIMISATION WHITEPAPER - 30 OUR SERVICES CREATIVE. Web design User experience Illustration Digital branding Video Campaign planning Animation Photography Creative workshops MARKETING. SEO & PPC Social media Mobile marketing marketing Online PR Affiliate marketing Content & copywriting Video marketing International marketing TECHNICAL. Websites Usability Ecommerce Mobile Accessibility System integration Content management Extranet / Intranet Databases COMMUNICATIONS. Planning & insight Brand strategy Design Campaigns Advertising Company literature Direct marketing Promotions & incentives Events & PR

32 PPC OPTIMISATION WHITEPAPER - 31 OUR CLIENTS WE ARE PROUD TO WORK WITH AMAZING CLIENTS

33 PPC OPTIMISATION WHITEPAPER - 32 OUR AWARDS DIGITAL THAT LOOKS GOOD AND WORKS EVEN BETTER It s great when we see results for our clients, and even better when we receive recognition for our work by industry leaders. Adido is an award-winning integrated agency. Our awards prove that we can help you do digital better. We create stronger digital strategies for your business by optimising your customer s journey from point-of-entry, through to conversion and retention. This starts with designing engaging interfaces, creating visibility through search engine marketing, and developing social media platforms. Our clients see us as an online partner, staying with us long-term due to the value we can add to their digital strategy and online presence.

34 PPC OPTIMISATION WHITEPAPER - 33 KNOWLEDGE SHARING Twice a year we invite all of our clients, friends and partners to our digital marketing events Let s Do Digital. These seminars and summits are the largest free digital event of its type in the south of England. It allows us to educate our community in all of the latest digital updates, trends and strategies. Speakers from Google, LinkedIn, and Microsoft have all presented at our conferences. You can find out more about our events at "It was a fantastic day with some of the best digital speakers I've ever seen at a conference. Radian "It gave us an interesting insight into digital marketing and it was great to network with likeminded peers. Southampton Football Club

35 CASE STUDIES - 34 CASE STUDY BL Claims is one of the top firms in the UK for handling compensation claims - specialising in claims for Clinical Negligence, Personal Injury and Travel Claims. They are part of the Blake Morgan group (previously known as Blake Lapthorn) and have been solving cases for over 25 years. In what can only be described as a highly competitive market when consumer confidence can be low, BL Claims aim to remove the legal jargon from the claim and ensure their clients receive any compensation quickly and without adding additional stress or worry. The client required a specialist digital agency to work on the PPC account to assist in firstly improving the quality of the enquiries as well as the relevancy, but then increasing the volume of enquiries. Critical to the success of the activity was to deliver highly relevant visitors to the site emphasis was required on finding ways to reduce bounce rates and increase time on site. TECHNIQUES USED: Audit and understanding of the account Campaign restructure and refocus Keyword expansion Bid optimisation Ad copy testing RESULTS: 100% increase in enquiries which are also more relevant to the services offered by BL Claims 153% increase in conversion rate CTR has increased by 161% - whilst there are fewer impressions the account is receiving better qualified traffic, and more of it. Due to the quality of traffic, BL Claims have been able to invest 3x more budget in the channel & receive more enquiries. Highly organised account structure makes optimisation easier and more efficient.

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