Why pre-paid Adwords is dangerous

If you run Google Adwords Pay Per Click (PPC) campaigns you have a choice of payment methods.  You can choose either to:

1. Pre-pay a certain amount, which will be used until it runs out.
2. Pay as clicks accumulate, working within a daily budget you set.

Pre-paid allows a bit more flexibility and can be useful when ‘testing the water’.  However, we never use it because we think it’s potentially damaging to business.  The graph below demonstrates why …

What that graph shows is a PPC campaign that was pre-paid by the client (against recommendations).  That client gains about 20 clicks per day and they have a conversion rate of roughly 25% leading to enquiries.  So, 5 enquiries per day, which typically lead to 3 sales per day, each worth roughly £200-300 profit each.

This particular client doesn’t pay Custwin a maintenance contract for their PPC campaign (we created it efficiently and then the client took it over) and so we are not in a position to monitor it.   A few days ago they contacted us to say their enquiries had dried up so we took a look.

What had happened was that their pre-paid balance had run out and the email reminder sent to them had ended up in their junk mail.  The graph shows that 8 days of clicks were lost, which equated to a loss of an estimated £4,800-£7,200 profit.   As you can see, after we identified the issue, their clicks started again and the enquiries started happening again instantly.

While we don’t expect all clients to want to utilise our skills and checking systems beyond having created a PPC campaign, this example shows that the client lost profits that would have covered our costs for the next 2 years!

The strange thing is that even after highlighting the issue, the client still wants to pre-pay their click costs and so the same thing could happen again in the future.

Our advice to anyone running PPC campaigns is to set a daily budget post-paid, and let Google take their fees when they need to.  But even then, still have a process that allows you to constantly watch how many clicks you’re getting each day (this can be automated) so that you quickly pick up on whether anything has gone wrong (for example, a credit card expiring).

Google Adwords CTR: Is Higher Better?

For those that don’t know, CTR means Click Through Rate.  It’s the number of times your Google Adverts get clicked on, compared to how many times people see your advert appear in the search results.

So, if 100 people type ‘buy widgets’ into Google and your advert appears on the page somewhere, if 1 of them clicks on the advert that’s a 1% CTR.

Getting higher CTR is important in Google Adwords campaigns but it’s something that Google capitalise on because they’ve created a system that gives better positioning to adverts that have higher CTR’s, which isn’t necessarily good for the advertiser or the searcher.

Take the following advert for example, which could appear when people type the phrase ‘buy widgets’ …

If you wanted to buy widgets and you saw that advert then you’d likely click on it.  Let’s say that 5 out of 100 people do that, which would be a 5% CTR.   That CTR may well be stronger than other competitor adverts, which (along with some other factors) will help it to have higher positioning on the search results page.

So, let’s say that 50 out of 1,000 people click on that advert and those clicks cost £2 each.  That’s an expenditure of £100 and a CTR of 5%

However, what if the widgets on the website cost £100 each?   Many of those 50 people wouldn’t want to pay £100 per widget and they’d feel that they’d wasted their time clicking on an advert leading to widgets that cost too much.  End result: £100 spent on clicks leading to very low numbers of enquiries/sales.

So let’s see what happens if we make the advert more specific …

This time, when people search for ‘buy widgets’ they see an advert that’s practically identical except for the title line, which clearly shows they cost from £100 each.    Many people searching for widgets would be looking for cheaper widgets and so won’t click on the adverts.  So, using the same numbers, let’s say that only 10 out of 1,000 searchers click on the advert.  That may still be an expenditure of £100 and a CTR of 1%

The benefits of this are that, although clicks are lower, the potential to be buyers are higher, because they know these widgets cost from £100.  So although numbers are lower, conversions to enquiries/sales are likely to be higher.

The downsides of this are that the CTR isn’t as strong as the generic advert, which means that Google penalises the advert (including making the advertiser pay more cost per click because the CTR isn’t strong enough).

The way the Google Adwords currently works is that adverts with stronger CTR’s will get higher positioning.   According to Google, if people are clicking on an advert at a good rate then it must be a good match to the search phrase.  That is utter rubbish – it just means that the advertiser has hooked someone in, but that person may then be a lost potential buyer because the website itself doesn’t appeal to them (e.g. offering widgets for £100).

The end result of a searcher clicking on adverts that don’t have an accurate enough relationship to the website they land on, is a searcher that becomes disillusioned with PPC adverts and so is less likely to click on them in the future.   The advertiser also loses out because they’re paying for wasted clicks.

Google win short-term because they know that people are forced into trying to get high CTR’s in order to get better advert positioning.  This means that people have to be more generic about their adverts in order to hook people in.

The Google Adwords ranking system isn’t what it needs to be.  Personally, I think the whole concept is flawed and not in the full interests of advertisers or searchers (see the previous blog for more information on alternative thoughts about how search engines should position companies in search results).

But there could be other ways that are a halfway house.  Perhaps, when people have clicked on adverts and then click back to Google search results, there could be a box (optional) appear that asks the person to grade the relevance of their click to what they found, including the option to insert comments.

Taking that concept, if you searched for ‘buy widgets’, saw the generic advert appear, and clicked through and were disappointed to find they cost £100 each, you would grade that website low and may put a comment in about the costs of widgets.   Alternatively, if you saw the advert that referred to the £100 per widget costs, didn’t feel conned through the click you made, then you may give that website a higher rating, even if you didn’t buy from them.  The end result would be that Google gives higher positioning to the advertiser that gets the stronger ratings from those who have visited the website.

That’s just covering the basics and there would be lots of other issues to consider (e.g. people trying to ‘fix’ the system) but the basic concept is to let the position of adverts be decided not by the CTR (plus some other factors) but by on something that works more intelligently.

If you’re a Google Adwords advertiser and you feel that your CTR is quite good, but you’re not getting results from those clicks, it may be worth digging deeper into why that is.  On the reverse side of the coin, if your CTR isn’t good and you’re tempted into raising your positioning then please tread carefully because the only winner from mistakes you make will be Google, who certainly won’t tell you that you’re spending money unwisely.

Why you need webstats as well as PPC

Google Adwords campaigns – they’re great aren’t they?  Just set them up and wait for all the lovely people to search for phrases and click through to your website when your adverts appear.

Except when something goes wrong, as can be demonstrated with a real example …

A client rang me asking if there was a problem with the PPC campaign.  He wondered because he has the foresight to check his webstats regularly and they were showing him that on that day the number of visitors was way down on a typical day.  He spends a lot on PPC advertising (typically about £1,000 per week) and so it’s vital that his clicks get him results.

I looked at the PPC campaign and it showed that on the day he had received many more website visitors than his webstats was showing him.   So I went to his website and found that it had a problem that needed urgently fixing (which he passed onto his web developer).

The Google Adwords system will let you set up various alerts but there’s some things it doesn’t pick up on quickly – one of those is when the landing page from the advert isn’t working properly.  It could have been a few days before the Google Adwords system threw up an error and in the meantime it would have been sending clicks to a black hole.

It’s fortunate that this particular client is amongst the minority who ‘gets it’ that it’s vital to keep a close eye on website statistics.  Admittedly, the purpose in his case is to keep finding opportunities for refinement but on this occasion it saved him what could have been a few £hundred in wasted clicks because the situation could be rectified quickly by being on the ball.

Apart from this specific application of webstats tracking being useful (which, to be honest, is a rare problem to have), it’s really useful to help you get proper insights into what types of clicks your PPC campaign sends you, and it’s not unusual to find issues to resolve if the PPC hasn’t been set up properly in the first place.

Google Adwords Geo Targeting Change

Google never cease to amaze me with their greed and stupidity.  The latest example is a change they’ve made to the way you can target your Google Adwords adverts geographically.

This is best demonstrated with an example.  The screenshot below shows a Google advertiser who only wants their adverts to be visible in certain locations – those within the shaded geographical area …

Currently, they can do that but as from the end of 2011 they will only be able to target via a radius around a location and, as from recently, no-one is allowed to create a custom shape visibility area.  So, as from later this year, if they want to still cover all of Kent and a bit into London then they will need to choose a different base location and have a radius of 35 miles visibility.

The screenshot below shows the best case scenario (the circle overlaid onto the current visibility), which means chopping out visibility in parts of Thanet in Kent, and being much more visible into Sussex and parts of Essex.   It still covers much of the desired target area but also covers areas that the advertiser doesn’t want to have their adverts visible in.

But wait, there’s an option to ‘Exclude areas within selected locations’ which is supposed to let you stop your adverts being visible to certain areas within your radius.   That sounds great – the potential to exclude Basildon, Hastings etc.  The reality is that when you click on that link it tells you ‘None of your selected locations include areas that can be excluded’, which basically means that Google hasn’t properly thought this through.

So why the changes from Google?   Google Adwords is the lifeblood of Google and it’ll do anything to make more money from that and so this is just another insult from Google who are effectively saying: “hey, previously you could make your adverts visible however you wanted to but now, because we make more money from your adverts being clicked by people in areas you don’t want to be visible in, we at Google will make more money and you’ll lose out”.

It’s an extremely dumb move by Google – yes, they’ll make more money short-term but when Adwords advertisers realise how much of their clicks budget is being wasted, they’ll focus their marketing budgets elsewhere.

Google Adwords Quality Score explained

It’s time to clear up a misperception that many people have …

Appearing high in the Google Adwords (Pay Per Click – PPC) listings is NOT all about how much money you offer per click on your advert.

Years ago you could keep offering Google more money and they’d position you high accordingly.  The highest bidder won.  For some time now though it’s been all about the quality, which is where the Quality Score comes in.

Google wants people to click on adverts but it also wants searchers to like what they find on the website they click through to.  For each keyword phrase and advert you have set up in a PPC campaign, Google is looking for the following …

1. Does the advert get a reasonable level of clicks when people search for keyword phrases that make that advert visible?
2. Is there a good match between the keyword phrase, the advert, and also the landing page of the website that the searcher would click through to?

Quality Score goes up to 10/10 but when a PPC campaign is initially created, Google tends to give you between 4/10 and 6/10.   As time progresses, the system will be looking at your rate of clicks (plus other factors) and if that rate isn’t strong enough then your Quality Score may be penalised, which means that you have to pay more money for the Google system to list your advert.  It’s like a smack on the wrist – if your advert isn’t strong enough, or high enough in the listings, then people won’t click, which implies that it’s a poor advert or the budget isn’t good enough … so you get penalised.

By default, Google Adwords also doesn’t show you the Quality Score column, which means that you don’t know what score each keyword phrase is getting.  Many PPC novices fall into this trap, finding that advert positioning isn’t high enough so they keep raising their click budgets, totally unaware that their Quality Score is the problem.

It’s another of those ‘Google things’ that’s a bit odd.  You’d think that it would be better business for Google to make it much clearer what people need to do within their PPC campaigns to make them more successful.  Included in that would be a much more upfront explanation about Quality Score.  By being ‘kinder’ Google would have advertisers that run their campaigns more efficiently and so become longer-term advertisers.  Perhaps though it’s easier money for Google when people blindly increase their costs per click, even though long-term they’ll stop using PPC advertising because they believe it’s not a good return on investment.

So here’s the quick guide to what you need to do when first setting up a Google PPC campaign …

1. Start small – create a small campaign focusing on very few keyword phrases.
2. Ensure that there is a strong link between the keyword phrases, the advert(s) created, and the landing page of your website.
3. After making your campaign live, go into your Ad Group and from the Columns pull-down option, tick the ‘Qual. Score’ box.  You will now see your quality score appear.
4. Over the coming days and weeks monitor your quality score for each keyword phrase.  It’ll often start at between 4-6 out of 10 but you want to see it increasing to 7-8 out of 10 and hopefully up to 9 or 10 out of 10.
5. When your Quality Score is looking good for the small campaign start to build out your campaign but always watch out for lower Quality Scores because they’ll imply that something isn’t quite right.

Got any questions about Quality Score?  Just contact us – we’ll be happy to advise you for free.

Google – cart before horse

There are various references to what the phrase ‘putting the cart before the horse’ means but it’s generally accepted that it means:

Reversing the accepted order of things.

I sometimes think that I’m living in a parallel but reverse universe because something very strange happens with businesses – they invest time and money in raising their visibility in Google.

There’s nothing wrong with that in itself of course …. IF it’s done after the important bit, which is:

1. Measure how well the website is currently performing (with existing levels of website traffic).
2. Make changes that will make it perform better (without raising the levels of website traffic).
3. Measure the improvements and make further changes until a reasonable return on website visitor levels is gained.

Far too many companies are throwing money at marketing their websites, thinking it’s acceptable for a small percentage of those visitors to convert into enquiries/business.

It’s utter madness but it’s unfortunately something that Google encourage.

Google offer a service that lets companies get telephone support (and even some PPC campaign setup assistance) from one of their people.  They’ll even sometimes throw in some clicks budget (depending on how valuable they think you are).   Everything gets set up and the clicks start, eating away at budget.   Google will provide telephone support (for up to 30 days then they tend to evaporate leaving you stuck with whatever mess you’re in).

At no point do they say “hey, Mr/Mrs Customer, have you analysed your website strength to determine how well it could convert extra website traffic into enquiries?”.

Instead they put the cart before the horse and drive traffic to websites that nine times out of ten aren’t strong enough to properly benefit from that traffic.

Over the years I’ve had numerous conversations with people who say the same thing “I thought Google would give me best advice but I ended up losing loads of money”.  Someone I spoke to recently pumped over £600 worth of clicks (with the help of Google who started them off) into a website that a monkey could tell was way too weak to get good results from extra traffic.

‘Theft’ is a strong word but there’s little difference between what Google are doing and someone selling you magic beans.

So let’s take a look at what Google should be doing …

1. Providing potential customers with a strong guide in how to analyse how well their website is converting existing traffic into enquiries/business.
2. Providing a few tips about common things that may need to be enhanced within websites.
3. Telling the potential advertiser that Google won’t give them setup assistance until they’ve gone through certain activities to strengthen their websites.
4. Getting confirmed acceptance (via a web form) that the client has followed instructions and is happy to move ahead with active promotion of the website.
5. Only then setting up PPC campaigns but even then, only allowing the client to spend a very small amount of budget (ideally, free clicks), ensuring that they measure exactly what happens to those clicks.
6. After all the above, expand out from there.

Having said that, if Google did that then Custwin would have a lot less business because that’s what we spend much of our time doing.  But it’s never going to happen anyway because Google will continue to put the cart before the horse even when it’s highly unethical to do so.

Time travelling back to the Verona opera

As part of client work we keep an eye on adverts that appear in the Google Ads and, nearly 4 months through 2011 we saw the following advert appear when we did a search on Verona Opera holidays:

Checking the calendar to make sure that it was in fact 2011 and we hadn’t travelled back in time, two thoughts sprung to mind:

1. The advertiser has outsourced their Pay Per Click (PPC) advertising and the (lack of) service provider hasn’t updated the advert to 2011 from 2010.
2. The advertiser runs their own PPC campaign and doesn’t have their eye on the ball.

If it was the former then the advertiser would have good reason to shoot their service provider because not only will an out-of-date PPC advert significantly reduce the ability to gain clicks, the click-through-rate (CTR) will decrease, which will cost the advertiser more if they want to then get a decent position (as Google will penalise if the CTR is too low).

If it was the latter (advertiser running the PPC campaign themselves) then it would imply that their attention to detail was poor.  Would YOU book a holiday with a company that didn’t pay attention to detail?   You think you’re going to Verona and end up in Bognor.

There are more signs of a poor awareness of what’s needed to win online, when you go to the landing page itself …

• Poorly scanned image of seating, not even translated.
• Page meta title crammed with all sorts of keyword phrases in a scatter gun approach that will fail spectacularly.
• Poor meta description showing no awareness of how it should be used.
• 2006 copyright in the footer.
• Focus on ABTA as a supposed sign of credibility (when people are becoming increasingly aware that ABTA gives them little protection).

Will that website owner be sitting there, wondering why they’re not getting many bookings?   Possibly.

Will they finally work out that their PPC advert is letting them down?  Possibly.

Will they maybe then go on to realise that their website landing page and organic SEO is poor?  Possibly.

‘Possibly’ is the common word here.   All sorts of companies may ‘possibly’ work out that certain things are wrong with their websites and online promotion.  But they lose a lot of time and potential business while in the meantime, their competitors just snap up the opportunities through a stronger online focus.

Google Adwords Position Preference – goodbye to bad rubbish

Although they’ve not admitted that their system was flawed, Google are getting rid of the rubbish Position Preference feature that people have been using in Adwords for ages.

The non-techie explanation of Position Preference is as follows …

The advertiser decides what position (in the paid search results) that they ideally want their adverts to appear in.   They say what they’re prepared to pay as a maximum per click to make that positioning happen and the system does the rest.  So, if you wanted to be visible in position 1 for the phrase ‘red widgets’ then you may offer a maximum of £1 per click and Google would try it’s best to position you  in top position whenever it could.

I’m really proud to say that at Custwin we have never allowed any client campaigns to use such a daft system.   It’s like saying to Google “we want to be in a certain position of the paid search results and we’re willing to pay up to £X  per click for that to happen so go ahead and make the adverts visible when YOU think that’s going to be achievable”.   So what happens is that the system makes adverts visible at all sorts of different times, that aren’t necessarily useful to the advertiser.

The biggest downside to Position Preference is that it encourages laziness in the advertiser, who thinks that they’ll get a certain advert positioning, which will benefit them.  If their website is strong enough then yes, it’ll benefit them but if the website is weak then all they’ve achieved is being highly visible, which gains costlier clicks, but those clicks don’t convert to business due to the website weaknesses.

For so long now there have been advertisers who are obsessed with being top of the PPC positions – to the point that it’s probably not profitable to do so (when comparing click costs to enquiry/sale acquisitions).  In the case of bigger companies, that’s been going on for years.   It didn’t matter to them that no-one was analysing what results were being gained from such high positioning and costly clicks – it was just important to be seen to be top and if the Adwords Position Preference system let them do that without much effort then so be it.

There have also been PPC service providers who have charged clients to set up campaigns, allowed those clients to dictate that they always want to be in a certain advert position, and have allowed the client to do so.  This happens even in cases where it makes no sense because the actual website (from the clicked advert) is not strong enough to convert clicks to enquiries at a sufficient rate.

What should the PPC service providers do in such a case?   Tell the potential client that it’s not worth the money to pay for a certain position dominance in the paid search results.

What happens in practice?  The PPC service provider just wants to earn a crust, lets the client make that mistake, and ultimately, down the line, loses that client because someone (e.g. Custwin!) tells them that they’re generating expensive traffic to a website that won’t convert at a sufficient rate.

So it’s great to see Position Preference disappear (although there is another tool available which does similar) because it should shake up the working practices of some PPC service providers.

Here at Custwin we’ll keep going with the same methods that we have always used:

1. If a client website isn’t strong enough to convert, tell them and discourage use of PPC advertising until it’s been fixed.
2. When it’s fixed, invest in PPC that doesn’t go for top position but still attracts enough visibility to gain clicks that would be cheaper than top position.
3. Measure results from those clicks and if the website is proving strong enough then further increase the PPC advert positioning.

Using competitor names in Google Adwords

A recent court case involving Marks & Spencer (M&S) and Interflora has brought to the fore the question about whether you can use competitor names as keyword phrases when advertising with Google Adwords.

As the article on the ebizlaw website explains, M&S had used the word ‘Interflora’ in their Google Adwords campaign so that when people typed ‘Interflora’, an advert for M&S came up in the search results.  The article goes on to explain that because Interflora have a trademark on their name, then M&S may have been in breach of that trademark.  However, there is yet to be a full European Court of Justice ruling so nothing is yet binding.

Google takes the viewpoint that it’s not there to police which trademarks can and can’t be capitalised on.   It does take a dim view of advertisers who actively use the trademark in the actual adverts, but doesn’t have such a strong view on whether the keyword phrases are linked to adverts.   So, Google wouldn’t be so impressed if someone typed ‘Interflora’ and saw the following advert:

Looking for Interflora?
M&S Flowers Online – Order by
6pm for Next Day Delivery.

But it wouldn’t have a problem with:

M&S Flowers Online
Beautiful Fresh Flowers & Plants.
Order by 6pm for Next Day Delivery.

With the recent court case not being binding, M&S are currently still able to advertise using the advert above when people search for ‘Interflora’, as you can see below:

The likely outcome, over time, is that Google Adwords advertisers will not be able to use competitors trademarked names to make adverts appear for themselves.  So, when typing phrases such as ‘Interflora’ in the future, you won’t see any paid adverts appear for Interflora, other than companies they may allow to capitalise on their trademark.

The key point here is that it’s all about a company name/product/service being trademarked.  Google doesn’t care too much about your trademark – it just wants to pull in advertising revenue and so it’s convenient that it just effectively says “get your lawyers to sort it out, we just provide a platform to advertise on”.  If you, or your competitors have got a name/product/service that’s not trademarked then your competitors can freely have adverts appear in the Google paid listings, whether you like it or not.

This is where it becomes important to choose your name/product/service carefully because you need something that can actually be trademarked.  If, for example, you’ve called your company ‘Jet Hire’ then that’s not going to be something that you’ll be able to trademark.

Depending on the outcome of the Interflora/M&S case we’ll likely see further developments in this area – starting with the major brands stopping others from using their names/products/services in their Google Adwords campaigns and then filtering down to smaller brands.   I believe that within 3-4 years we’ll see an increase in legal services providers and trademark professionals targeting companies who will be experiencing their competitors advertising under their names within Google Adwords.  There will be many telephone/email conversations along the lines of:

“Did you know that many of your competitors are capitalising on advertising under your company name of Big Red Widgets?   We can help you trademark your name and stop that happening”

In the meantime, any company that’s not actively taking advantage of the slack rules on using competitor names/products/services, should perhaps be making hay while the sun shines.  As long as you don’t use the competitor name/product/service in the actual advert text, and ensure that the Google system thinks there’s a relevant link between that name and what’s going to be found on your website, then great results can be gained.

What PPC enquiries may tell us about the economy

Anyone can set up a Google Adwords account.   But the system allows most people to ‘get it wrong’ and the end result is wasted budget.

We’ve been noticing an interesting pattern – we’ve been seeing a gradual increase in ‘from cold’ enquiries from companies needing help with their PPC campaigns.   We have a Google Adwords account but it’s not something we make a lot of use of.  It’s been the same campaign for a long time now (years) and, being as busy as we are, we’ve not found it necessary to boost it up in any way.    But things started changing over recent months …

It started with the odd enquiry each week coming in via the PPC campaign, then starting to increase to be more frequent.  It’s now at the point where 5 enquiries have been gained in the past week.  From speaking to those enquirers the message is the same every time:

“We’ve got an Adwords campaign but it’s costing a lot of money for results that aren’t good”.

Putting aside the fact that many of the enquirers websites weren’t strong enough, there will be issues with the actual PPC campaigns.  Nine times out of ten there are the same old mistakes being made.   Where it becomes interesting though is when people say that they’ve had their PPC campaigns running for long periods of time but it’s only now that they want to do something about it.   I call this the ‘economy effect’, which is worth explaining more …

People in business use a range of marketing methods and while business is good or trickling in, they’re reasonably happy because they’re surviving.  However, when other external factors kick in, they become more aware.   The economy is suffering and people have less money to spend.  They may click on PPC adverts but in more cases they’re not in a position to buy at that stage.  They may also be searching in lower numbers and so the PPC adverts don’t get as many clicks as in the past.  The end result is that the company who is suffering from lower levels of business, starts to look at their marketing and so PPC, being a particular cost, is usually high on the list to focus on.

In short, their perception is that their PPC campaign isn’t working.   In most cases that’s true, and things can be fixed to make those campaigns much more effective, but the reality is that their PPC campaign has been underperforming for some time but it just wasn’t so noticeable until the impacts of the economic woes started to have a knock-on effect.

It’ll be interesting to see if we continue to get these enquiries from companies that aren’t getting the results they need from their PPC because it would appear, based on recent weeks and months, that the tougher the economy gets, the more companies are looking at what they’re gaining from their marketing investment.