Pay-per-Click Guide

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9 Tips for Organizing Your PPC Campaigns
In the online marketing field, search engine optimization (SEO) is generally seen as a rather wild and wooly world with unclear rules, sluggish control, and fuzzy results, while pay-per-click (PPC) advertising is viewed as a much more manageable environment. With PPC there is a sense of having your hands firmly on the controls. Here you have the ability to dial-in your traffic and tweak your results. While there is validity to this perception, anyone who has managed a significant PPC campaign knows that keeping it organized and running at peak efficiency is no picnic either. In many ways, PPC campaigns can be just as complex as SEO. While the AdWords algorithm for determining ad positions may not be quite as shrouded in mystery as the organic algorithm, several factors must be considered, including:


•	 •	 •	 •	 •	 •	 •	

The maximum CPC bid The click thru rate on the ad The relevance of the ad to the keyword The relevance of the landing page to the keyword and the ad The load time of the landing page Other landing page “quality” factors Historical performance of the keyword, ad, ad group, campaign, and account

In fact, exploring the possible permutations of your keywords is a great way to grasp the concept of “infinity”. But unlike SEO, with PPC you’ve got real cash on the line. Get sloppy and you could end up spending a boatload of money with little to show for it. The importance of staying on top of your PPC campaigns cannot be overstated. With that in mind, here are nine tips to help you tame the Google Beast and bend it to your will. (Most of these tips apply to Yahoo and Microsoft as well, but this article is focused on Google AdWords.) 1. Understand the Google AdWords structure Many people who use Google AdWords are not entirely clear on how the system is designed or why it is designed that way. But understanding the system design makes all the difference. First, it is worth knowing a brief history of PPC advertising. The original PPC system was (circa 1998), which later became Overture, which was then acquired by Yahoo. This system used a straight bid-for-position auction model.

And these are just the surface-level criteria! When you begin studying your campaign performance in AdWords you realize that there are other factors involved such as: day of the week, time of the day and geographical region. Combine this complexity with the fact that you are working with hundreds or thousands of keywords, as well as multiple text ads, and you begin to realize that PPC is every bit is involved as SEO.



9 Tips for Organizing Your PPC Campaigns

In 2002 Google introduced a new concept into the PPC model relevance. In this new model, the click thru rate (CTR) and other aspects that related to ad quality factored into the placement of the text ad, allowing the cream to rise to the top and discouraging irrelevant ads, which ultimately resulted in a higher overall CTR and more revenue for Google. This was a better mousetrap, and the rest is history. Today Yahoo and Microsoft AdCenter are both standardized on this model. In order to accommodate what they knew would be very large numbers of keywords and in order to facilitate testing that could contribute to the quality of ads, Google designed the Campaigns => Ad Group => Keywords/Ads structure that is used today. Under this model, an AdWords account can contain multiple campaigns. Each campaign can contain multiple ad groups. Each ad group is made up of up to 2000 keywords and up to 25 ads. For a search on any given keyword under a particular ad group any one of the ads associated with that ad group can be displayed. This allows you to conduct tests of which ads perform the best. The key is relevance. When a visitor searches on a specific key word or phrase, those words need to appear in the ad itself. That’s how relevance is established. And the AdWords model provides you with a way to associate specific keywords with matching ads. Thus, Google has provided a taxonomy within which you can organize and test a wide range of ads across a vast array of keywords and always show the visitor an ad that is highly relevant to them. Now that we are clear on the structure and purpose of the system we’re using, let’s investigate how to utilize it to its full potential. 2. Organize campaigns around specific concepts The campaign level provides your first opportunity to organize your ads. You should create multiple campaigns that are oriented to very specific concepts related to your business. These concepts are typically something like product groups or target markets. For example, if you’re managing the web site Top 5 Flicks (http:// you might want to organize your campaigns into genres such as “Action”, “Comedy”, and “Drama”. If you sell and rent videos, you might want to organize your campaigns that way too. Or you might even want to combine these concepts and have campaigns such as “Action Rental”, “Action Sale”, “Comedy Rental”, etc.

Don’t hesitate to create multiple campaigns. You’ll be glad you did when you set up your ad groups as described on page 3. But first, a few more tips about organizing at the campaign level. 3. Separate campaigns for content and search networks Google campaigns are organized into two very distinct types: Search and content-targeted. The search network (which also includes Google’s search partners’ sites) displays your ads along with the organic search results in the search engine. The content network is a vast collection of websites that have incorporated Google ads into their website using Google’s AdSense system. In the content network, Google matches your keywords to the content found on the website, as opposed to the search network where your keywords are matched to what the visitor typed into the search field. If you set a campaign to run on both the Search and Content networks you have just made your ability to track performance much more difficult. Why? Because the clicking behavior of visitors from the search and content networks tends to be quite different from each other. Visitors from search ads tend to be much more purposeful. They are more likely to be looking for what you are selling. Visitors from content ads tend to be more impulse clickers and may be less likely to convert. You can expect click thru rates (CTR) from search result ads to be something like 100 times the rate of content ads. For instance, you may get an average CTR of 2.00% from your search ads and 0.02% on your content ads. Combine these into the same campaign and your overall campaign CTR may be something like 0.95%, which doesn’t tell you anything meaningful. Not surprisingly, the cost per click (CPC) from content ads tends to be much lower than search clicks. So with content and search combined, not only is your CTR all muddled up, but so is your cost information. You may find yourself wasting time in a futile attempt to understand just what the data is telling you. The other reason to create separate search and content campaigns is that the keyword grouping, ad messaging and optimization for search and content are quite different. While grouping keywords for a search campaign, your focus should be on grouping similar keywords so the ad messaging is focused. While grouping for content, you will probably want to choose fewer keywords and keywords of different types so they trigger relevant content.



9 Tips for Organizing Your PPC Campaigns

Similarly, optimization for search involves changing bids on keywords while optimization for content is more about excluding certain irrelevant words or poor-performing sites. The answer is simply to create two separate campaigns. Let’s say you run the Top 5 Flicks website and you want to generate traffic for your “Action movies” category. Create two campaigns: one named “Action movies – Search” and the other “Action movies – Content”, and check the corresponding network for each of these campaigns in the campaign settings area. Now you can track these campaigns separately and clearly, and you will be able to see the difference in how the networks perform. 4. Separate campaigns for fat head and long tail keywords Having created two different campaigns for the search and content networks, you may want to take a further step and create a separate search campaign for your “fat head” and “long tail” keywords. For every category of products or services, there are a few keywords that have a high volume of traffic. These are called fat heads and they usually very broad words which can refer to a wide range of products or services. They have high traffic volumes and therefore attract more bidders, resulting in a higher cost. Their conversion rates tend to be lower but in terms of volume they usually get the most conversions. Long tail keywords on the other hand have lower volumes but are naturally more specific. They tend to happen later in the purchase cycle and generally have higher conversion rates higher quality leads. So using this method you would now have the following campaigns: •	 •	 •	 Action movies – Content Action movies – Search (Top Keywords) Action movies – Search (Long Tail)

same campaign, the fat head keywords can burn up the entire available budget, thereby limiting exposure of your more profitable long tail keywords. To ensure this does not happen, it is essential to group the keywords by potential volume. 5. Filter Campaign Summary by Network A dropdown control in the upper-right corner of the Campaign Summary allows you to display only traffic from the Search network, only the Content network, both Search and Content separately, or both Search and Content combined (the Summary view). Because you have defined your campaigns to separate the search and content traffic, you can view this report in the Summary view and still be able to see all your content and search traffic separately. Now you can sort the Campaign Summary on various columns and it will reveal areas on which you need to concentrate. If you sort this report by cost and you don’t see all your “Top Keywords” campaigns clustered toward the top, then you should check out your “Long Tail” campaigns to see what important keywords have not been identified. Sort the column by CTR and you may see the “Long Tail” keywords near the top while the “Content” campaigns cluster at the bottom. If you don’t, you’ll want to take a closer look because there’s probably room for improvement. The idea here is to give yourself the data you need to triage your ad groups because, as we will see, you don’t want to just go meandering through your ad groups aimlessly—you may never return! 6. Organize ad groups around keywords Campaigns are for organizing your ads conceptually. By the time you get down to the ad group level, you need to start specifying ad groups in terms of specific keywords. Not concepts --keywords. So under the “Action” campaign for your movie rental site you might have the following ad groups: •	 •	 •	 •	 •	 •	 Schwarzenegger Stallone Bruce Willis Sci-Fi Monster Etc.

By putting your popular keywords in a separate campaign you can more easily focus on that campaign on a regular basis without having to wade through the masses of long tail keywords. Of course you’ll still want to peruse those long tail ad groups, but since there is less money on the line you can deal with them less frequently. Another critical reason to separate these ads is budget management. On Google, budget is allocated at the campaign level. If your fat head and long tail keywords are all combined under the



9 Tips for Organizing Your PPC Campaigns

Obviously this can turn into a huge number of ad groups very quickly. That’s the idea. It’s much better to have 50 ad groups with 20 keywords per ad group than to have two ad groups with 500 keywords each. Why? First, using this method you can write specific ads for each ad group that actually contain the keywords under that ad group. For example, the “Schwarzenegger” ad group could contain many keywords, such as: •	 •	 •	 •	 •	 •	 •	 Schwarzenegger flicks Movies starring Schwarzenegger Movies starring Arnold Arnold Schwarzenegger Best of Schwarzenegger Schwarzenegger action movies Etc.

7. Use the “Sculpture method” to get your campaigns under control Let’s say you’ve set up 20 campaigns with 20 ad groups per campaign. You have 20 keywords and two ads per ad group. That’s 8,000 keywords and 400 ads to keep track of. Now it’s time to start analyzing their performance and making adjustments. But how? Chances are, in the beginning you will use the “sculpture” approach to managing your campaigns. This means that you will notice situations that look like they could be improved and make little adjustments in an ad hoc fashion, chipping off some CPC here, building up some keywords there. For example, you may notice that you are showing up near position one for a given ad group and, looking closer, you see some keywords that might get you into a decent position by bidding significantly lower. This is a perfectly fine way to gradually mold and sculpt your campaigns into the basic shape you want. As you do this, you must always be aware of the date range you are looking at. The metrics for one date range may be completely irrelevant or even misleading to the question you are currently trying to answer. On one hand, you want to make changes based on the most recent data. If you make a change to a keyword bid based on the last months’ of data, you may not be factoring in that the CTR for that keyword has changed significantly in the last week. So all things being equal, you want to make changes based on the most recent data. On the other hand, you don’t always have enough data recently to reach a valid conclusion. You don’t want to make decisions based on the behavior of just a few individuals, so you may need to expand your date range at times. Of course if expanding the date range means you muddy your results because you’ve made big changes during that time—well, now we’re back to the first case. There’s more to optimization than just making bid changes. Optimization also includes modifying ad copy so it flows better with the keywords that generate traffic and modifying landing pages to meet the expectations set by ad messaging. Pausing or deleting poorly performing keywords is another effective way to improve and optimize campaign performance.

(Are you starting to get the idea of how your keywords can balloon?) The ads under this ad group will all contain the word “Schwarzenegger” and therefore there will always be a match between the keyword searched and the ad displayed. Not only does this create the critical keyword/ad relevance factor that Google likes, but you’re likely to see a better click thru rate because the visitors see the relevance too. Both of these factors will improve your quality score and result in a lower cost per click (CPC). Another reason to use plenty of ad groups is that you will find it easier to determine which ads are working well for you by looking at it from the ad group level rather than zooming clear down to the keyword level and peering at a massive list of keywords. It’s a way of breaking the data down into manageable chunks just as we did at the campaign level. Again, you’ll want to triage at the ad group level before diving into the keywords themselves.



9 Tips for Organizing Your PPC Campaigns

Obviously, keeping track of many ad hoc changes is tricky. An indispensible tool when using the sculpture method is the “My Change History” located in the Tools section. If you are ever in doubt about why some metric has suddenly changed, you’ll often be reminded of what caused the change right there. 8. Conduct controlled experiments The “Sculpture” method is best used in the beginning as a quick and dirty way to get your campaigns under control. Once you’ve achieved a certain level of stability, however, you’ll want to switch to more controlled experiments in order to determine ways to optimize your campaigns. The sculpture method is based on gut instinct and assumptions—for instance, you may assume that being in position four for a lower cost is more optimal than being in position one for a higher cost. Controlled experiments allow you to turn assumptions into facts. If you think being in position four is more cost-effective, find a keyword that has been consistently showing up in position four for a while and test it. There are basically two types of tests: a “Time Split”, where you compare the performance of elements across consecutive time spans, and an “A/B Split”, where you compare the performance of elements against each other simultaneously. Generally the A/B Split is preferable because with the Time Split you introduce the time factor. For example, if you compare an ad’s performance in October against its performance in November, changes could have as much to do with the approaching holiday season as with changes to the ad itself. However, sometimes the Time Split is your only option. In the above example you would use a Time Split because Google does not provide a way to simultaneously apply two different bids to a given keyword. To execute a Time Split on bid adjustments, mark the date, and bump your bid to push the ad into position one. Let it run that way long enough to collect a significant amount of data. Then check to see if your cost per conversion has changed significantly. Simple. A/B Splits are also straightforward. Simply set up two distinct versions of the ad you are testing and let them run long enough to collect significant data. One thing you will want to do when testing ads is go into the campaign settings and ensure that “Ad serving” is set to “Rotate” rather than “Optimize”. This will cause both of your ads to be displayed a roughly equal number of times. The “Optimize” setting, (which is set by default), will cause the better performing ad to show more often. But you aren’t leaving it to Google to automatically optimize for you—by conducting

your own tests you’ll be able to expedite the process of finding the most effective messages. While A/B Split tests on ads and Time Splits on bids discussed above are among the most important types of tests, there are actually several others you should consider: Landing Page – comparing conversion metrics with different versions of the landing page Day parting – testing performance between the same ads during different parts of the day or days of the week Geotargeting – comparing performance from different locations either within the your country or worldwide Match type – testing the performance of exact, phrase, or broad match keywords Regardless of what type of test you are conducting, three key points about controlled experiments must be emphasized: 1. You must get significant data. If your control condition gets two conversions and the test condition gets three conversions, you are not ready to conclude this experiment. Those numbers just aren’t big enough to be statistically reliable. There should be no other major changes other than the factor you are testing. For example, if you are testing the effect of a bid change, you certainly should not change the ad text associated with that keyword or the design of the landing page. Those are pretty obvious. But some changes are not as obvious and not even subject to your control. For example, a competitor who suddenly enters the scene with a very compelling offer could throw off your results. In order to avoid the possibility of random factors throwing off your results it’s best to conduct experiments as quickly as possible. That means conducting experiments on your highest volume keywords. When measuring test results, use rates or percentages rather than absolute numbers. For example, while comparing the performances of two ads, conversion rates are a better metric than the number of conversions. This ensures data is not skewed by the level of impressions an ad receives.



Once campaigns attain a level of stability, it’s best to set-up a systematic process of reviewing performance. Set benchmarks for performance and use the process to effectively monitor, regulate, modify and optimize keywords and ads against this benchmark.



9 Tips for Organizing Your PPC Campaigns

Analytics can help expand your keywords effectively and sync your campaign with seasonalities and industry trends at this stage. 9. Use a Tool Like LyrisHQ PPC Management While the AdWords interface is quite capable, it is far from perfect. To expedite and extend the management of your campaigns in a powerful way, you can use a tool such as LyrisHQ PPC Management. Lyris HQ provides an enhanced interface to the same data you manage through the AdWords site. It incorporates visual data representation techniques that make it much easier to identify abnormal data that might require your attention. It also includes a “Problem Campaign” report that automatically identifies those campaigns, ad groups, keywords, or ads that aren’t performing well and it puts them in a handy list. Lyris HQ uses advanced Web 2.0 technology for a friendlier environment with a lot more dragging and dropping and a lot less clicking and reloading. This is a huge time saver.

Integrated keyword research tools go well beyond those provided by Google, allowing you to more easily build the most complete set of keywords. The Lyris HQ PPC Management tool also emphasizes the tracking of campaigns for web analytics. Rather than a single tracking parameter, the system will automatically append a set of tracking parameters that allow you to easily segment visitors from any campaign, ad group, keyword or ad. When combined with the organizational structure described above, Lyris HQ PPC Management gives you the ability to perform granular analysis on your campaigns based on visitor behavior after the click.

Lyris, Inc.
5858 Horton Street, Suite 270 Emeryville, CA 94608 • USA Toll-free in the US: (888) 465-9747 International calls: (510) 844-1600 Fax: (510) 844-1598 Customer Support: (888) LYRIS CS (1-888-597-4727) or 571-730-5259 Lyris, Inc. (OTCBB:LYRI.OB) is a leading marketing technology company that provides hosted and installed software solutions for marketers at mid-size businesses. The company offers marketers an integrated technology platform through its Lyris HQ product. This sophisticated, yet easy-to-use tool provides marketers a suite of best-of-breed applications for managing email marketing campaigns, publishing and managing Web site content, creating landing pages, optimizing Web sites and managing pay-per-click campaigns. Clients include Nokia, Adobe, PalmSource, Johns Hopkins University and Jupitermedia. For more information, please visit The company is based in Emeryville, California.

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