Web Search & Marketing Newsletter - February 2014

Welcome to the latest issue of our monthly newsletter which covers news, tips and advice on effective website marketing and search marketing techniques and trends.

In the first article this month, we take a look at Google's recent changes to its AdWords Ad Rank system and how this can have a dramatic impact on the average cost-per-click. Next, we review the link from AdWords and Gmail adverts to Google's explanation of ad targeting, which provides useful insights into competitors' keywords and also provides the option to block adverts.

In the final article this month we assess the use of bid strategies in AdWords and why it's important for managers to use a bid management style that suits a specific account or campaign.

You can read more below, or you can also browse through previous editions of the newsletter, either by month or by subject. You can also follow us on Twitter for the latest developments during the month, or follow our Facebook page or Google+ page for updates.

On to this month's edition...

Google Changes AdWords Ad Rank Calculation

Google recently announced a change to Ad Rank, its ad serving calculation in AdWords that determines where your ad shows and how much you'll pay per click. This is a significant development, which should be of interest to anyone who's running an AdWords campaign, as it can have a noticeable impact on the average cost per click (CPC).

This new change to Ad Rank now factors in the expected impact from ad extensions (particularly sitelinks), as well as the previous factors of max CPC bid and quality score. Ad Rank is also becoming a bigger factor in determining whether ads are eligible to display with extensions and different formats.

So, most importantly, extensions and formats now play a role in the price you pay per click and in the position your ads display. Google is always endeavouring to enhance the user experience and says that "they make ads more useful". This typically leads to an improvement in click-through rate and overall campaign performance.

There are various types of advert extensions and formats, including location and call extensions, as well as sitelinks. Google states that "adding sitelinks boosts the average CTR on an ad by 10-20% (or by 20-50% when the search is one of your branded terms), so that implementation should be time well spent".

Google wants advertisers to use all the available extensions that make sense for their businesses, but advertisers don't have to worry about having the right combination of extensions displaying for a given situation. For example, if someone is searching on a mobile phone for "car repair", the user might be most likely to respond to the ad when they can click to call a phone number or tap a link to get directions to visit in person. So Google may show a combination of call and location extensions with your mobile search ad.

In addition to serving extensions according to context, Google says it will automatically show the highest performing extensions and formats, meaning those expected to yield the greatest clickthrough rates. Because Ad Rank is now more important in determining whether your ad is shown with extensions and formats, you might need to increase your Quality Score, bid, or both for extensions and formats to appear.

Therefore it's essential to ensure that all AdWords campaigns now have a good variety of ad extensions, otherwise your average CPC may rise as a result of increased competition from other ads with a large expected impact from formats. Whereas conversely, there may be lower CPCs if your extensions and formats are highly relevant, and Google expects a large positive performance impact relative to other competitors in the auction.

If you'd like more information about how the inclusion of ad extensions can improve your AdWords campaign, contact us now.

 

'Why These Ads?' Drop-down Menu Option

As noted above, Google is consistently aiming to enhance the user experience and make ads more relevant to them. So, a while ago they released improved transparency and choice regarding the ads users see on Google search and in Gmail. When you search a query in Google today you will see, up in the top right corner of the ad, a link to a drop-down menu that includes "Why these ads?". This system is to help users only see the ads that are relevant to them.

The content of this drop-down box is different for an AdWords advert than for the 'organic' results. The former drop-down contains 'share' and 'why this ad', whereas the latter contains 'cached', 'similar' and 'share'. When the "why this ad" link is selected, it leads to a page that gives details about the way in which the advertiser used the keyword to generate the advert: e.g. 'This ad matches the exact search you entered', or 'this ad matches terms similar to the ones you entered.' This provides useful information about how your competitors are bidding on particular keywords and can be used to create those with alternative match types, or give insights on how to improve your keywords' quality score.

There are options on that page to 'block this advertiser', or 'control your ad settings' (by going to the Ads Preferences Manager). You can choose to block ads from specific advertisers, or opt out of personalised ads entirely. It's always possible to go back at anytime and change this in your preferences. When a user opts out of seeing search and Gmail ads, it's still possible to show your ads to them but not in the normal targeting ways. If a user blocks your ads specifically, your ads will no longer be shown to them.

It is important to note that when users block your ads, this will not directly affect calculations of your quality score and ad rank, but it's interesting that Google uses the words "not directly", implying that it possibly could in other ways. As Google is always trying to improve search relevancy and overall satisfaction, it's likely that if the majority of people are saying that they don't want to see your ad this will "indirectly" affect your ad and how often it shows.

So there's a fine balance with this, as it will save advertisers money from unwanted clicks, but it may also damage their quality scores and ad rank, which in turn would increase the average CPC. Access to these settings isn't widely known by users however, so it's unlikely that they will have a significant impact either way.

If you'd like more details about the 'Why these ads' dropdown and the Ads Preferences Manager, please get in touch.

 

Using Bid Strategies in Google AdWords

Bid management strategies need to be carefully chosen by AdWords advertisers due to different strategies having a series of benefits and disadvantages. The first and most important process that needs to be performed by advertisers is through identifying the most appropriate bid management strategy for a campaign and implementing this for a specific objective.

The most widely used bid management strategy is 'manual bid management' and, although this is a time consuming process which involves monitoring and editing keyword lists manually, this technique allows greater attention to detail and control of bids at the individual keyword level. However this is difficult for accounts with a substantial amount of keywords and requires bid management to be based on a series of bulk edits or desired rules. Alternatively, automated rules such as flexible bid strategies allow for wider automated bidding across an entire campaign.

The types of AdWords flexible bid strategies include maximizing clicks - with AdWords automatically setting bid prices to maximize the amount of clicks generated - and target search page location where AdWords automatically corrects bid prices with the goal of getting your ad on the first page of Search results. By using this type of strategy you are giving Google's system control of your bid levels and spend, which may not always work to your best interest and limits the flexibility of bidding across different search terms.

Target cost per acquisition is more complicated but allows account owners or managers to set bids with the goal of generating as many conversions as possible. Enhanced cost per click is a flexible bid strategy that changes bid prices, attempting to increase conversion levels. A different form of automatic bid management is target returns on ad spend, which brings in more variables through attempting to maximize conversions, but at the same time providing value by reaching a target return on average ad spend. These techniques can work well but are best used when the account generates a lot of conversions and therefore gives Google's system more data to work with.

It is therefore important for advertisers to identify and effectively implement a bid management style that suits a specific account or campaign. A poorly performing campaign can have a change in fortune and produce better results through a simple change in bid management strategy, but it can also work the other way. The greater the understanding an advertiser has with a campaign, the higher the chances that an ideal bid management strategy is chosen and leads to success, although of course the techniques need to be tested and assessed.

If you'd like to know more about the best strategies for using bid management in AdWords, please contact us now.

 

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We hope you've found this month's newsletter useful. Please contact us if you need any more information on the items covered, or our advice on any aspect of your website's performance. Also, if there are any issues you would like to see in future editions of this newsletter, please submit your suggestions to us.