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Friday, January 4, 2008

Part 5 - Being a winner in your Competition

Quality Score

If you have not heard of Quality Score, then you are not running your Google Adwords campaign as optimally as you could be. Quality Score is Google's point system that ranks each and every ad and determines where it is positioned within the sponsored results. It also determines what the minimum bid price will be on keywords you wish to advertise and how much you pay-per-click.

If you can reach a high Quality Score you can get a higher ad position than a competitor who is paying more per click. This is one reason that Google Adwords is an Internet Marketer's dream system. Unlike Yahoo! Marketing and other pay per click networks, you can attain great ad positioning without having to spend more than the other competitors. Quality Score has enabled Google to reach the highest quality paid search results of all other advertising networks.

Quality Score is based on 5 different variables, all of which impact your ad's overall score. These variables include CTR, Ad Content, Ad Grouping, Ad History, and Landing page content. This section is very important so please make sure that you understand the following information well.

1. CTR - Click-Through Rate

Your campaign click-through rate is the ratio of impressions you serve to the number of clicks those impressions generate (clicks divided by impressions measured in page views). Click-through rate tells you whether the particular message you're using is well written, well presented, and well targeted to the particular audience you're trying to reach

Your campaign click-through rates can be difficult to calculate because impressions are often served by external servers and usually require that data is imported into your measurement solution. Also, some advertising servers don't actually measure or report on clicks, forcing you to use responses as a proxy for clicks.

As mentioned earlier, CTR or Click-Through Ratio is the percentage of clicks your ad receives in relation to the number of search impressions. CTR directly relates to how compelling your ad is to the target audience. There are several tricks that can be implemented to increase CTR, some of which have been spoke earlier in the Ad Copy section.

CTR is one of the most important factors that you want to master in order to reach a high Quality Score. If you are experiencing CTR of 1% or less, you can easily increase this to 5%+ by using the Common keyword technique. We have helped many Internet Marketers cut their advertising costs in half by implementing this technique.

Having keyword-relative content within your ad will increase your Quality Score. One suggestion is to have the keywords from your Ad Group within your ad. For example, if you are promoting the keywords money, make money, how to make money, you could build a single Ad Group with a title like the following: This not only increases your Quality Score (as the ad is relevant to the keywords), it will increase your CTR as people will be more inclined to click your ad because the search terms are bolded.

2. Your Ad Content

Having keyword relatives content within your ad increase your Quality Score

3. Ad Grouping

Building ad groups is very important to not only building a good Quality Score, but increases the relevance of your ad copy to your keywords. Try to keep your Ad Groups to a size of 25 keywords or less. Although Quality Score is a particular rating given to a keyword, the bigger your Ad Group, the less targeted your ad becomes, thus decreasing your Quality Score value.

4. The History

Whether you like it or not, Google makes account predictions. If your Google Adwords account has performed poorly in the past, it automatically assumes that your ad & Ad Group quality is going to be low with any new Ad Groups (or additional keywords). If you have noticed that your ad is inactive, it is because your maximum bid is not set high enough for Google to display it in the search results. This may be a result of poor ad performance in the past. Do not worry, you can lower the minimum CPC if you improve your CTR, which is obviously in direct relation to the quality of your ad.

If you have an ad that has performed well in the past, you can use Google's historical predictions to your advantage. You can add highly related keywords to your top performing campaigns Ad Groups and you will find that the minimum CPC will be much lower than that of an account with poor ad history.

Put effort into initially setting up quality Ad Groups and this will greatly improve the predictions Google makes.

5. Landing Page Content

The most recent addition to Google Adwords Quality Score formula is landing page content. The idea is that the more relevant the landing page, the higher the quality the search results. With quality being one of Google's main focal points, they have put a system in place to monitor the quality of the sponsored search results, and the actual relevance of the landing pages to the search terms. This will have a negative effect on your overall Quality Score if your ad is not relevant to your landing page, or if you are using particular tricks to alter or hide page content (cloaking, redirects).

Your landing page must include relevant content to the search term or your Quality Score will be negatively affected.

Another Landing Page Relevance

With Google's latest Big Daddy upgrade that took place, the Quality Score algorithm has seen a major shift. In addition to many to the other components of Quality Score, landing page relevance has been added as a significant aspect. In order to reach a high QS now (and good positioning), a landing page that is highly relevant to the initial search query is required. This means that if someone searched the term fix my golf swing , you should have these exact terms on your website. It is also good to include related information.

Google put in place to improve the quality of the paid search listings. We have done tests to validate the importance of landing page relevance and in some instances a relevant page cut 25% of the overall Cost-Per-Click and got ad positioning that was 3-5 spots higher. Landing page relevance is KEY and you should not ignore it.

Tips for a Relevant Landing Page:

  • Include a Relevant Title : Within the “title”“/title” tags on your webpage, you should include the keywords that were used in the search query. If someone typed in fix golf swing and came to your webpage, your title should include golf swing and ideally, the exact phrase.
  • Use Relevant Headlines : Headlines, in particular ones that are larger text or are included within “h1” tags should be highly relevant and include the keywords from the search query.
  • Relevant Content :Google searches the content within your webpage as well as the header and title.
    The content should be relevant to your title and content anyways, because if you are trying to just optimize your website for Google, then you may be missing the boat on your actual customers. The higher the relevance, the higher the conversions never overlook this fact.
  • Build Static Web Pages : Many people have scripts in place for to insert the keywords from the search query dynamically into their webpage (see DPO section). This is great, but you may be lowering your Quality Score slightly as Google does not interpret dynamic content.
    Building static web pages will obviously generate the highest Quality Score but will take the longest to implement. If you are going to use DPO, make sure that you have relevant content on your webpage to lessen the affects that it may have.

If you notice that your minimum CPC is very high, it is quite likely due a lack of landing page relevance.

What Effects on Ad Placement ?

Now that you are familiar with Quality Score it is important to implement the correct tricks so that you can reach the best return on investment while keeping the relevance and overall quality of your campaign high.

There is a fine balance between bidding, ad placement, Quality Score, web traffic, and overall cost.

Get Position and Bid

When you build a new ad campaign, the web traffic that you generate should be very important to you. Remember, the more quality web traffic that you can achieve, the more potential you have to convert a visitor into a buyer. With this in mind, make sure that you are not paying too much for this web traffic as your advertising expenses need to be less than your overall sales in order for you to turn a profit.

When starting a new campaign it is a good idea to get your ads placed on the first page of search results. Each page has up to 10 places where paid listings will appear so positions between 1 and 10 will be on the first page, thus getting more web traffic. Most search web traffic does not go beyond the first page when doing a search.

How do you know what position your ads are going to be placed in? You can use Google's web traffic Estimator for this.

The Web traffic Estimator is a powerful tool but it is not 100% accurate. The results are based on previous data that Google has collected from the searches that were done in a specific time period. For this reason the Web traffic Estimator can only be used as a guide. Regardless of the accuracy of the Web traffic Estimator, it is a great tool to use as it will help you determine how much you should begin your bidding at.

After you enter the keywords into an Ad Group, you will be taken to a page that looks like the image below. The page will ask you to enter your maximum CPC into a textbox. After doing this, click the link that says View Web traffic Estimator. A page will be displayed that shows you how much each keyword will cost, the estimated average CPC and position. You will want to play with your bid so that you can get the most web traffic for the least cost. You can enter different bids and update the page by clicking the Get New Estimates button.

It is also a good idea to sort the estimates by clicks per day. Click the Clicks Per Day link at the top of the column to sort. This will bring the keywords that will get the most web traffic to the top of the list so you can see where you may be spending your money. We want to keep the average position between 1 and 10 so that your ads appear on the first page. To do this you may have to adjust your maximum bid. Once finished, you can click the Continue button and save your ad.

If you cannot afford the bid price to be on the first page, you can still test out your Ad Group with a lower maximum bid. This is still effective but it will take you longer to generate web traffic.

What Cost of Web traffic ?

It is always difficult to know which keywords will convert into sales, so it is important that you keep a close eye on all of your new campaigns. As soon as you start getting impressions and clicks you will be able to see where you are spending money, and what keywords are costing you. Web traffic is very important, and the more relevant web traffic the better, but if you are not converting sales then the web traffic that you are getting is not worth the money. We have a rule of thumb that all Internet Marketers should apply to their advertising efforts:

When starting a new campaign you need to calculate how much you will earn for a single commission for the product you are promoting. Once calculated, you will have a threshold to follow. Once web traffic starts coming to your site you need to look at your Google Adwords campaign data. More importantly, look at the cost of your campaign. Once your cost exceeds the single commission amount, you should put your campaign on pause and look further into things.

For example, if you make $45 per sale in commissions, the maximum you should spend on the campaign without a sale is $45 before making changes.

What do we mean by Looking further into things ? You can look at your advertising campaign and see how much you have spent on a campaign. Look at the average cost per click, average position and web traffic per keyword. You may see that one keyword has triggered all of the hits to your site. In this case you may want to lower the bid for this keyword or even delete it all together.

Web traffic is great, but if it does not convert into sales you need to make some adjustments to your Ad Group. Following the single commission threshold above is a good way to test your campaigns at the beginning.

Get the Profit in Maximum Bids

You will notice that some keywords and industries are more expensive to advertise than others. For this reason we need to talk high cost bidding. Some keywords cost over $1.00 to have your ads displayed on the first page of search results. $1.00 per click is quite high, but depending on how much your commissions are it can be a good idea to pay this much for a click.

If you have a product that pays you $70 commission per conversion then you can break even by converting at 1 in 70 (1:70). However, to be profitable, you should be aiming for conversions of 1:35. It is always important to calculate what your Break Even Point is. To make the calculation you can use the following formula.

Single Commission Cost per Click = Break Even Point
Here is an Example:
Single Commission = $45
Average Cost per Click = $0.87
Break Even Point = 52 (approx).

To break even you will need to convert at 1:52. Any conversion ratio above this will be profitable for you. A successful campaign can easily yield 100% return on investment and in this example you would have to convert at 1:26 to reach 100% ROI. Using

the Break Even Point will help you judge how much you can spend on average per click at a specific conversion rate to earn profits.

You always want to get the most clicks for the least cost so when estimating your web traffic you can start by entering the minimum bid price ($0.01 USD). Raise the price until you are comfortable with the estimated web traffic results & CPC keeping in mind that the positions 1 to 10 generate the most clicks.

How can these tricks actually save you money? It is simple. As your Quality Score increases, the amount of money you actually spend on each click decreases, and your ad position rises. Google rewards people with high Quality Scores because their ads are highly relevant and perform better.

Did you know that as your Quality Score rises you can actually lower your Maximum bid price and reach the same positioning within the search results? This is true, and we have tested the trick many times before. When you start a new Google Adwords campaign your Quality Score is very low and if you have a poor performing account your Quality Score will also be low. Google will place your ads in the search results according to your Quality Score and Max bid, but as your Quality Score rises, you can actually lower your Max bid prices on your keywords and still reach the same positioning.

This is also how you can reach higher ad placements than your competition, and pay less per click. If you follow our tricks you will increase your revenue, decrease your advertising costs, and your increase your overall performance.

This is Part 5 of 9

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