SEM Punch

Ok, I have to admit, it’s been a while since my last post…I’ve been crunching some of the AOL data that was released and will try to throw some simple analysis tool up soon. But enough of this for now…

From personal experience and by talking to like-minded, geeky search marketers it appears that various details about the Google AdWords system remain puzzling at times. The adwords system is a rather blackbox system, intentionally kept this way. The information asymmetries between advertisers and Google help Google maximize revenue & profit.

In any case, what are some of the questions or issues that advertisers continuously stumble over?

1. I can easily change a keyword’s poor click through rate history by moving it to another adgroup
   Google stores the ctr for a keyword on the account level. That means moving your keyword from one adgroup to another within the same AdWords account will not have any impact on the keyword’s click through rate history. Even if you delete your keyword in adgroup A and submit it again into adgroup B, your keyword’s click through rate history will be contained. So moving your keywords around within one account will not reset your keyword’s ctr history. You could, however, just open a new account and move poor ctr keywords into that new account. But be aware that starting a new account can be somewhat difficult.
2. If I increase my ad text CTR, my rank will improve automatically
   A rank, or position, is not directly determined by the ad text that resides in a given adgroup. The rank is determined by the keyword’s CTR history, the max CPC and the black-box quality score. As such, getting a better CTR on a specific ad copy will induce more users to click and hence indirectly impact the underlying keyword’s click through rate. The ad text ctr is used to determine which copy in your adgroup to serve.
3. Keyword insertion increases the relevancy of my ad text
   I talked to an AdWords representative about this and specifically asked whether keyword insertion would increase the ad text’s relevancy. The answer was no. That was news to me at the time, but it makes sense. Imagine a copy such as:
   {KeyWord:SEM Punch Rocks}
   {KeyWord:SEM Punch Rocks}
   {KeyWord:SEM Punch Rocks}
   www.sempunch.com

   Would this be targeted, for a keyword such as “PPC marketing”? What matters is not how creatively an advertiser can use dynamic keyword insertion. Important is what other words, or tokens, are in the copy and how relevant they are to each keyword inserted in the ad text.

4. If I increase the bids on new keywords, they quickly accummulate good click through rate history and my min CPC drops
   Who hasn’t thought of this yet? Just bump up the bids when launching new keywords and they will get a high CTR - then lower the bids later on and you rank well because of your keywords’ great history. It doesn’t work. Google calculates a rank-adjusted CTR, i.e. Google normalizes click through rate data for each rank. This means, Google has specific expectations for click through rates at each position and benchmarks your actual CTR against those expectations. How are Google’s expactations calculated? I believe they calculate an average CTR in their network for each keyword at each position, but that is only my guess. If you perform better than that average value, you “perform better” relative to your competitors (by being able to maintain lower CPCs for a fixed amount of traffic).
5. In one adgroup, the copy with the highest CTR is the best
   If Google reports a higher click through rate for one copy versus another, it is tempting to believe that the high ctr copy is the best. However, this might not be case. Consider copy A with ctr= 2% and copy B with ctr =1.5%, both launched at the same time. I have seen instances where the serving rate was higher for copy B than copy A. In other words, even though the ctr for copy B was lower, Google choose to show it more often. When you do copy testing and you remove text ads from your adgroups, make sure that you take the serving rate for each text ad into account.
6. If i switch my keyword URL, my adgroup & keywords go under review
   If you have legacy keywords in your adwords account, it could be that you still receive some traffic for keywords that would not pass Google’s automated review process today. This is because over time Google has changed its guidelines for certain sets of words. Of course, I would be concerned about anything that would potentially make my keywords go under review again. But you can switch the keyword destination URL without triggering a ew review process.
7. I can just carelessly dump as many keywords into my account
   Each account has a limit of 1 million keywords. Not too many people reach this limit, but misspellings and canonical search terms can explode your keyword portfolio. Make sure you don’t reach this account limit because of junky keywords that will never even receive an impression.

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