What have we done so far in this course?

1. Did the necessities and basics (formed teams, reviewed Web searching, examined the search engine market, sponsored search)

2. Reviewed selecting a business and picked a client3. Set-up AdWords Accounts and explored the AdWords

platform4. Challenge Requirements (Pre and Post- Reports)5. Began campaign structure including Ad groups6. Went into detail on keyword selection and keyword

matching7. Investigated Ads and ad techniques8. Geotargeting and dayparting9. Introduced the Google AdWords Editor

A whole bunch of stuff in only 10 lessons! Now what?

We are going to start bringing it all together!

By design and necessity, we’ve been covering one or two links of the keyword advertising chain at a time

Now, we start seeing how everything links together to form the whole chain (i.e., keyword advertising process)!

Tracking Performance:Metrics, Measures, and Money

Jim Jansen

College of Information Sciences and Technology The Pennsylvania State University

jjansen@ist.psu.edu

Let’s frame it within GOMCHA

The Challenge

1. Two written componentsa. Pre-Campaign Strategy

b. Post-Campaign Summary

2. One computed componenta. Campaign Statistics

This is a course, s

o

major goal is

the

learning objectives,

but …

… why not d

o your best?

• Today, we are going to first going to focus on the campaign

• …. Why? …• Will help use in achieving our learning

objectives … the Challenge criteria are everything that a good campaign should be doing!

• Also, places the metrics and measures in some context

The Challenge

1. Two written componentsa. Pre-Campaign Strategy

b. Post-Campaign Summary

2. One computed componenta. Campaign Statistics

What statistics are used for scoring?

The Scoring Algorithm• Doesn’t just look at performance (note: campaign doesn’t evaluate converts … but mention them in the written reports!)• Final algorithm incorporates 30 different signals in 5 categories

• Account structure• Tool and feature usage• Advertiser savviness• Budget management • Performance

• The Campaign Statistics algorithm will determine the top 50 accounts in each region.

• Independent Global Academic Panel will review the Pre-Campaign Strategy and Post-Campaign Summary reports of the top five teams in each region to determine the regional and global winners.

• It takes great Campaign Statistics to make the regional top five, and then great written reports to win!.

Campaign Statistics Algorithm• Account Structure - Did the team set up their campaign in an

efficient manner? Was it structured against product/service lines and themes? Did it contain Ad groups with relevant Ad texts/variations and keywords?

• Optimization Techniques - Did the team take advantage of tools and methods to get the most out of their campaign? Did the team follow the best practice encouraged in the Challenge guides and support materials?

• Account Activity & Reporting - Did the team review and change their approach over time to get the most from campaigns? Was the account regularly monitored and did the team check and react to the reports available?

• Performance & Budget - How effectively did the team use the available budget across keywords throughout the competition?

• Relevance - How relevant were the team's ads? What click-through-rates were achieved?

Campaign Statistics

• Account structure: An excellent account structure– mirrors the structure of the client’s Website– campaigns grouped by product lines– each campaign contains multiple Ad groups– each Ad group contains ad texts/variations

specific to these subsections and a targeted and specific keyword list

• Good campaigns and good Ad groups!

• Most o

f this w

e have covered already

(but some m

ore coming!)

Campaign Statistics

• Account structure: An excellent account structure– mirrors the structure of the client’s Website– campaign grouped by product lines– each campaign contains multiple Ad groups– each Ad group contains ad texts/variations

specific to these subsections and a targeted and specific keyword list

– in other words … think of this illustration …

• Good campaigns and good Ad groups!

• Most o

f this w

e have covered already

(but some m

ore coming!)

Think of this as Product or Service lines.

Think of this as your company.

Think of this as individual Products or Services.

If your client has a good Website, you can model your campaigns off the major sections of the

Website. Budget stuff happens here!

Link each Ad group to a specific Webpage on your client’s Website. Keyword selection and a

lot of critical metrics happen here!

The Account Structure should reflect your marketing strategy! (the details should support this strategy!)

Campaign Statistics• Optimization techniques

• how well you implement the optimization techniques and best practices (e.g., geotargeting, keyword matching variations, DKI, A – B testing of ads, dayparting, etc.)

• how you optimized the Google search network to your advantage

• how effectively you used the content network

• Use both search and content n

etworks!

• Leverage th

e entire to

olbox of PPC te

chniques!

• Jansen suggestio

n: if you decide not to

use

some technique, e

xplain it your w

ritten re

port

Campaign StatisticsAccount activity & reporting– Review and change your approach over time to ensure you get the most from your campaigns

(i.e., engage your campaign multiple times a day, split Ad groups, revise ads, change budget)–Use the Report Center and take actions as a result

• Look in AdWords accounts Report • Nice overview of reports at https://adwords.google.com/support/bin/topic.py?topic=69&hl=en_US • We’ll get started on this today!

• Use th

e report f

eatures to th

e their m

ax!

Campaign Statistics• Performance & budget

• effectively use your budget across your keywords throughout the competition (*don’t* go over!)

• edit the cost-per-click of individual keywords during campaign (keyword management everyday!)

• Again, we’ll discuss bids and budget, in fact we start today!

• Contin

ually m

onitor a

nd adjust bids!

• Don’t g

ot over b

udget!

Campaign Statistics• Relevance

• Achieve a strong click-through rate (need to get clicks in addition to impressions daily keyword management). We cover these today!

• Create relevant and effective advertising (write good ads that get clicks!)

• Revisit your campaigns and change where necessary (focus not just at the Ad group level, but also the campaign level)

16

• Work to

the best m

etrics possible, e

specially

CTR!

Okay, a lot to chew on …

Let’s take it one bite at a time

Today, we start with Relevance measures– Account structure– Optimization techniques– Account activity & reporting– Performance & budget– Relevance measures

First Some Definitions

• Impression: The displaying of your ad one time to one user

• Click: The action of a user clicking on your ad

A user query

Links to one of your key phrases

Causes an ad to appear

This is an impression

A user clicks on the ad, causing …

… the landing page to appear. This is a click.

Kind of basic, right? Yes, but important!

• Impressions and clicks are the basis of nearly every important metric in online advertising!

Some Important Metrics• Clickthrough Rate (CTR)

– Percentage of how many people clicked on your ad given the total amount of impressions

– CTR = Clicks / Impressions– CTR can tell you a lot of things (like how much searchers like your ads)

and influences when your ad is shown and ad’s rank on page• Cost Per Click (CPC)

– The amount you pay Google every time someone clicks on your ad. You only pay when someone clicks your ad! (Note: similar to your bid per key phrase, but not quite. More on that later when we talk budget.)

• Average Position (Ad Rank)– The average position that keyword ad held for the day

• Conversions– Very important for marketing purposes, but you would need access to

Google Analytics on client’s Webpage.

CTR

Clicks---------- = CTR (expressed as %)Impressions

CTR is a measure of relevance of your ad, your keywords, your landing page

CTR

Example Advertiser A:

20 Clicks---------- = 0.02 = 2 % CTR1,000 Impressions

Example Advertiser B:

3 Clicks---------- = 0.03 = 3 % CTR100 Impressions

Note a key thing here – Advertiser B has a higher clickthrough rate. But, does this really mean that Advertiser B has the ‘best’ advertising campaign? … Let’s talk.

Okay, but what should you be shooting for?

• Varies by campaign, client, budget, etc.

• But, let me give you some advice and marks on the wall

Jansen’s Suggestions• Impressions – you have to get impressions at all cost!

(Analogy to fishing: Doesn’t matter how good your techniques and equipment are if there are no fish.)

• Clicks – potential customers must click on your ads (Analogy to fishing: This is where your equipment and technique come into play.)

• CTR – generally the higher the better! Only two points of adjustments, decrease impressions or increase clicks. (Analogy to fishing: There may be a lot of fish where you are at (i.e., impression) but you only want certain fish (i.e., clicks by potential customers).)

Jansen’s Suggestions

• CTR – the higher the better! But, what are we aiming for?

• Depends totally on client, your skills set, budget, etc. So, no industry standard.

• However, here are some marks on the wall.– CTR of 0% to 1%: why bother?– CTR of 1% to 2%: reasonable for your budget– CTR of 2% to 5%: given your budget,

excellent!– CTR of 5% to 15%: unbelievable! given your

budget

What is a good way to monitor these metrics?

• Use the reporting tools in AdWords!

There are several types of reports

• Keyword Performance• Ad Performance• URL Performance• Ad group Performance• Campaign Performance• Account Performance• Search Query Performance• Placement Performance As you can see, covers nearly every aspect of your

keyword advertising effort!

Team Exercise for Effective Campaign Management

Individually: 1. Go to Reports, and set-up a Campaign Performance

for *your* campaign that provides you daily data from the prior day. Have the report run daily and email you the results.

2. Review the other report formats. Jot down the ones you believe would be valuable for the team to monitor

As a team, 1. Decide on what metrics you are going to track and

what reports would be beneficial at the team level.2. Assign responsibilities for a report to an individual.3. Set-up the required reports as you see fit.

Take about 20 minutes

• Bidding Strategies …

• First, we need to take some metrics

Bid metrics (like CTR) impact campaign success and Quality Score!

1. CPC – Cost Per Click (Sort of what you bid. Going to cover this in a moment)

… but also …

2. Quality Score– High quality scores can drive down your ad cost. – Low quality scores means that your ad (or landing

page) isn’t very relevant to a keyword and is likely to perform poorly

Cost-per-click (CPC)

Min Bid CPC is the minimum amount an advertiser pays to run an ad. It’s set by the AdWords system and often based on Quality Score. – Google state “inactive for search” – increase quality or bid to activate.

Much easier to increase bid; however, long term … not good.)

Max Bid CPC is the amount an advertiser is willing to spend each time clicks the ad. It is set by the advertisers.

The price you pay is generally somewhere in between the two.

You can choose either one bid CPC for the entire ad group, or different bid CPCs for individual keywords.

• Jansen’s suggestio

n: go fo

r individual b

ids

on individual k

eywords

Let’s talk some bidding strategy

How much to pay per click?One Method: Find out your Break Even Point

1. What constitutes a successful conversion?– Conversion = sale from an online ad

2. What is the net profit for a successful sale?– Example: $19.37 = profit per product sold

3. What is your conversion ratio (e.g., percentage of visitors who click on an ad and buy a product)?

– Example: 2.39% = conversion ratio

4. net profit x conversion ratio = break even point $19.37 x 0.0239 = $0.46

You’re losing money on every sale if you bid

above this

Note: Conversion rate is not CTR!It is the ratio of converts to total number of customers who clicked on your ad.

How much to pay per click?Another Method: Find out your ROI

ROI = ((Sales Revenue – Ad Cost) / Ad Cost) x 100

Keyword Clicks Cost Sales Revenue Minus Cost

ROI

photo equipment

110 $75/day $120/day $60 100%

photography classes

40 $25/day $90/day $65 260%

Even though ‘photography classes’ results in fewer clicks than “photo equipment’, you should allocate more budget to photography classes by increasing the maximum CPC for ‘photography classes’ while decreasing the max CPC for ‘photo equipment’

Okay, but where to start?

• You have $200• You have 21 days• Jansen’s suggestion: start out at $9 /day for the

entire account cap• This implies – cheap keywords = long tail

(around $0.30 or cheaper CPC; need a balance here; remember, you have to get impressions!)

• Re-allocated funds (up or down) at end of first week and second week

• Keep $20 in reserve for last few days

Questions?

Okay, speaking of those campaigns …

• Really want you to set the start and stop dates

• So, do this: for those campaigns that you could not set the start date. Copy them (use Google AdWords Editor), set the start and stop date (29 March to 18 April) for the new campaign.

• Upload new campaign to your account• Delete the old campaign

Also, reminder About Pre-Campaign Reports?

• The report (in the state that you would submit it to Google) is due to me Thursday 4 March

• You will get it back over Spring Break with feedback

• Sorry, no class time. Use the Thursday 18 February as team time. No class on Thursday!

• Only stuff you need that we haven’t covered is content network (next Tuesday).

• Team leaders: reminder of class time is yours

Thank you!(reminder to do your daily logs)

Jim Jansen

College of Information Sciences and Technology The Pennsylvania State University

jjansen@ist.psu.edu