Adwords Finally Adds “Optimize for Conversions” Option

Ever since the dawn of Adwords, advertisers have had the option to run more than one ad variation per ad group. This is one of the features that makes Adwords so attractive – the ability to test different ad copy and landing pages against a set of keywords and learn which performs the best.

Until this week, though, there was always a problem with the definition of “performance.” For Google, and for a handful of advertisers, “performance” is defined as “click-through rate” – the ad that generates the most traffic. But for most advertisers, “performance” is defined as “conversion rate” – the ad that generates the most desired actions, commonly known as conversions.

Until this week, Adwords offered 2 options for serving multiple ads: Optimize or Rotate. Rotate is simple to define: your ads will rotate evenly among impressions, with each variation getting approximately the same number of impressions. So if you have 2 ads, each will display on about 500 out of 1,000 impressions.

By default, the Optimize setting is turned on – changing it requires editing your Campaign Settings. And “Optimize” sounds great: after all, everyone wants to optimize their campaigns, right? Ha, wrong. Optimize (until this week) rotated ads based on click-through rate: the as with the highest CTR would, over time, be displayed on a larger proportion of impressions. It’s not uncommon to see as much as 80-90% of impressions going to one ad with “optimize,” meaning the ad with the lowest CTR barely gets shown. It’s also not uncommon for the ad with the best CTR to be the ad with the worst conversion rate – so you end up spending a lot of money for not very many conversions. Not good.

But what if you were an advertiser who wanted to drive traffic, with conversion optimization as a secondary goal? What if your ad test is just starting out? What if you’re a new advertiser and you don’t even realize you have a choice?

Good testing principles indicate that all test variants should be shown to test samples that are relatively equal in size and demographic. For instance, if an ad only shows to females age 18-34, there’s a good chance the results won’t translate to men age 45-54. So you want to divide up your sample 50/50, and make it random. But if your Adwords ads are set to “Optimize,” that’s most likely not going to happen.

Never fear, though – Adwords to the rescue! This week, Google launched a third option: Optimize for Conversions. Finally, after years and years of advertisers asking for a way to serve the best-converting ad more often, Google came through! Right?

Sort of. As with many Adwords features, there are a few caveats. First, note in the documentation this important caveat: “If there isn't sufficient conversion data to determine which ad will provide the most conversions, ads will rotate using 'Optimize for clicks' data.” Yikes. It’s pretty obvious that most ads will amass a statistically significant number of clicks long before they reach a statistically significant number of conversions. So really, any new test is doomed to start Optimizing for CTR – thus messing up your conversion test results from the start.

Also, the word on the street (or at least on Twitter) is that Optimize for Conversions will optimize based on conversion rate, not number of conversions. So you may have an ad that gets a great conversion rate, but not many clicks; or vice versa. Either way, the system could be making the wrong decision about what’s working for you.

So for now, I’m sticking with “Rotate,” even though Google warns me every time that it’ll ruin my results.

Microsoft's AdCenter Continues to Flounder

The Microsoft/Yahoo Search Alliance has been live for a few months now here in the US, and frankly, I'm unimpressed with it. Our Fluency Media clients are not getting nearly as much traffic from adCenter post-Alliance as they were getting with adCenter and Yahoo Search Marketing combined; we've ended up spending significantly more with Google just to keep volumes up to their pre-Alliance levels.

Back in October, I expressed concern over traffic quality losses with the launch of the Alliance. Luckily, that hasn't happened - conversion rates and cost per conversion are nearly the same as what we saw with adCenter, so that's a positive. But the kudos end there.

Jonathon Hochman wrote a great article for Search Engine Land yesterday about missed opportunities in adCenter, where he outlines a number of billing and customer service issues - all of which we have experienced, as well.

The troubles don't end there, though. Did you know that if you set your PPC account credit card billing to "auto fill," it will automatically charge your credit card even when the account is paused? Yep, that happened to us just last week.

Did you know that if you're using auto-fill, and you experience problems with your credit card (which is not uncommon), adCenter won't bother to notify you, but will just deactivate your account? And when you resolve the card issues and re-enter your billing information, the account is still inactive and you have to call your adCenter rep to reactivate it? Yes, this is an actual issue that keeps advertisers from spending money with adCenter.

Did you know that if you're an agency, and you get a new client that wants to use adCenter, you can't just open a new account yourself under your agency's umbrella account? Oh no, you'll need to again call your adCenter rep to do this for you - and wait a week or two for them to call you back, and then another week or two for them to actually do it, and then call them again after you've entered your payment info to get them to activate the account, and..... well, you get the picture.

Add all of these issues to a slow, un-intuitive, user-unfriendly online interface and an equally slow and user-unfriendly desktop editor (which, by the way, takes about an hour to download because it has to install Silverlight and SQL and a bunch of other insane peripherals; compared with a 5 minute download for Adwords Editor), and the pathetically low traffic levels, and you end up with virtually no desire to waste your time and effort.

Here's another example. (Warning: Rant Ahead!) Back in October or so, we received an email from Microsoft about a holiday promotion they were running, offering a certain amount of free clicks for advertisers who set up a new holiday campaign. We were quick to take advantage of this for one of our e-commerce advertisers who does a brisk holiday business. This advertiser was already getting significant traffic on their Adwords holiday campaign, but the CPCs were high - so we jumped at the chance to try adCenter, with their lower CPCs and cost per conversion.

Guess how many clicks we got from adCenter? 10. Yes, 10. I am laughing as I type this - I honestly didn't think it was possible to get that few clicks on ANY PPC campaign, much less a holiday campaign! I'm not a PPC newbie, as most of you know, and in the 9 years I've been doing this I don't think I've ever seen a campaign get that few clicks. What a joke.

Even though the campaign didn't cost us anything CPC-wise, we spent significant time setting it up. As an agency, we're paid to work on the client's behalf, and we pride ourselves on using our time on the most highly-leveraged aspects of their online marketing campaigns. To spend time setting up a campaign, only to see it get 10 clicks, is downright embarrassing.

I find this very sad. I truly like and respect everyone I've met from the adCenter team - they're a conscientious, dedicated group of professionals, and they really do know and understand search. But for whatever reason, adCenter isn't delivering the goods. It's a shame, really. To quote Dr. Seuss, "what a shame, what a shame, what a shame shame shame shame!"

Updated at 9:45 a.m. EST:

It looks like adCenter is on everyone's mind today; check out this post from the good folks at Rimm Kaufman for more on adCenter's woes.

Using Dayparting Effectively in PPC, Part 2: Advanced Tactics

In Part 1, we talked about basic dayparting techniques, such as turning off ads during days or hours where results are poor. But what if you don’t want to turn things all the way off?

For instance, let’s say you get some conversions on the weekends – but the conversion rate isn’t as good as it is during the week. Or maybe you get lots of conversions on a Monday, but it’s really competitive, so your CPCs, and therefore your cost per conversion, are higher than you’d like. In these instances, you don’t want to shut off the weekends or Mondays entirely, because you’d lose sales, right? What to do?

This is where bid adjustment comes in. Bid adjustment is a wonderful feature, available in both Google and MSN/Yahoo, that allows you to raise or lower bids on certain days and/or times. With bid adjustment, you can increase or decrease your max CPCs, using a percentage, during days or times that you choose. Here's a screen shot of the adCenter bid boost screen, found under Campaign Settings.



Let’s take the “weekends aren’t great” example at the beginning of this post. Let’s say your weekend conversions are only worth half what your weekday conversions are worth. Use the bid adjustment feature to set Saturday and Sunday’s bids to 50%. The PPC engine will automatically reduce your CPCs by half. Pretty slick, huh?

As I mentioned in Part 1, when you’re thinking about dayparting, it’s critical to make sure you’re making the right decisions using good data. To make the right decision, you’ll need to look at a large enough set of data. As I mentioned in Part 1, you’ll need at least 100 clicks in each segment to even begin thinking about bid adjustments.

Google makes it easier to get at this data than MSN, at least the day of week data. In Google, just choose Segment by day of week and export the result. However, adCenter’s reporting by hour of the day includes conversion data, while Adwords’ reports by hour do not. (Google is missing the boat on this one, in my opinion!) If your adCenter campaign gets a lot of clicks, you may even want to review conversion data by hour, and then apply that to your Adwords campaigns, as well.

I can’t stress enough how important it is to use a statistical tool to make sure the difference in results is statistically significant. Even if you just look at conversion rate, check the day or days you’re thinking about eliminating, and compare with the other days. If the difference is significant, then go ahead and adjust your bids. If the difference isn’t significant, don’t do it! Even if you have to set the date range to the past 12 months, it’s worth it to make sure you’re making the right decision. Nothing is worse than reducing bids (and getting less traffic & conversions as a result), only to find out you’ve ended up cutting way into your sales.

When used correctly, dayparting and bid adjustment can really improve campaign performance. Look at your data and give it a try!

Beyond the Paid Makes the Best PPC Blogs List

Yesterday, the good folks at Boost CTR published The Best PPC Blogs - The Definitive List of Pay-Per-Click Blogs. It's a list of 45 or so blogs that cover PPC, and it's full of heavy hitters: Search Engine Watch, Search Engine Land, Clix Marketing, Click Equations, and more.

I'm honored, thrilled, and just a bit overwhelmed to be included in the list that's loaded with just about everyone I look up to and respect in the PPC industry. I owe a debt of gratitude to Matt Van Wagner, Andrew Goodman, David Szetela, and the great folks at Search Engine Watch for their encouragement and support over the nearly 9 years I've been doing PPC. Thanks, guys!

If you're doing PPC at all, you should be reading the blogs in the Boost CTR list. Go add them to your reader now!