Mr. Jeffs founded Lucidica in the mid-noughties and is now their CTO.
Thomas began by explaining that ‘Adwords’ declares itself to be ‘frighteningly simple’. Thomas had to agree with their statement, but only to a certain extent. Thomas also mentioned in his opening remarks that although Adwords is a PPC service specific to Google, that its practices often recur on Bing or Facebook advertising, for example.
Adwords are simple, Tom explained, in that Google will not let you spend more than your Adwords budget. However, the manner by which the cost of your adwords ad is determined, and other behind-the-scenes workings, are not as straightforward as Google would have you believe.
Tom knows adwords like the back of his hand, and he provided some top tips on how to get the most from your adwords account.
Adwords: An Intro
Adwords ads are the paid-for advertisements that appear at the top and cascade down the right of your screen when you search using Google.
On Adwords, you pay for every click that you receive. The cost-per-click is determined by a combination of your maximum-willingness-to-pay (MAX CPC) and the maximum-willingness-to-pay of those who also wish to advertise on your keyword.
Therefore, those with the biggest daily spend are more likely to ascertain the top adwords position on Google. How does that all work? Tom gave us the lowdown...
Adwords is all about Statistics
Tom explained that the key-terms that adwords users need to learn are: Impressions (or IMPR), clicks, click through rate (CTR), average position (Avg Pos), average cost per-click (CPC), maximum cost-per-click (Max CPC), cost per-thousand (CPM) and ad quality (Qual Score).
Impressions are the amount of times that your advert has been seen - whether it has been clicked or not does not matter. If you search ‘Pork Sausages’ on Google right now and don’t click anything, the ads that appear will have amassed another impression. Therefore, if your IMPR is 100, 100 people have seen your ad.
Clicks are, simply, how many clicks that your ad has received. This stat is directly linked to the cost of your ad.
CTR is ‘clicks’ divided by ‘IMPR’. 1 click from 10 impressions is a CTR of 10%. It is a useful metric that gives adwords users a good idea of how well their ad is performing. Thomas’ rule of thumb is this: if you have a niche keyword, such as ‘pork butchers in Enfield’, then a CTR of 20% is good. If you have a more generic keyword - ‘pork butchers’ - then 2% is more realistic.
Average Position is the on-page position at which your ad most frequently appears. If your adwords ad’s avg pos is 2.5, you can deduce that it regularly appears at either the 2nd or 3rd ad spot. Using adwords’ tools, you can specify that you want your ad to only appear in the top three positions, for example. This will effect your CPC and the frequency at which your ad appears (not every adwords-ad appears every time its keyword is searched), but it will make your ad more visible.
Your Max CPC is the most money that you’re willing to pay for one adwords click. Your avg pos is a direct result of your Max CPC. When you select your Max CPC Google shows you what other users of your keyword pay-per-click. You can alter your spend accordingly.
Avg CPC shows you how much you pay per-click over a certain period. This is a useful metric as the costs you PPC changes all the time! As you can image, the CPC is prone to fluctuation, as the the cost of a click is determined by the amount of bidders on the keyword.
CPM (cost per thousand) is another metric that helps users to determine values: the cost that you’re paying per thousand impressions - not clicks.
Your Qual Score works thusly: 10/10 = amazing, 1/10 = please try harder. This score is determined by Google’s secret formula of ‘ad relevance’. Tom has a good idea of how ‘ad relevance’ is worked out. On a normal adwords account, the AdQuality column is turned off - you can turn it on. Do it!
Ad Relevance and your Qual Score
What you have to do to attain maximum ‘Ad Relevance’ is kept secret by Google, and some are sceptical as to the formula. However, Tom has some ideas of how to get your Qual Score as close to ten as possible.
If the text of your adwords ad contains the word ‘pork’ but your landing page does not, then your qual score goes down. Make sure that your landing page is as relevant to your adword’s text as possible. It is best, also, if your landing page isn’t written on flash, as Google doesn’t like flash too much.
Your adwords QualScore is also effected by your CTR. If your ad has a low CTR then Google assumes that your ad is poor, and gives you a lower score.
Furthermore, your QualScore is affected by the historical performance of your adwords account - not just the current campaign that you’re running! If you have had 5 ads that didn’t perform well (with an average score of 3/10, for example), and other ad that scores 9/10, your CPC will be more than most.
Tom also believes that ‘Google Bounces’ are used to determine your qual score. A ‘Google Bounce’ is when a user clicks your ad, and within five seconds clicks ‘back’ and lands on Google again. Google believe this bounce-back to be a signifier of your advert’s irrelevance and may adjust your QualScore accordingly.
Your QualScore is very important: the lower your score, the more you pay for your ad. It makes sense as Google would rather host ‘better’ ads.
Matching and Why Tom doesn’t like it
Tom says that Google’s practices - such as ‘Phrase Matching’ and ‘Broad Matching’ - skew your results as they match your adword-phrase to other phrases that their algorithms assume are relevant.
This can go well: if your adword-phrase is ‘IT support London’ this can match with ‘IT support within London’. However, it can also go very badly. ‘IT support London’ can also be matched with ‘Victim Support in London’. We know this is as ‘IT support London’ was Lucidica’s adword!
Google also offer ‘Broad Matching’ - ‘IT Support’ turns into ‘Computer Support’. However sophisticated a system, computers have a notoriously bad appreciation of synonyms. It is due to this reason that Tom declared: for small business, broad matching and phrase matching is rubbish.
Why is it rubbish? It can easily drive up your cost-per-click.
As your Qual Score takes ‘relevance’ into account, if your advert is placed - by phrase/broad matching - into a context that doesn’t suit it, your quality score could go down as your ad will not be relevant to its surroundings. Therefore, if your ad’s QualScore goes down, your CPC goes up!
Tom’s advice: Turn Broad and Phrase Matching off! You are perfectly able to and it will, most probably, be a good move.
For further advice on ROI, how Google Analytics can work with Adwords and Content Networks - when your advert is hosted by Google on other sites, such as The Telegraph - and other adwords phenomena, jump onto @clubworkspace and look for the #lucidica tag.
Thanks to Thomas for some excellent advice, and we hope to see him in a Club Workspace venue soon!