The PPC market has seen several changes over the past few years. Among the most significant changes have been those made to the bidding model. Originally, the bidding system was very easy to understand; to obtain a desired ad position, you simply needed to bid one cent higher than the advertiser in that spot.
When Google AdWords arrived, it introduced a new performance-based pricing model using what they refer to as “quality score” to determine cost per click (CPC) and ad position. Initially, quality score was determined by click-through rate (CTR) and maximum bid. However, today Google uses a much more complex formula to determine quality, including the following factors:
* Click-through rate
* Maximum bid
* Ad text relevance
* Ad performance
* Keyword relevance
* Keyword performance
* Landing page relevance
* Landing page performance
Performance-based bidding models are now being used by each of the first tier search engines (Google, Yahoo! and MSN). We are provided with guidelines on how these scores are calculated, but the exact formula is proprietary information. Generally speaking, they use a different combination of these and other undisclosed variables based on performance relative to one another.
The important thing to note is that in order to maximize the ROI of your PPC campaigns, you must address each of these variables in your strategy. Lower quality scores can lead to higher click costs, lower ad positions and fewer ad impressions.
There are several different tactics that you can use to optimize your quality score. They typically involve modifying campaign settings, editing ad copy, adjusting bid and match options, refining keyword lists and enhancing landing page content. In this post I have outlined some suggestions that have been proven to work for our clients.
Create a Focused Campaign Structure
The way that you set up your PPC campaigns is one of the most crucial aspects of a successful project. Quality score is partially based on a combination of relevance and performance; therefore, it is important that you create a highly focused campaign structure. Having large keyword lists containing unrelated terms and/or overly generic ad copy can cause your quality scores to decrease. Take the extra time to create targeted ad groups with highly relevant keywords and ads that are based on a common contextual theme.
If you are working with very large keyword lists, think about ways to break them up into smaller, more targeted groups. To help you organize your keywords, AdWords Editor offers a tool called the Keyword Grouper. The Keyword Grouper will organize your keywords based on common themes found in your list.
When structuring your campaign, target your ads by location and language (where applicable) and never include the same keywords in more than one group. After your campaign has been launched, and you have some data to work with, another good tactic is to separate your top performing terms into their own ad groups. This will allow you to further improve the performance of these keywords while testing different ways to improve the relevancy and performance the less successful ones.
Take Advantage of Negative Keywords
Although they can significantly increase ad performance and reduce overall costs, negative keywords are often overlooked and under-used. You can use negative keywords to improve the performance of your ads by restricting them from being displayed for unrelated searches.
If you were advertising a DVD sale, for example, you wouldn’t want your ad displayed for searches related to “rental” or “burning”, because neither term is inline with the focus of your campaign. Using these terms as negative keywords will stop your ads from being shown for searches that include them. Reducing ad impressions for irrelevant searches will improve your overall CTR and strengthen both the relevancy and performance of your keyword list. This will help you achieve a higher quality score, lower your cost per acquisition and increase your ROI.
Use Targeted Ad Copy
Once you have segregated your keyword lists and selected negative terms, you can then create unique ad copy for each ad group. Do not use the same ad copy across all of your ad groups. Come up with ads that are as specific and relevant as possible to the contextual theme of the keywords being targeted.
A common PPC best practice is to include your keywords in your ad title, ad copy and display URL. A good way to approach this is to use dynamic keyword insertion (DKI) (which is probably a good topic for a future post). In addition to improving your CTR and conversion rate, using keywords in your ad copy will increase your ads relevance to each term. All of these factors can contribute to achieving a better quality score.
Stay tuned for Part 2 of this post when we will discuss more ways to optimize your PPC quality score, including ad testing and landing page optimization.