AdWords is such a sophisticated platform, that in order to fully understand it and be able to use it effectively, you’ll not only have to read up about it, but also have a good hands-on experience. It’s that complicated because there are numerous targeting options and because they have many system rules for pricing and ranking the ads.
Google takes many factors into consideration and combines them into one score, the Quality Score: each keyword we target gets one. We eventually want most of our main keywords to reach a Quality Score of 10 in order for us to have great exposure. At the same time, we will be able to get more quality visitors on our website at the least possible expense.
There are many things we can do to decrease the cost per click, so let’s get started!
1) Increase the Click-through Rate of our Ads
Our CTR tells us how many people click our ads out of every 100 times our ad is displayed. When we create advertisement texts or images for our campaign, we’re trying to appeal to the visitors of Google and intrigue them enough in order to click the ad and see what we have to offer. Ad creation is a mixture of art and science because there are so many things that you can do to make your ad perform better or worse: one article alone is not enough for me to explain! We have to test different approaches on our ad’s copy, and see which one performs better. For example, having a college/university website to promote, we can focus on explaining to the viewer the advantages that they will gain from attending that particular college or get them nervous that there’s no time to lose – if they don’t make that decision, the competition will leave them behind. While this example is a bit extreme, you get my drift!
Having 2-3 ads for every AdGroup we create is a necessity. We’ll have to leave them running for a few thousand impressions in order to see which ad performs better, then keep that ad, and test again with a new ad.
What is a good “click through” rate for AdWords?
I can’t give you a precise number on what CTR you should aim for because every language and every niche has a more engaged audience or less. As a rule of thumb, my record CTR is 14% and I always try to optimize my campaigns until I reach at least 2-3%.
Why CTR Plays an important role on the price we’ll pay per click
Let’s take as an example two companies, company A and B.
Company A has a 2% CTR as an average and pays 25 Cents / Click.
Company B has a 9% CTR as an average and pays 10 Cents / Click.
At a first glance, someone would guess that Google would prefer company A because it pays 15 Cents per click more (more than double the price company B pays). But that’s where we would be wrong! Google has a “pool” of visitors searching on its search engine every single day. For these visitors Google wants to maximize its profits; therefore, it doesn’t just look at how much each company pays per click but pays much more attention to how much money it can make per 100 impressions (different pages seen). Therefore in the end…
Company A pays Google 50 Cents per 100 Impressions
Company B pays Google 90 Cents per 100 Impressions
Therefore Company B’s ads will be displayed first, and the quality score of company B’s keywords will increase. So if company B lowers the click price from 10 cents to 6 cents, it will still be shown first in the ads and profit more from people visiting their website. That’s why raising your ad’s CTR is THAT important if you want to lower your costs.
HUGE TIP: Apart from testing different kinds of ads, one great tip that works amazingly well for my campaigns is to pay more than needed in the beginning of each campaign. For example, if for an ad to be shown, 30 Cents per click are needed, I’d pay 50 or even a bit more on some days. This would make my ads appear first almost always, and therefore get a good CTR from the beginning. So spending some more money at the beginning, will save you a lot more in the long run! You’ve got to try it ;)
2) Keyword Relevancy and Landing Page Quality
Google cares a lot for its reputation and therefore, pays a lot of attention to the Keyword Relevancy. If for example your ad is about dog training and the landing page you take your visitors when they click the link talks about something else, even slightly close (e.g. dog food), Google gives a lower quality score to that keyword. The more the keyword is far from the subject of the landing page, the worse your Quality Score will be.
Case Study Result: I once tried to bring in people with the keyword “image hosting” to a games site. The cost per click was calculated to $5 per click. If my site was actually about Image Hosting, it would cost less than 10 Cents / click.
Solution: We should try to create a different AdGroup for every group of keywords that we have. For an interior design retail store we would create one AdGroup for Leather Couches (containing all the possible keywords around leather couches), one for interior lighting, and so on and so forth. That would make Google look good since the ad would be about leather couches and the landing page would be exactly that and not the main page. Doing that will help you increase your quality score a lot! It is given that if you make the AdGroup about leather couches you should also create a specific landing page that contains everything about leather couches so that the whole experience for the visitor would be very optimized. Google loves that.
HUGE TIP: Creating different AdGroups, landing pages and ads for each group of keywords, gives you another great advantage against your competition. It is very likely that when someone searches for a keyword containing “leather couch”, your ad title or text will contain those exact words since you have created an AdGroup about it, so this text will appear as bold text, increasing the likelihood of the visitor of Google to click your link dramatically, and not someone else’s that couldn’t be bothered to create many AdGroups and landing pages ;)
Landing Page Quality is the quality of the code of your landing page together with all the tags and images etc. The basics of On-Page SEO apply here. To understand the additional changes you should make to your landing pages, read more: what is search engine optimization, how to write for the search engines, Meta Elements and proper image tagging.
Also keep in mind that the less HTML and CSS errors your site has, the better.
3) Landing Page Load Time
The time it takes for a site to load has lately become very important for Google. And it’s makes sense: when someone clicks a link from Google to another domain, especially if it’s an ad, he/she doesn’t want to wait a lot for the page to load. Subconsciously the wait makes the user “unhappy” and that is transferred to Google’s image. If the page is loading fast, that will give a small boost to our Quality Score. The easiest and fastest things we can do is to choose a good host and cache your pages.
4) Targeted Countries
The countries we target play an important role on how much we’re going to pay per click. It’s logical that a visitor from US is going to cost a lot more to target than a visitor from Greece.
HUGE TIP: What I’m doing when I want to target many countries is to make a campaign targeting USA and Canada, then replicate the whole campaign with AdWords Editor (tutorial coming soon…) and change the countries targeted to make the second campaign target the good European countries. Last but not least the third one will target the rest of the world.
Doing the above, I am able to change my pricing according to the countries I target and therefore control every aspect of my campaign perfectly.
Competition is another HUGE factor on how much we’re going to pay for every click. It’s logical that when a keyword is targeted by many Advertisers, it will be more expensive than one that no one targets.
To check your competition, the easiest thing to do would be to go to Google and search for our main keyword. See if all spots are taken or if there are available ones. If not, the keyword is ours for the taking! (there’s a chance that a keyword that we enter with no advertisers won’t be available because it has low search volume).
Solution: If you’re on a competitive market we can easily outperform our competition (once again) by going for long-tail keywords. Long tail keywords are those keywords are keywords that are not searched that often but they get some searches per month. These add up to a good sum if you gather up many of them and one thing is for sure, people who search with long tail keywords are much more focused and ready to buy! Do read the article about long tail keywords, it will really help you understand how you can use them to your advantage!
Last but not least, what also affects the prices that you’re going to pay for your ads is your:
6) Current Account standing
Lately Google has incorporated another metric determining how much you will pay for your ads. Your account history. If your account is completely new it will take some time to get things started. The same happens if your old account had many experiments, many ads rejected, banned keywords and low CTR campaigns.
CASE STUDY: Having a very old AdWords account and learning by doing mistakes, when Google tweaked their algorithm to include this metric, I wanted to create a new campaign. As you can imagine it wasn’t performing great but since the new campaign was very targeted and generally a very good campaign, all it took was $400-500 in clicks to bring back my account to a normal status.
Doing all of the above will really help you understand how pricing works and how you can benefit from a good quality score. If it’s worth starting an AdWords campaign for your website, use the above advice and start outperforming your competition!
From your experience, have you got any more tips that helped you get a better quality score and lower prices? It would help a lot to contribute to this post!