PUBCON 2014: Hacking AdWords - Winning at PPC the Weird Way by Larry Kim, WordStream, Inc.

CONFIDENTIAL – DO NOT DISTRIBUTE 1
Hacking Adwords: Winning
at PPC the Weird Way
Larry Kim (@larrykim)
Founder/CTO, WordStream, Inc.
March 19, 2014

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Larry Kim (@larrykim) #wordstream #pubcon

Epiphany #1:
What is Quality
Score and Why
Does it Matter?

How Quality Score Impacts Ad Position
• AdWords is Like Real Estate: It’s all about
Location!

How Quality Score Impacts Actual CPC

Epiphany #2:
What’s an
Average Quality
Score in 2014?

Avg. Quality Score Has Been Falling.
• Today, average score is 5/10. Previously was 7/10!

Cost Per Conversion Greatly Impacted by QS

The Impact of Quality Score on Cost Per Conversion

Epiphany #3
How is Quality
Score Calculated?

QS is Based on Your CTR vs. Expected CTR!

Quick Recap So Far
1. QS plays huge role in
determining CPC and Avg.
Position and cost per
conversion
2. QS is largely based on
beating the expected click
through rate for your ad
position
3. So Winning at AdWords
Requires Writing Ads with
Above Average CTR.

Epiphany #4:
Google Expects
(Much) More Of
Your Ads

Which Ad Wins?
a)Ad A
–32,423 Impressions
–453 clicks (1.4% CTR)
–Average Position: 2.8
b)Ad B
–36,223 Impressions
–760 clicks (2.1% CTR)
–Average Position: 3.0

Trick Question! Both Ads Suck.
• Neither ad is worth declaring a “Winner”.
• Not even the 2.1% CTR in the 3.0 Avg. Position.
• Why??

What’s a Good CTR?

• Even the “Winner” is a Loser!

Even the “Winning” Ad is a Loser!

Epiphany #5:
What’s a Good
CTR These Days?
(You’d be
surprised)

What’s a Good Search CTR? (Account Avg. CTR’s)

But Lots of Variance!!

Under-Performing vs. Unicorns
Percentile Vs. Expected
CTR
Name
Bottom 50% Below Expected
CTR
Under-
Performing
Advertisers
Top 15% 2X Higher Awesome
Advertisers
Top 5% 3x Higher Super Awesome
Advertisers
Top 1% 6x Higher!! Unicorns

@larrykim
Unicorns?!
(6x Avg. CTR!)

What Unicorns (Top 1%) Look Like

Ad Text Testing
• Same Story – 20% of Ads Generate 92% of Spend
• 20% of Ads Generated 65% of Impressions
• But CPA, CTR, and Conversion Rates vary
@larrykim, @perrymarshall

1. Keywords With High Commercial Intent

2. Dynamic Keyword Insertion (DKI)

2. DKI Doesn’t Produce As Many Unicorns

3. Ad Extensions Impact on Quality Scores

3. Ad Extensions Impact on Click Through Rate

Epiphany #6
How To Write
“Unicorn” Ads

4. Most Ads Suck. Create Emotional Ads.
36

Creating “Emotional” Ads

An Example:

Versus…

Epiphany #7
You Need To Test
100 Ads To Find 1
Unicorn.

Relative Abundance
Name Percentile Relative
Abundance
Vs. Expected
CTR
Awesome
Ads
Top 15% 1:6.7 2X Higher
Super
Awesome
Ads
Top 5% 1:20 3x Higher
Unicorns Top 1% 1:100 6x Higher!!

You’re Not Testing as Many Ads as You Think…

Epiphany #8
It’s Not as Hard
As You Think

Most Small Businesses Aren’t That Active

85% of Impressions are From 5% of Ads

Epiphany #9
Life is Great for
Unicorn Accounts

Here’s What It Looks Like IRL
• Grade Your Account at
http://www.wordstream.com/google-adwords

Quality Score Average of 8.8/10!!

14% Click Through Rate!!

Consistent Account Activity

Mostly Targeting Long Tail Keywords!

Negative Keywords

89% Impression Share

Epiphany #10
Life Stinks for
Low QS Accounts

The Bottom 4% of Accounts IRL

Avg. Quality Score 3.8/10

Avg. CTR of 1.32%

No Activity in Last Quarter

Awful Keyword Targeting

No Negative Keywords

61% Impression Share LOST

Epiphany #11
Don’t Pursue
a Low CTR
Strategy
(Low QS)

Quick Recap
1. Low CTR = Low QS
2. Low CTR ads don’t
even get displayed
3. They get penalized with up to 400%
higher CPCs
4. Dramatically increases cost per
conversion

Epiphany #12
How to Scale
Your PPC?

Quick Recap
1. Above Average CTR
Keyword/Ads = Great
Success.
2. Below Average CTR
Keyword/Ads = Train Wreck
3. So … Delete the bottom
third of your account and
re-deploy that spend to
remarketing

Average CPC’s by Industry and Network

Average Conversion Rates by Industry

Average CPA’s for Search & Display, by Industry

Your Questions
Thank You PUBCON!
Benchmark your AdWords account today!
http://www.wordstream.com/google-adwords
Today’s Slides:
http://bit.ly/hacking-adwords

PUBCON 2014: Hacking AdWords - Winning at PPC the Weird Way by Larry Kim, WordStream, Inc.

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