Google is getting real aggressive on their ploys to get small businesses to start using AdWords to drive increased sales to their business.  You may have seen an email come through your inbox recently which looks really similar to this:

Sounds enticing, right?  Well, unbeknownst to the small business owner, this program is called “Google AdWords Express” which is a service designed by Google where they will set up your campaign for you, and give you a $500 credit if you spend at least that on your first month.  They’re like the “drug dealers” Jason Fried talks about in his book “Rework”, where they get you a taste for free, knowing you’ll be back for more with cash in hand.

Well, there are a couple of problems with this program.

1) I’m not sure I trust Google setting up my campaign for me.  If the end-all goal is to please shareholders, and that means increasing revenue through the cash cow, which is most certainly AdWords, then what incentive do they really have to optimize my campaign as a small business to get the highest amount of leads for the lowest cost?  If you’ve seen the AdWords interface lately, you might notice that a lot of the tools and campaign optimization techniques are all really designed to get you to increase your budget.  OK, fair enough.  Except:

2) The AdWords Express program doesn’t allow for conversion tracking!  What the f@!%  That’s right….the AdWords Express is pretty much all automated with very limited analytics and tracking.  Store owners are going to have to rely on the old unreliable question of “where did you hear about us?”

I guess the one benefit the AdWords Express program does have is that many of the cost-per-clicks (CPC’s) on keywords are less than what you would be paying in the traditional AdWords program.   That means for words you may be paying $2-$3 per click already, could cost as low as $0.80 in some cases.  In others, like more competitive terms, the rates are about the same.

One company reportedly canceled their subscription because they found Google was bidding on their own brand name.  In other cases, Google was able to get better performance by splitting ads into separate groups, like one for “dog washing” and one for “dog sitting” – something a small business owner trying to manage an AdWords account wouldn’t know to do otherwise.

At the end of the day, if a small business is spending $50/day or more on AdWords, you need a certified professional to help navigate the waters for you.  If you’re spending less than that, then give AdWords Express a shot.

Why Small Businesses May Want to Avoid AdWords Express is a post from Pear Analytics, an SEO tools and software company.

A while back, we wrote a post suggesting that Google serves up its own products over other brands in organic search.  It’s pretty obvious – just type in words like “voice”, “images”, “maps”  or even “plus” and Google assumes you’re looking for their products.  How convenient.

Well, they’re at it again.

A story reported by TechCrunch’s Eric Schonfeld yesterday identified a “classy” move by Google, whereby they bid on the keyword “yelp” to serve up an ad which takes you to Zagat.  On the surface, no big deal, right?  Companies bid on other competitors’ names ALL THE TIME.  The only rule is that you are not supposed to use a trademarked name in the actual ad itself (like it is here).

courtesy of Mashable.com

In fact, here is the official statement from Google, which says in part:

“Google recognizes the importance of trademarks. Our AdWords Terms and Conditions prohibit intellectual property infringement by advertisers. Advertisers are responsible for the keywords they choose to generate advertisements and the text that they choose to use in those advertisements.”

So how did this get through the Google AdWords filter?  Clearly, this misleads the person searching for Yelp.  If you’ve run a PPC campaign lately, it’s not all that hard to get a “your ad has been declined” message, prompting you to dig a little deeper to make sure you’re not using any trademarked words, or among other errors, doing any kind of “bait and switch” tactics.

Ah, well it gets better.  It turns out Google actually purchased Zagat last month (Sept. 2011) for some $151 million.  How convenient that this ad wasn’t “disapproved” by the Google catch-all filter.  It is for this exact reason Google also had to take the stand in front of Congress last month.

Google Violates Its Own Policy (Again) is a post from Pear Analytics, an SEO tools and software company.

In one of our recent blog posts, we posted an ROI calculator that helps you figure out whether you’re getting enough value from what you spend on SEO by targeting the right keywords. The results were based on an extremely conservative “fudge factor,” or an estimated margin of error, of about 90%, meaning that we only used 10% of given search volumes in our calculations. However, the numbers weren’t all adding up, so we conducted an experiment using several websites. The results showed some rather major discrepancies in the search volume numbers returned by Google AdWords.

Currently, Music.com ranks #2 for the keyword “music” on Google. According to Google AdWords, this should give them a high percentage of the estimated 124,000,000 global searches that Google says occur monthly. Using the belief of Chitika Research Director Daniel Ruby that ranking #2 for a specific keyword will earn you about 17% of all searches (we use 16.96% in the ROI calculator), Music.com should be getting 21,080,000 visits from the keyword music alone per month. This may seem like an attainable goal for a keyword as common as “music,” but based on traffic estimates from Compete.com, the actual number of hits Music.com gets from this keyword is nowhere near 21 million.
So there appear to be three logical explanations for this discrepancy. First, the percentage of a given search you can expect to secure is unrealistically high. Second, the Google AdWords tool is overestimating the monthly global searches. Or thirdly—both are correct. Our initial hypothesis was that the second option was the most likely, given the large amount of research done by Chitika on the traffic percentage of Google’s search results. Our experiment’s procedure looked like this:

Step 1: We identified 4,000 sample keywords from 7 websites which we have Google Analytics data for (Peer1.com, Serverbeach.com, Voxeo.com, Music.com, Brandstack.com, Unbounce.com, and Missionrs.com)
Step 2: We then found the Google rankings for all 4,000 keywords.
Step 3: We then sorted the 4,000 keywords by the best ranking to the worst ranking and narrowed the list down to the words which ranked in the top 10 results (roughly 1,000).
Step 4: For the remaining words, we gathered the individual search volumes (broad, global)
Step 5: Next, we went to each sites respective Google Analytics account and pulled the actual traffic from each keyword.
Step 6: Per each SERP, we took the actual visits and compared that number to how many Chitika’s calculations would project it should get. The percentage of difference between the two numbers is what we call a “fudge factor”, or the percentage that Google AdWords inflates the global search volumes for a given keyword.

The results of the experiment told us two things: firstly, that Google AdWords was significantly overestimating search volumes and secondly, that this overstatement tended to rise exponentially with popularity of a keyword. Looking at the necessary deflation of Google AdWords’ search volumes for the top ten rankings on Google, we found that, on average, AdWords is overstating global search volume by 42.29%. This fudge factor is an important part of our ROI calculator and determining realistic traffic figures. So if, for example, you were to try to target the keyword “cheap dedicated hosting”, it would be wise to apply this 42.29% fudge factor to Google AdWords’ estimate of 8,100 monthly global searches.

So ranking #1 “cheap dedicated hosting” would earn a website 1,606, not 2,782, because of this 42.49% fudge factor. This is demonstrated on the graphic below.

The graph below illustrates our second finding: Google AdWords exponentially overstates search volume as search frequency of keyword increases. The Y-axis shows the true market share of a given keyword by a website which ranks #1 for that keyword and the X-axis show Google AdWord’s estimated volume. As you can see, once the search volume moves past 3,000, it becomes extremely difficult to obtain any sort of significant share of the searches. The market share is certainly nowhere near the 34.45% warranted by ranking #1. The data for the second through tenth position tell a similar story. It seems the only way to obtain a decent percentage of hits for a keyword is to target and rank for moderate keywords. So while a fudge factor of 36.8% is a good average to use, this will typically need to be increased for higher search volume keywords and decreased for lower search volume keywords. You can see from the graph below that, on smaller keywords, the market share is as high as 160%. Obviously, this isn’t accurate either, so while a fudge factor is an important factor in calculating traffic, it is far from an exact tool.

The take-away from this experiment is to exercise caution when targeting a specific rank and market share for keywords if you are relying on Google AdWord’s estimation of search volume. While it may not be an exact figure, we recommend using 42.29% as your fudge factor. This number becomes more subjective when dealing with extremely high or low volume estimations as well. For very large keywords, with volumes of 15,000 or greater, an accurate fudge factor would be about 90% and for smaller keyword, under 1,500 searches, the fudge factor is actually under stated by about 60%. The range on these percentages, although just an estimation, shows the inconsistency of Google AdWords’ estimations. The bottom line is if you’re going to spend a majority of your budget trying to target a specific position for a high traffic keyword, just know that the reward is a slice of a much smaller pie than Google would have you believe.

How Accurate are Google AdWords Search Volumes? is a post from Pear Analytics, an SEO tools and software company.

There are two main problems being a startup: 1) we have limited capital which means we can’t waste money on poorly performing campaigns (which is a good thing, actually); and 2) as founders we have to do everything ourselves and learn all of this marketing stuff, and its usually the hard way.

So, here are 4 easy ways you can increase your AdWords conversion rates by 3 o’clock this afternoon.  This is the stuff I experimented with, and I went from a 12% conversion rate to a 56% conversion rate and it now performs better than our organic traffic most of the time.

1. Believe it or not, certain times of day perform better than others.

At 12 midnight your ads will start appearing, and if you’re like us, your measly single-digit daily budget will be gone by the time you wake up in the morning.  First, try to get your budget to last through a good part of the day.  This is tough if you bid on expensive keywords, but start by turning the ads on by 8am.  My guess was I might get a “better” crowd of folks in the morning, than the wee hours of the night.  I did notice an uptick in conversions by playing around with the time of day my ads turn on.

2. Set a daily budget, not a total budget.

In AdWords, you have two ways to pay for ads: set a max spending limit, and Google will deduct from the budget until it is exhausted; or set a daily budget, and once you’ve hit the daily limit, your ads turn off until the next day.  IMHO, choose the latter, because if you’re not on top of this, Google will blow through your max budget before you even blink and eye.  In my case, choosing the latter option meant I could only make a $7 mistake (yes – sadly, that’s our daily budget).

3. Use exact match phrases, not broad (for now).

My advice would be not to go too crazy with keywords, especially broad match keywords (Learn the difference between broad, phrase, exact match and negative keywords here). I started with maybe 10-20 keywords MAX, and I made them all “exact match”.  I wanted to make sure the folks who saw my ad were for the exact words I was targeting.  Some may argue I’m missing out on a lot of opportunity by not using a broad match strategy, but my argument is that I don’t have that much time to spend managing this, and I’d rather cut out as much waste as possible in the beginning.

4. Manage the content network yourself, not Google.

Okay, this is the most important one out of the 4 items in this list, and here’s why: when you choose the strategy of a few keywords with exact match as pointed out in #3, you will get 90% or more of your clicks from Google’s content network (there’s simply not enough in the search network to go through your budget yet).  The problem I found was that Google was putting our ads on what I thought were completely irrelevant websites.  Now I’m sure Google corrects itself and they simply cast a wide net to see what they can catch, and optimize from there (if you let them), but I didn’t want to spend the money waiting for them, so I optimized it myself.  I noticed this because I saw that I was getting a decent amount of clicks, but the conversions on the other end sucked.  They were at somewhere between 8-12% (organic converts at 55-60%, so this better improve or I was going to kill it from the budget).  So in your campaign, you can choose to manage all of the website in the network that YOU want your ad appearing on.  Just go to Opportunities > Placement Tool, and you can actually search for sites by keyword.  Instead of having our ads appear on 300 irrelevant sites, I narrowed it down to about 50 highly relevant sites.  And then BAM!  300-400% conversion improvement in 48 hours.  It worked so well, that I’ve decided to keep it in my marketing budget.

Startups: 4 Ways To Increase Conversions in AdWords is a post from Pear Analytics, an SEO tools and software company.

That’s right – you can’t measure everything online that you might think.  Analyzing click traffic on websites has become much more difficult to get anything close to accurate.

One of the most difficult problems to solve is the issue with giving proper credit to the “original source” of the lead or sale.  Some of the PPC systems refer to this as the “assist” and they pass special tracking cookies to the user that will help indicate in the click stream data future visits from this user.  This typically helps credit PPC campaigns and reduces the cost per acquisition (CPA) for that channel.

This is great, but it is flawed.  This generally assumes that the visitor used one computer, and few of us use one computer.  We usually have an office computer, a home computer (we have 2), plus mobile devices.

Consider this situation (which is probably quite typical):

1.  Husband is searching for vacation spots for his family during his lunch at work.  He does several searches, including hitting a few paid ads.
2.  He runs out of time and has to get back to work, so he emails himself the links to the pages of the sites he liked to his home email account so he can show his wife later that evening.
3.  He gets on email at home and pulls up the pages on his home computer to show his wife and kids what he found.
4.  They continue to do more research and even bookmark a few sites/pages and will revisit in a couple of weeks so they can think about it.
5.  They revisit the site a few weeks later by hitting the saved bookmark and from there, decide to purchase.

Now in this case, it’s going to be virtually impossible for the marketer to track this sale all the way back to the paid search ad because he lost him as soon as he switched computers (if he is even using cookie and campaign tracking in the analytics software).  And if this happens often enough, he will think his paid search campaign is ineffective because it is not driving any sales.

Newsflash: most people don’t buy anything on the first visit!

There is likely going to be multiple interactions, extensive research, bookmarking, etc. before any purchase is made over a several-week (depending on the product) sales cycle.

Secondly, consumers are not going to be as compulsive in a down economy and are going to be looking around for deals, so we can’t possibly expect them to purchase on the first visit from a Google ad.

So what can we do about this?

Well, not too much, unfortunately.  However, if you have an e-commerce site selling any sort of products, you can reduce this phnomenon by simply having a “Favorites” or “Wish List” area of the site where a user can quickly and easily open a free account and save what they like straight on your site. This would eliminate the need to bookmark and email and cookie track everything.  You would have all of the data on your site, and now you could even do session tracking by username and get other interesting information (beware that session tracking has additional privacy issues that you will want to look at closely).

Many of the large sites like Amazon, eBay and others have this feature, but even for small or medium sized business, most of the 3rd party off-the-shelf e-commerce applications (like X-Cart, Magento) have Wish List capabilities.

Happy tracking!

You Can’t Measure Everything Online is a post from Pear Analytics, an SEO tools and software company.

Let’s say you have a PPC campaign running with lots of variations in ads, ad groups, messaging, etc. You even have micro and macro conversion goals set up in your PPC campaign and assigned each of them a value. You’ve organized everything in to groups for testing, but you just aren’t completely sure which combination of test variables is working properly.

Here’s how to know which PPC ad group is working:

1. Determine what the value of your conversions are. This can be subjective, so use your judgment based on what the sale is worth.  If a sale is worth $100, maybe a form submission for a lead is worth $10. If you have an e-commerce site, than include the value of a sale, perhaps in net terms.  (We can determine what the max amount we should spend on a lead by looking at how to measure cost per acquisition.)

2. Compare your ad groups side by side, looking particularly at what the ad group cost, total conversions generated, and total conversion value.

3. Divide the total conversion value by the total amount spent on the ad group.  This tells you how much you earned in value for every dollar spent. In the example below, Campaign #1 earned $4.11 for every $1 spent on advertising, while Campaign #2 earned $6.81 for every $1 spent.

We call this the Value-to-Spend Ratio. It helps quickly evaluate your campaign if it has lots of ad groups.

If you have an example where your Value/Spend ratio is less than 1, that means you are earning less than you are spending, so you will need to decide if that ad group should continue or not.

Here are two ad groups shown side by side:

On the surface, Campaign # 1 looks like a better performer.  It had a higher click-through rate, more ad clicks, more conversions and $67 more conversion value.  Even the average CPC between the two campaigns are identical.  But Campaign #2 spent less than half the money to get only 21% less value.

A lot of people might assume Campaign #1 as the winner here, but we disagree because of the Value-to-Spend Ratio.  We like this measurement technique because it is agnostic of the various types of conversions and conversion values.

Try it, and let us know how you made out!

How to Know Which PPC Ad Group is Working is a post from Pear Analytics, an SEO tools and software company.

We just finished putting together a comprehensive online ad campaign using Google AdWords for a hospital in Chicago. We needed to create four campaigns centered around “heart attacks”, “heart disease” and other cardiovascular related topics. The set up work was kind of exhaustive as we scrubbed the keywords for searchability, effectiveness, competition, and average cost per click. We also set up a strategy for each landing page, remembering some of the rules about good landing page design. Then we needed to determine what we were going to track in the campaign in order to compute the real return on investment, or ROI. If you use AdWords’ Conversion Optimizer, it will kind of give you an ROI, but in terms of the ad spend, cost of acquisition, conversion values and some other things. However, the ROI extends beyond the campaign since there is activity that drives leads to the client that AdWords can’t track (that I am aware of); in our case with the hospital, consultations scheduled, consultations completed and ultimately, procedures. Well each of these has value that must be calculated as part of your ROI on the campaign. Quite simply, we can define ROI in the following manner:

where the total benefits are all of the conversions and their associated values along the way, and the total costs are what the campaign cost with click expenditures, web design, development, tracking, analysis, account service and more. In the end, we set up 8 different conversions that were cross-utilized in the other ad groups and landing pages, so when you add it all up, there were over 25 points of conversion – all having value to the client.

So we can easily see here under the “Conversion Tracking” menu that so far, only after a day of running the campaign, we have 54 conversions on Zip Code Entry. Well, we have several ads that drive you to a landing page that ask for a zip code before you can use the risk assessment tool, so if I click on each conversion, I get the following:

and now I can see that the Zip Code Entry was most successful on the Cardiac Risk Assessment Calculator conventional ad, run 1 (I talk more about how to set up AdWords campaigns for maximum efficiency and results in another post). Overall, I’m getting an 84.38% conversion rate on this particular metric, which is very good. This says that most people are OK with giving you a zip code in order to use something of perceived value, or to get to the next step in the process. So, during the campaign we will add up all of our conversions, multiply them by their respective values, and divide by campaign cost. This method will show your client much more value of what the campaign is extracting, rather than just looking at click through rates (CTR’s) and ad conversion rates.

How do you calculate ROI for online ad campaigns?

Using Conversion Tracking in AdWords to Drive Real Return on Investment (ROI) is a post from Pear Analytics, an SEO tools and software company.