How to win at AdWords the Weird Way

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

2. Win This $25 Amazon.com Gift Certificate!!
• Include the hashtag #wordstream
and #pubcon in your tweets
• May the best tweet win! :)
Larry Kim (@larrykim) #wordstream #pubcon

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

7. How Quality Score Impacts Ad Position
• AdWords is Like Real Estate: It’s all about
Location!
Larry Kim (@larrykim) #wordstream #pubcon

8. How Quality Score Impacts Actual CPC
Larry Kim (@larrykim) #wordstream #pubcon

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

10. Avg. Quality Score Has Been Falling.
• Today, average score is 5/10. Previously was 7/10!
Larry Kim (@larrykim) #wordstream #pubcon

11. CONFIDENTIAL – DO NOT DISTRIBUTE 11

12. Cost Per Conversion Greatly Impacted by QS
Larry Kim (@larrykim) #wordstream #pubcon

13. The Impact of Quality Score on Cost Per Conversion
Larry Kim (@larrykim) #wordstream #pubcon

14. Epiphany #3
How is Quality
Score Calculated?

15. QS is Based on Your CTR vs. Expected CTR!
Larry Kim (@larrykim) #wordstream #pubcon

16. 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.
Larry Kim (@larrykim) #wordstream #pubcon

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

18. 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
Larry Kim (@larrykim) #wordstream #pubcon

19. 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??
Larry Kim (@larrykim) #wordstream #pubcon

20. What’s a Good CTR?
Larry Kim (@larrykim) #wordstream #pubcon

21. • Even the “Winner” is a Loser!
CONFIDENTIAL – DO NOT DISTRIBUTE 21

22. Even the “Winning” Ad is a Loser!
Larry Kim (@larrykim) #wordstream #pubcon

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

24. What’s a Good Search CTR? (Account Avg. CTR’s)
Larry Kim (@larrykim) #wordstream #pubcon

25. But Lots of Variance!!
Larry Kim (@larrykim) #wordstream #pubcon

26. 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
Larry Kim (@larrykim) #wordstream #pubcon

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

28. What Unicorns (Top 1%) Look Like
Larry Kim (@larrykim) #wordstream #pubcon

29. 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

30. 1. Keywords With High Commercial Intent
Larry Kim (@larrykim) #wordstream #pubcon

31. 2. Dynamic Keyword Insertion (DKI)
Larry Kim (@larrykim) #wordstream #pubcon

32. 2. DKI Doesn’t Produce As Many Unicorns
Larry Kim (@larrykim) #wordstream #pubcon

33. 3. Ad Extensions Impact on Quality Scores
Larry Kim (@larrykim) #wordstream #pubcon

34. 3. Ad Extensions Impact on Click Through Rate
Larry Kim (@larrykim) #wordstream #pubcon

35. Epiphany #6
How To Write
“Unicorn” Ads

36. 4. Most Ads Suck. Create Emotional Ads.
36
Larry Kim (@larrykim) #wordstream #pubcon

37. Creating “Emotional” Ads
Larry Kim (@larrykim) #wordstream #pubcon

38. An Example:
Larry Kim (@larrykim) #wordstream #pubcon

39. Versus…
Larry Kim (@larrykim) #wordstream #pubcon

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

41. 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!!
Larry Kim (@larrykim) #wordstream #pubcon

42. You’re Not Testing as Many Ads as You Think…
Larry Kim (@larrykim) #wordstream #pubcon

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

44. Most Small Businesses Aren’t That Active
Larry Kim (@larrykim) #wordstream #pubcon

45. 85% of Impressions are From 5% of Ads
Larry Kim (@larrykim) #wordstream #pubcon

46. Epiphany #9
Life is Great for
Unicorn Accounts

47. Here’s What It Looks Like IRL
Larry Kim (@larrykim) #wordstream #pubcon
• Grade Your Account at
http://www.wordstream.com/google-adwords

48. Quality Score Average of 8.8/10!!
Larry Kim (@larrykim) #wordstream #pubcon

49. 14% Click Through Rate!!
Larry Kim (@larrykim) #wordstream #pubcon

50. Consistent Account Activity
CONFIDENTIAL – DO NOT DISTRIBUTE 50

51. Mostly Targeting Long Tail Keywords!
Larry Kim (@larrykim) #wordstream #pubcon

52. Negative Keywords
Larry Kim (@larrykim) #wordstream #pubcon

53. 89% Impression Share
Larry Kim (@larrykim) #wordstream #pubcon

54. Epiphany #10
Life Stinks for
Low QS Accounts

55. The Bottom 4% of Accounts IRL
Larry Kim (@larrykim) #wordstream #pubcon

56. Avg. Quality Score 3.8/10
Larry Kim (@larrykim) #wordstream #pubcon

57. Avg. CTR of 1.32%
Larry Kim (@larrykim) #wordstream #pubcon

58. No Activity in Last Quarter
Larry Kim (@larrykim) #wordstream #pubcon

59. Awful Keyword Targeting
Larry Kim (@larrykim) #wordstream #pubcon

60. No Negative Keywords
CONFIDENTIAL – DO NOT DISTRIBUTE 60

61. 61% Impression Share LOST
Larry Kim (@larrykim) #wordstream #pubcon

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

63. 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
Larry Kim (@larrykim) #wordstream #pubcon

64. Epiphany #12
How to Scale
Your PPC?

65. 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
Larry Kim (@larrykim) #wordstream #pubcon

66. Average CPC’s by Industry and Network
Larry Kim (@larrykim) #wordstream #pubcon

67. Average Conversion Rates by Industry
Larry Kim (@larrykim) #wordstream #pubcon

68. Average CPA’s for Search & Display, by Industry
Larry Kim (@larrykim) #wordstream #pubcon

69. Your Questions
Thank You PUBCON!
Benchmark your AdWords account today!
http://www.wordstream.com/google-adwords
Today’s Slides:
http://bit.ly/hacking-adwords
Larry Kim (@larrykim) #wordstream #pubcon