In marketing, and especially data-driven channels like paid search, actionable insights are your best friend. For PPC advertisers, having the most relevant and up-to-date data possible is especially important, given that they compete in real time (usually under real budget constraints) for clicks.
In late 2013, we shared the results of a study that showed that SMB advertisers were wasting about 25% of their AdWords budget.
First of all… stop doing that. But that’s easier said than done, isn’t it?
Completing a PPC account audit is the first step to a healthy paid search account. You can perform this audit by manually diving into your PPC account data. But there are alternatives.
To analyze Google AdWords accounts and derive insights and recommendations to better optimize spend, targeting and overall performance, WordStream (my company) has developed the free AdWords Performance Grader Plus tool, which evaluates keywords, ads and campaigns using an algorithm that takes into account more than 60 factors.
In the reports it generates, you will find the following five pieces of information that are critical to the success of your PPC.
1. Click Through Rate (CTR)
Click-through rate tells you the percentage of ad impressions that became clicks. A low CTR could indicate that your ads aren’t resonating with people or that your keyword targeting is too broad.
AdWords rewards keywords/ads with high CTRs by assigning them high Quality Scores, which results in lower cost per click (CPC) and higher ad placement. Conversely, keywords/ads that fall below the expected click-through rate for a given ad spot are penalized with higher CPC and less prominent ad placement, and risk being deactivated.
The Performance Evaluator plots the CTR of your top 200 keywords by average position and overlays Google’s expected click-through rate so you can identify your “problem keywords” that are underperforming and need work.
2. Quality Level (QS)
The impact of Quality Score on your ad’s placement, ranking, and cost is huge. Google uses Quality Score to measure relevance, which it determines by considering your ad and keyword CTRs, relevance to search query and ad group, landing page and other factors.
Improving your QS can help you increase impressions while lowering your cost per click. The image illustrates the formula used by Google to determine your actual cost per click (not your maximum CPC, but the price you actually pay). As you can see, a higher QS can actually lead to a higher placement at a lower cost.
The Performance Evaluator report compares the Quality Score distribution of your active keywords to the recommended average Quality Score distribution specific to your industry, then offers actionable tips to help you improve:
In the image, you can see that the advertiser’s average Quality Score of 3.8/10 is well below the industry average, and that the account consists mostly of keywords with Quality Scores of 3 /10 and 4/10, which represents a great opportunity for improvement!
3. Unnecessary expenses
Negative keywords allow you to exclude keywords that might lead to clicks from people who aren’t likely to convert; it is an essential tool for the success of the campaign. This is an area worth optimizing for at least a few minutes a week, as your analytics and sales data helps you uncover terms that get clicks but not conversions.
This is an important metric, but difficult to assess without the aid of a tool supported by industry analysis and macro-level benchmarks. AdWords Performance Tracker Plus tracks negative keyword usage and projects the impact of further optimization in this area.
For example, in the following figure, notice that an advertiser has not added any negative keywords in the last month and last quarter. This is far less than industry benchmarks which are specific to the advertiser’s average monthly spend and industry.
This report provides an estimate of how much you wasted in the last 30 days and your projected waste over the next 12 months, based on an analysis of your account.
4. Movable preparation
The motive is huge…but you knew that, right? This year, marketers will spend approximately $13.1 billion on mobile, representing 27% of all digital ad spend. It is enormous. But is your PPC account optimized for mobile?
In the following (shocking) example, you have an advertiser who spends 54% of their ad budget on clicks from mobile, but they haven’t bothered to implement mobile advertising best practices, such as mobile ads, sitelinks, and call extensions. :
You need to understand the extent of your search marketing spend allocated to mobile devices and test the mobile compatibility of your AdWords account.
5. Adherence to PPC Best Practices
You won’t find any information in Google AdWords or Analytics about your account’s compliance with industry best practices. The “PPC Best Practices” section of the Performance Evaluator report helps uncover opportunities to optimize your network targeting, location targeting, conversion tracking, AdWords ad extension usage, and even more :
Continuously audit and optimize
Remember that AdWords is a live auction and can change quickly; if you are not in control of your account, you can bet that your competitors will beat you to it.
Ideally, you should audit your account every week or two, with daily management and optimization, even if only for a few minutes.
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What information is most important to you when evaluating the success of your PPC campaigns? Share your thoughts below.