As a Google adwords advertiser you compete in an auction every time a keyword prompts your ad to be shown. Many advertisers, however, do not realise how complex that auction is. Find out more about how Google Adwords ranks your ads and how you can establish a profitable strategy for your online business.
Understanding the Way Google Adwords Ranks PPC Bidders
An understanding of the way Google Adwords ranks PPC bidders is essential in establishing a profitable PPC strategy. Here is an overview on how Google ranks your ads:
1. Every time your ad is triggered an auction takes place. Google ranks the ads by Ad Rank. The Ad Rank is determined by the following calculation:
Ad Rank = 'Maximum Cost Per Click' x 'Quality Score'
As you can see, your ad rank is also determined by your Quality Score. This means a competitor who has a better quality score than yourself can actually rank above you for a lesser cost per click (CPC).
Taking this into account, it is your goal to achieve the highest possible position for the lowest possible cost. How should you go about doing this? Firstly you should understand what the quality score is and how you can achieve a good one.
Understanding the Quality Score
The way in which Google calculates your quality score is unknown. However, Google do tell us many of the factors that determine your quality score:
1. A keyword's click through rate (CTR),
2. The historical performance of that keyword,
3. The relevance of text in your ad
4. The relevance of the keyword to its ad group
5. The quality of your landing page
6. Other relevancy factors.
Now that you know the fundamentals about how the Google Adwords auction operates; how can you leverage the competitive PPC arena in your favour?
Optimising Your Google Adwords Account
In recent times the competition for broad key terms, such as 'shoes', for example, has skyrocketed, resulting in higher cost per clicks for such terms.
By targeting more specific key terms, such as 'tennis shoes' or 'buy platform shoes', where the competition is less aggressive, you are able to capture a large amount of traffic for a substantially lower cost-per-click.
This is known as targeting the long tail of search. While the key terms that fall into the 'long tail' are searched for less often than those broader key terms at the 'head', there are far more specific keywords than there are broad key terms, so it is possible to leverage the long tail to receive as much or even more traffic for substantially less money.
On top of the benefits above, mining the long tail enables you to target your market more specifically. As a result this is likely to increase your quality score, and in turn your return on investment (ROI).
Achieving a Better Quality Score
If you have multiple products or services, it is possible to group them separately into categorical groups and make each ad group's ad text and landing page specific to each product/ service.
By creating advert text that better matches the users search query it is possible to increase the CTR. Moreover, by creating tailored landing pages specific to the product/ products the user is searching for, it is possible to increase the number of conversions.
The benefits described above all contribute to a better quality score. Because of this ranking algorithm it is possible for advertisers with a good click through rate to achieve a higher position for a lower CPC than their competition – and hence long tail adverts often appear higher in the Google results than general keywords, even though they are paying less per click.
Summary
Optimising a PPC account to achieve optimal results can be a very complex process. Firstly you will need to build the long tail. This will involve a lot of keyword research, taking into account category and product keywords, localization, common spelling mistakes, call to action keywords etc.
Secondly, to make the most of those long tail keywords, an advertiser will need to have very specific ad text. When dealing with hundreds of products it is tricky to generate a unique text ad and landing page for each one, but this is essential in maintaining a good CTR. PPC management companies will often have their own in-house tools to achieve this.
Testing ad text variations and testing landing pages are also important steps in achieving the most from your advertising spend. However, the most important step is measuring and managing the ROI on each keyword. Since the PPC arena is a constantly changing environment, constant monitoring is essential. The value of every keyword is constantly changing therefore it is essential that you work on a keyword management strategy to deal with this. Bid management tools can be especially helpful here, or a third party PPC Management Company.