A basic introduction to some of the concepts.

One of the most effective selling tools for a modern software business is an online search engine adwords campaign. One of the biggest and most well known providers for this is Google. In this article we're focusing on Google Adwords because Google is the biggest search provider, however MSN and Yahoo! both also offer similar Cost-Per-Click advertising, many of the principles are the same though the detail (particularly in ranking displayed ads) is different.

Running a successful adwords campaign can look daunting if you've never done it before, and some of the things you really need to know may not be immediately obvious. Here are some hopefully useful hints and tips on maintaining a successful campaign. Please note that these are garnered from our experience, and your experience may differ.

What is an Adwords Cost-Per-Click campaign? Very much simplified, this is where you bid a specified amount of money to a search engine for a specific keyword, and every time a potential customer enters that keyword in the search engine your advertisement relating to that keyword will be displayed to the customer. If the customer clicks on your advertisement, you pay for that keyword. Note that in general, you pay for the click, regardless of whether it results in a sale.

The column on the right shows the current adwords ads being displayed for the term "ducks". Click the image for a larger screenshot.

Obviously, selecting your keywords correctly is of vital importance. For example, suppose you are selling an ezine relating to breeding rare duck breeds. You want potential customers searching for information about duck breeds. Your keywords might include duck, rare breed duck, breeding ducks, duck information, learn about ducks. Google has a really handy set of Tools for helping you find suitable keywords and estimate whether they are worth bidding on or not. For example, entering "duck" in the keyword tool box, shows you that it is highly used by the competition, so likely to be an expensive keyword and may not produce good results for you. However, "pekin duck" is much less bid on, and more likely to be a valuable search term. So, this suggests that your search terms might focus on specific breeds of duck. Also of note in the list produced by "duck", are search terms such as "wooden duck" and "rubber duck". These terms are of no relevance to you, but using the keyword "duck" will also result in you paying for clicks on these terms, unless you take action to prevent it (more on that later). Lets try entering "breeding ducks" in the keyword tool. This shows us some very interesting data. The advertiser competition on this search term is almost non existent, but there are people searching on this term. Bingo! This should be a cheap and effective search term well worth including in our campaign.

The keywords Tool in action. Click the image for a more detailed screenshot.

Now, what about avoiding paying for irrelevant clicks on your selected search terms? There are three possible ways to list your keywords. You can have a broad match, a phrase match, or an exact match. You can also list negative keywords. Negative keywords, I hear you ask? Remember the searches on "wooden duck"? You don't want those. So if you did use "duck" as a keyword, you would be well advised to list "wooden" as a negative keyword, which has the effect of removing it from your search results. Your advertisement will then not be displayed for any searches containing "wooden duck". A broad match listing will produce a variety of results based on the term you entered with additional words and variations. A phrase match listing will include all the words in your keyword in the order you entered them eg for "breeding ducks" a phrase match would include "breeding brown ducks" , "easy breeding ducks" and "breeding ducks pekin" but it would not include "duck breeding" or "breed pekin ducks". An exact match means, well, an exact match :). The ideal situation is where you have identified every viable search term accurately, and listed them as separate, exact match keywords, so that you are paying for exactly the clicks that you want... more realistically, you will probably have a mix of broad matches, phrase matches and exact matches that you have identified. If you have a campaign that is performing badly on specific keywords, it is worth trying to identify if there is a broad match culprit eg a common irrelevant search is bumping up your costs such as "rubber duck", which can be dealt with by using a negative keyword.

The next comment I have is that even though Google provides you with a whole array of numbers, statistics, graphs, and reports, running a successful campaign is more an art than a science. A lot of those numbers do not necessarily mean what you might think they mean, and sometimes Google is merely guessing. For example, Google offers conversion tracking which you can set up on your account. If you do this Google will provide you with a number for cost per conversion - how much money you spent to produce one sale of your product. That number is reliable, right? Wrong! It's our experience that in fact Google doesn't manage to track anything like the full number of sales, maybe missing as many as 2 in 3. This is because the tracking relies on a cookie that gets attached to the click a customer makes on your Google advertisement. That hopefully then remains attached to the sale process and arrives on the final confirmation page and reports back to Google. Why is this not reliable? Cookies can be deleted. They don't persist forever. Customers may switch browsers or computers. They may not actually make the purchase on the spot, but may wait days, weeks, or even months to finally decide to buy your product, which they first saw advertised on Google. So, that cost per conversion is likely to be seriously under reporting the effectiveness of your campaign. A more reliable way to test is to run the campaign for a period, then put it on hold for a week and watch your sales.

So, here's another number that doesn't mean what you think. Let's say you bid 5 cents on the keyword "breeding ducks". That means you pay 5 cents every time someone clicks on your advertisement, displayed after they searched for "breeding ducks", right? Not necessarily. You might be paying less. Here's how this works. Suppose we have three advertisers, A, B and C, each of them bidding on "duck". A has bid 20 cents, B bid 90 cents and C bid 8 cents. You'd think this would translate into B being displayed top of the page, followed by A, followed by C, and each of them paying the specified amount. Again, not necessarily. Here we introduce a very important concept you need to grasp. Google does not care primarily about its advertisers. Google cares about its users, the people who search. They put enormous resources into trying to be the best search engine, producing relevant results for its users. Advertisers interests come a long way second to this, and the way they manage advertising is weighted heavily in favour of the users. So in addition to the amount bid on a keyword, Google takes into account your Quality Score which is made up of numerous factors such as your campaign history, and the quality of your ads. The ad position is determined by Max Bid x Quality Score. This means that if A has a strong quality score and B is, for example, a new ad, A could be ranked higher than B even though B is bidding vastly more than A. The amount you pay depends on your final position, and you can expect to pay one cent more than the advertiser below you.

So, your bid is the maximum amount you are prepared to pay. You won't pay more, but you may pay less. If you don't bid enough, you may not get shown at all. Fascinating stuff isn't it? The other lesson to take away from the example above, is that your history matters. Think very carefully when setting up your campaign, and selecting your currency and account details, because you will not want to change them, resulting in losing your history for that campaign. It also pays to ensure that your landing pages are highly relevant to your keywords.

Here's another interesting discussion. What about using your competitors names as keywords? Can you do that? Well, sure you can. You can bet they're using yours. What you can't do is display a trademark or name belonging to someone else in your actual advertisement - doing this risks getting your campaign closed down by Google. Using your competitors as your keywords can be particularly beneficial if they are bigger and more well known than you. Supposing the market leader in duck breeding magazines is "Duck Breeders Monthly" then that name is going to get a lot of hits in the search engines. Arising from this, don't forget to include your own name in your keywords. You do this because your competitors are using it... you don't want the only hit that comes up on "Rare Ducks Ezine" to be an advertisement for "Duck Breeders Monthly"!

Remember I mentioned earlier that Google cares more about its users than its advertisers? This means that your keywords need to deliver. If they fail to get enough hits, you will find they are automatically made inactive. You can bid more on an inactive keyword, but if it continues to fail to deliver, it will simply become too expensive to be useable. Google wants the search results to deliver what the user is looking for, and if your keyword isn't getting clicks, it clearly isn't delivering.

There is a huge amount more to discuss and learn about Google adwords campaigns. This article has mostly focussed on keywords. In future articles I'd like to cover how to write a successful advertisement, using Google Analytics and a number of other interesting areas.

If you feel that your product may benefit from Cost-Per-Click advertising online you can sign up with Google, Yahoo! and/or MSN. Please note that it will cost you money, and may not generate any results for you, but if you get the product, the advertising and the website experience right, it can be a highly profitable way to expand your marketing.