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Archive for July, 2010

Conversions are Event Based

Posted by Bob Dumouchel in adwords expert

Wednesday, July 28th, 2010

My conclusion is that conversions are driven by events, not advertising.  The role of Adwords isn’t to make a sale. Adwords acts as a conduit for the transaction when the searcher has been driven to action by an event. Now, let’s look at some facts to see if you agree with how I got there.

Recently a client had their industry mentioned on Oprah and the traffic and leads exploded. We have another client that does snow removal and snow storms drive their business, not advertising. Advertising has a role in the process but it is the event that creates the demand. The event is followed by the interaction with the advertisement which can lead to the conversion. It is a chain of events and advertising is not the creator of the demand, but rather the conduit of the demand.

People shift into procurement mode because some event moved them to action and it is very rare that the event is advertising.  Most businesses ask a new customer “How did you find us?” but they rarely ask the real question of “What caused you to start looking?” We look to measure performance of advertising based on responses, but in reality it is the events experienced by the person that puts them into procurement mode.

The Event Circle of Influence

Events come in many forms; some are widely shared while others are within a much smaller circle of influence.  At one end of this spectrum would be an event like September 11th which was a shared event with most of the population of the world, while a smaller event might be a snow storm in rural Wisconsin. When we look at events in the market we have to consider the circle of influence and adapt our advertising strategy to accommodate this reality. A snow storm in Wisconsin does not create demand for Snow Removal in New York.

The Oprah Effect is an event created by Oprah mentioning a product or service on her show.  Recently we had a client that experienced the Oprah Effect and the lead generation was incredible. There was no change in the keywords or ads but there was no mistaking the lead generation impact. The event did impact the bids because competitors are smart and they quickly realized that the demand was going to be responsive so they bid up the positioning in a big way and we had to react to that. It was a thrilling ride while it lasted, but events do not age well.

Another client sees this frequently but at a much smaller scale. They will have zero response from a specific part of the country followed by a flood of leads. Our guess is that there is a local event that causes people to think about issues related to their business. These events create demand that morphs into searches and ads that people click on to get to the landing page where the sales lead is created.  The ad did not create the event but it was part of the pipeline that allowed the lead to flow to the business.

Another real world example is a client in the moving industry. We are always looking to create more leads with less money, but in reality Adwords is not causing people to need moving services. There are lots of reasons to need a mover but none of them are created by Adwords text ads with 95 letters and spaces. Change of job, spouse reassignment, foreclosure, and many other personal events are what drive this business and create the traffic.  Some  advertising can create an event but that ability varies by format and I think it fair to say that an Adwords Text Ad is about as weak as you can get in this area.

The next logical question is can you create events for your business and the answer is yes, but creating events is not like running an advertisement.  In advertising, we pay for the placement so we have some degree of control over it but events are different. First, they require much more creativity and in most cases they require the involvement and engagement of other people. Developing events is way beyond the scope of this article, but the reality is you can create events. We talk with clients about this all the time because you need to have your advertising in sync with your event initiatives to get the entire marketing ecosystem working together.

People are the sum of their experiences and we are all driven by events in different ways. What motivates one person can and does leave others unimpressed. The key to your Adwords strategy is to recognize the events that drive your business and make sure you are in position to be found when the prospect is moved to action by the event.

Awesome Adwords Performance

Posted by Bob Dumouchel in adwords

Wednesday, July 28th, 2010

More is not better, better is better. This is true in Adwords as it is in most things. If you want awesome performance from your Adwords account, and your idea of awesome performance is a better conversion cost, then you need to embrace this concept.  We often hear from businesses after they have violated this rule by throwing more and more keywords at Adwords and their performance is in the toilet. The cure is always a return to quality.

When people first start with Adwords, they often throw every keyword they can think of into the system, they wonder why the system crumbles at their feet.  The problem is that more is not better. The first words they thought of are probably their best words, so it only goes downhill from there. Keywords are not as simple as Boolean good or bad. Words exist in a range of quality so they slowly degrade and you have to decide when to stop. It is never clear cut. Keywords typically have a structure to them that includes a base keyword, keyword qualifier, and Keyword Intent.

Base Keyword: Drywall

Keyword Qualifier: Contractor

Keyword Intent: Quote

The example for this would be if your business did drywall installation. A great keyword would be “Drywall Contractor Quote”.  When you have a base, qualifier, and intent it is often a home run keyword. The challenge is that it is probably a low volume keyword because every word you add to the keyword reduces the number of searches it will match to.

When going after awesome performance, one thing you have to examine is the click through rate (CTR) and its cousin quality score. Look at your average CTR and then create a filter to look at your keywords that drag this down. Normally I start with half of the average so if the account has a CTR of 1% then I look at keywords that have some level impressions that are less than or equal to 0.5% CTR. Then, I start asking myself questions about why the CTR is low:

  1. Is there a relationship between the keyword and the ad?
  2. Is the position where it needs to be?
  3. What do the competitive ads look like?
  4. What is the quality score?
  5. Do you really want this word?
  6. Does the keyword have a good base, qualifier, and intent?

If you cannot get at least average performance out of the keyword, then you need to consider deleting it from the account because it will pull down the overall quality of the account.  Many people think that just because you pay by the click that you should not be concerned with the impressions or the CTR but the system does care. A low CTR will lower your quality score. Since your bid is really bid times quality score, a low CTR will ultimately result in a higher bid to hold the same position. Quality Score and Money are the same thing to Google and you need to respect that fact.

The general rule of thumb is that the higher the quality, the lower the quantity and this is what makes people crazy. They always want more but they have to realize that they are sacrificing quality for quantity. If you want quantity simply do away with the qualifier and the intent and you will get the maximum volume, but your quality score will fall and your bids will have to be increased to keep your ad showing. If your quality score or CTR gets too low no amount of money will make your ads show.

The next area in your keyword strategy is the conflicting uses of the keywords. The most common of these is the conflict between service, product, DIY, and research.  If you are selling a product, then you have to be careful about how much service, DIY, and research traffic you attract with your keywords. This gets much more complex because words are not good or bad, they are better or worse. If we are selling Gold Widgets then we probably want to avoid traffic seeking to have their widget serviced or seeking information on how to build their own widget. Again these words are not clearly in one area or another but rather in a spectrum between the different concepts.

My favorite example of this challenge is Drywall because it plays into all these different areas. Consider the following searches: (Click on graph for better detail)

Awesome Adwords Performance

This data is from Google Insights and it gives us some idea of how these keywords play with each other in search. The top line is Drywall How To, which indicates to us that 75% of the total search of all these keywords is in the DIY category. If we are selling a drywall service or product, we really need to get rid of the how-to traffic. The Chinese Drywall shows how an event can impact your keywords. Prior to late 2008, the term Chinese Drywall was not even on the chart but then a media event broke on this term and the traffic went through the roof. If you were in the Drywall business and did not go in and remove Chinese from your traffic then the quality of your traffic would have fallen like a rock.

The other observation of this data is that the more qualified terms like price, cost, and contractor are only a small percentage of the overall traffic. Let’s look at just how insignificant some of these terms really are. (Click on graph for better detail)

In the chart above, the broad keyword of Drywall is the top line and you can see that terms like price and cost only get 1-2% of the searches. If you qualify your words to this level you are only seeing 1-2% of the searches however if you stay with the overly broad term then only 1-2% of your impressions actually mean anything to you.

Drywall is an interesting example because it can be a service, product, DIY, or research term. When qualified by cost, it is probably a product but quote is just as likely to be a quote for service as a quote for product even though both of these terms are price class qualifiers.

Keywords also change based on the point in the purchase cycle and the life experiences of the audience. The purchase cycle typically includes research, qualification, purchase, experience, and referral. The keywords change as the audience moves through each of these stages.

Life experiences change the way that the audience interacts with your keywords and it does make a difference if Vietnam was a life experience or a history class lesson.  If you are to get awesome performance from your Adwords, you must become one with the audience and see the keywords and the ad copy through their eyes.

If you want maximum volume, you go after Drywall but you should not be surprised when you get Google Slapped on your quality score for being lazy.