What is it and How Does it Impact Me?
Google is a money-making machine, and the bulk of their annual revenue comes from their advertising channel. You’ve probably gotten a postcard, email or phone call from Google encouraging you to use AdWords (also called PayPerClick) to advertise your business online. Google’s ad revenue increased from $28 billion in 2010 to $36 billion (unaudited) in 2011. No wonder they’ve been pushing it so hard!
Google also has been pushing the idea that business owners can run their own campaigns. And they’re banking on you doing just that.
Many of our clients who come to us for help with their AdWords campaigns have been running their own campaigns for at least a year. Once we have optimized their campaign and their ads, on average we have reduced their monthly Google ad spend between 20-30%. On some campaigns we’ve reduced Google ad spend 50% or more! Imagine what those businesses could have done with all that extra money they paid to Google over that years’ time. And imagine how much less money Google would have made last year if everyone optimized their campaigns!
Beyond simply reducing Google ad spend, you should focus on improving Quality Scores for the campaign. This ultimately leads to improved ad positions, better click-through rates and increased conversions. You won’t hear Google’s sales force (or phone book companies pushing AdWords) focusing on improving conversions. Why? Because it’s hard work, and it is in their best interest for you to run under-performing ads. The more you increase your ad spend, the more Google and their media-buying partners will make.
So how do Quality Scores affect you? Here is a snippet provided by Google in their AdWords Help Center:
• Ad auction eligibility: Higher Quality Scores make it easier and cheaper for a keyword to enter the ad auction.
• Your keyword’s actual cost-per-click (CPC): Higher Quality Scores lead to lower CPCs. That means you pay less per click when your keyword has a higher Quality Score.
• Your keyword’s first page bid estimate: Higher Quality Scores lead to lower first page bid estimates. That means it’s easier for your ad to show on the first page of search results when your keyword has a higher Quality Score.
• Your keyword’s top of page bid estimate: Higher Quality Scores lead to lower top of page bid estimates. That means it’s easier for your ad to show towards the top of the page when your keyword has a higher Quality Score.
• Ad position: Higher Quality Scores lead to higher ad positions. That means your ad can show up higher on the page when your keyword has a higher Quality Score.
So as you can see it is in your best interest to pay attention to constantly improving your campaign and Quality Scores. And even though they are an important factor, it isn’t all that easy to find your Quality Scores in your AdWords administration panel. Many people launch their AdWords and let it run on auto-pilot. If you allow that to happen you are spending more money than you need to on your campaign, and it will be much less effective.