4th May 2012
5 Common PPC Management Myths
As a PPC manager there are key signals we look out for to make performance measurement easier and quicker. We use these as indicators to let us know if further investigation is needed, whether it's because we think there's a problem, or because performance is good and we want to see if we can maintain or improve it.
However, sometimes these signals aren’t always what they seem and measuring performance on them can be dangerous.
Here's our list of five common PPC myths:
1.Spending more results in more conversions
Spending more does not always mean more conversions. There are three main ways to throw cash at a campaign: increasing your max CPC bids on existing keywords, targeting more expensive broader keywords and increasing campaign budgets.
Increasing max CPC bids: This is likely to lead to higher ad positions and ads in higher positions tend to receive higher CTRs. Ads with high CTRs get clicked by more people meaning more potential customers could be visiting your site, so therefore you could expect to see more conversions. However, if you have limited campaign budgets you could end up spending more on fewer clicks and therefore could end up seeing fewer conversions.
Targeting expensive broad keywords: Bidding on broad keywords with high search volumes will definitely get you more impressions. However, unless the product you are selling is relevant to what people are searching for you will not necessarily see any more clicks or conversions. For example, if you have a women’s boutique shoe shop and start bidding on the term “shoes”, your ad will show for “men’s shoes”, “children’s shoes”, and “cheap shoes” - none of these terms are relevant so you shouldn’t expect an increase in (relevant) clicks or conversions. Whilst you can add negative keywords to filter out irrelevant impressions, your ad will still show for those people who are searching on “shoes”. These people could still only be interested in men’s shoes meaning your ad still won’t get clicked and certainly won’t lead to a conversion.
Increasing campaign budgets: Making sure you have a large enough campaign budget for your ads to show throughout the day is important and can aid conversion rates. If someone clicks your ad in the morning but isn’t ready to buy at that time and then performs the same search in the afternoon you want to make sure your ad is still showing so they can find you easily. If your ad is not there then they will find someone else to buy from. If generally you are not seeing many conversions you might want to check that your website is optimised and that you are bidding on relevant terms before you increase your campaign budgets.
2.Higher CPC bids will always lead to higher ad positions
AdWords uses many things to determine your ad’s positions in an auction. Two of the things considered include the max CPC bid and the quality score of a keyword. Increasing a max CPC bid won’t guarantee a better position as you the person above you could be bidding more or have a better quality score or both. Even if you increase your bid you may still be positioned below your competitor.
In order to make sure you pay the lowest CPCs for the best positions concentrate on your quality score as well as your max CPC bids.
If your position does improve with a simple CPC increase then great! However remember that the person below you could always bid more next week. Before bidding more remember to consider your ROI/performance targets. If your ROI is good even when you’ve increased bids you're in a good position. However if your ROI is poor be careful not to end up in a bidding war you can't afford.
3.The more keywords the better
There is no need to put every possible keyword you can think of into a campaign, it won’t help performance. If you use modified broad match most of the long tail keywords will get picked up. Adding tons of low volume keywords to a campaign means you will have an account full of keywords that never see any impressions – this can actually be detrimental.
Take a look through your search query reports to see keywords that frequently generate ad impressions – where relevant add these keywords to your campaign. Remember that you don’t need to add plurals, misspellings and close variants as now even exact and phrase match options will pick these up. Go for quality, not quantity.
Be careful when using location targeting, Google uses IP addresses to determine where a customer is located, however IP address aren’t always accurate.
5.Enabling all ad extensions
While ad extensions do make your ad stand out and can lead to higher CTRs, you need to consider what type of business you have and whether all of the ad extensions are suitable for you. If you are an online business operating from your home address you may want to rethink adding location extensions to your ads. Do you really want your home address showing in an ad and people turning up at your door? If you add call extensions to an ad people are possibly going to call you before they even look at your website, if you are happy to talk to anyone, great! However if you would like people to know more about you before calling or if you have multiple numbers that they can call, you might want to make sure they visit your site before picking up the phone.