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Strategies for taking advantage of new AdWords system
What's your suggestion?
eWhisper

WebmasterWorld Administrator ewhisper us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 6116 posted 1:13 pm on Aug 17, 2005 (gmt 0)

With every new AdWords change, there are always new strategies that evolve to take advantage of the system changes. This thread is specifically for strategies for the new min cpc system, for other posts please see the bottom of this post for links.

1. Launching new products
In the past, it's been very difficult to launch a brand new product with search. With new products, often you need to create search volume & awareness. If no one knows of a product name, no one searches for it.

The first thing that came to mind when I heard about this system was: I can bid on keywords like Google, Microsoft, AOL, help, information, windows, etc without being disabled?

How to take advantage of this?
These campaigns are not about clicks. They are about impressions. Impressions are free. The ability to bid on these high volume keywords, even with a high min CPC, to create total impressions could be very effective. The ability to get a new product in front of potentially millions of people a day, essentially the same as a banner campaign (without the CPM cost), without worrying about disabled keywords can be very powerful.

Creating ads that bring awareness to a product, but do not induce clicks would be a skill in itself. How many new products would love to get 1 million impressions, 10,000 clicks (a 0.1% CTR, respectable for totally non targeted keywords) a day?. Even if the minimum KW cost rose to $5/click, that is essentially a $0.05 CPM - try finding that CPM anywhere else on the net.

Obviously, a second campaign should be launched to take advantage of those actually searching for the product you're creating awareness for.

There's definitely some potential to use this strategy for more than new product launches, but a product awareness campaign like this would be interesting to test.

2. Demographic Targeting
I've run several campaigns that are based around keywords that target a demographic, not necessarily related to the search in question.

This strategy involves looking at who buys a particular product, or offer (the same way email/direct marketing/snail dm works), and then finding searches/products that fit that demographic, and pushing a product/offer through that particular channel.

Keywords like 'buy trucks online', 'psp hacks', 'cosmo quizzes', each target a particular demographic.

At present, about 25-%75% of all demographic based keywords are disabled due to low CTRs (and it's often the higher search volume ones).

This keyword disabling now goes away. If general interested demographic traffic can be converted (and it can), then suddenly this opens up a much more stable way to use keyword demographic targeting for many offers.

Of course, ROI must continue to be measured, but a good offer should convert 2-15% of all users (depending on price points, offer variables, etc). Being able to determine a profitable keyword bid (just like any other search based keyword), and then target demographic based keywords based upon a particular bid means that a whole new set of keyword inventory is open for testing.

Your stratedgies?

These are my initial two strategies for the new system.
Comments?
Your strategies?

----
Comments complaining about the new system will be deleted. Please keep this thread about stratedgies and comments about these targeting systems. For other info on the new system, please post in the appropriate threads below:

General discussion: [webmasterworld.com...]
Feature requests: [webmasterworld.com...]
How it's impacted your account: [webmasterworld.com...]

 

inasisi

10+ Year Member



 
Msg#: 6116 posted 2:24 pm on Aug 17, 2005 (gmt 0)

How many new products would love to get 1 million impressions, 10,000 clicks (a 0.1% CTR, respectable for totally non targeted keywords) a day?. Even if the minimum KW cost rose to $5/click, that is essentially a $0.05 CPM - try finding that CPM anywhere else on the net.

Well actually the CPM is ((10,000*5)/1,000,000)*1000 which is a hefty $50. I think that is a lot. So I don't think the CPM model is still effective with this change in Adwords.

eWhisper

WebmasterWorld Administrator ewhisper us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 6116 posted 3:00 pm on Aug 17, 2005 (gmt 0)

Sorry, missed a few decimal points in my math, posting before 3 cups of coffee again ;)

The initial trial was a 0.003% CTR, and the effective min bid was $0.30. This leaves a $0.90 CPM if my math is correct yet.

I believe it's a very viable strategy based on min CPCs, conversion rates, and advertiser goals. Just a few math issues to work out first.

running scared

10+ Year Member



 
Msg#: 6116 posted 3:34 pm on Aug 17, 2005 (gmt 0)

Not quite sure what the technical term is, but the idea of targeting people whose search term suggests they will probably be in the market for what you offer in the near future (may just be a variation on the demographic concept!)

e.g. someone searching for "starting new business" will probably need an accountant soon.

The question is whether or not ROI targets can be met.

toddb

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 6116 posted 5:25 pm on Aug 17, 2005 (gmt 0)

One really nice thing about this is lower cost items might get some play. We have had campaigns at just slightly under break even before that we paused. Now they might get new life.

Eurydice

5+ Year Member



 
Msg#: 6116 posted 5:32 pm on Aug 17, 2005 (gmt 0)

eWhisper is using the New Fuzzy Math :-) The idea is valid. A nationwide advertising rollout is measured in millions of dollars. Spending $30-50,000 to get an ad in front of hundreds of millions of users would be quite good. This is a good idea. You can now bid on vague phrases ("It's the Real Thing!") and get top ranking.

There will be "strong fluctuations" in the next week or so, as people adjust their bids. Someone said in another thread that "nobody will bid if the cost is above the profit margin". Oh, yes, they will. The large majority of advertisers aren't using conversion tracking, ROI metrics, and so on; they don't know what the real costs are. So they engage in what economists call "irrational bidding". Which means we should wait for a week or two until this calms down.

dmorison

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 6116 posted 5:33 pm on Aug 17, 2005 (gmt 0)

I can bid on keywords like Google, Microsoft, AOL, help, information, windows, etc without being disabled?

What about the human review process? Surely your ad still has to comply with the basic T&C's concerning relevancy etc., regardless of the new algo.

eWhisper

WebmasterWorld Administrator ewhisper us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 6116 posted 5:54 pm on Aug 17, 2005 (gmt 0)

What about the human review process? Surely your ad still has to comply with the basic T&C's concerning relevancy etc., regardless of the new algo.

Outside of the basic editorial requirements (found here: [adwords.google.com...] ), ads being disabled have been due to CTRs, not relevancy. Technically, Google does have a relevancy requirement, but it's rarely enforced.

Maybe they'll have to start enforcing it again, maybe...

I've been using demographic based targeting for a few years on AdWords and haven't had keywords disabled due to relevancy reasons - it's always been due to ad CTR.

markus007

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 6116 posted 6:55 pm on Aug 17, 2005 (gmt 0)

That is exactly what i started doing the second the system went live....

If your selling creditcards or any other high ticket item you can now flood unrelated 5 cent terms and make a killing.

gopi

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 6116 posted 7:13 pm on Aug 17, 2005 (gmt 0)

>> If your selling creditcards or any other high ticket item you can now flood unrelated 5 cent terms and make a killing.

I thought about the too and saw some listings already .But the problem is sooner or later google will disapprove unrleated keywords .For me it happened many times before even for slightly related keywords

>> I've been using demographic based targeting for a few years on AdWords and haven't had keywords disabled due to relevancy reasons

I am surprised eWhisper .I tried the same technique several times this year and everytime they will disapprove the keywords in a week or two!

ajwebmaster

10+ Year Member



 
Msg#: 6116 posted 3:13 am on Aug 18, 2005 (gmt 0)

dumb question:
does the ad group overall click-thru matter?
if you have low CTR on certain word - say widget - does a low CTR on one word in the AD group have an effect other terms in the same ad group?

lammert

WebmasterWorld Senior Member lammert us a WebmasterWorld Top Contributor of All Time 5+ Year Member



 
Msg#: 6116 posted 6:38 am on Aug 18, 2005 (gmt 0)

These campaigns are not about clicks. They are about impressions. Impressions are free. The ability to bid on these high volume keywords, even with a high min CPC, to create total impressions could be very effective. The ability to get a new product in front of potentially millions of people a day, essentially the same as a banner campaign (without the CPM cost), without worrying about disabled keywords can be very powerful.

eWhisper,

I think you made one thinking error. In order to keep your keyword active, you have to increase your bid, OR increase the quality of the keywords. My understanding is, that AdWords will increase the needed bid when the quality of the keyword (CTR) decreases in a campaign. I have seen this in my campaigns. In one campaign I only have to pay 0.05 for a specific keyword where in another campaign I pay 0.10 because the CTR in that campaign is less.

Doing some math, I think that AdWords enables a keyword in a campaign, if BID * CTR >= minumum value. Lets see, BID * CTR is CPM! So I strongly believe they introduced now the CPM as their system wide value to disable keywords instead of a fixed CTR value of 0.5. Everyone with bad performing ads is now allowed to show them, as long as they are willing to pay the higher associated cost per click. The trick that you propose to have advertising for very low CPM was possible in the old system if you were able to keep CTR just above 0.5%, but has now effectualy been disable. Instead AdWords will increase your minimum bid gradually until your CPM reaches their minimum allowed value.

mlalex

10+ Year Member



 
Msg#: 6116 posted 12:40 pm on Aug 18, 2005 (gmt 0)

Has this change plugged the gap between those smart advertisers and not so smart ones?

I believe it is almost a level playing field. simply black or white. active or inactive

Now, after creating a new campaign we need not have sleeples nights worrying about the "on hold" "disabled" or whatever. I can create a campaign, fix the bid and rest assured that it is running and hoping to making profits. Instead of spending all the efforts in managing adwords, now we can spend our time & energy on finding new niches. Isnt it?

Will this change make any difference in adsense earnings?

I could be wrong! future will decide that.

eWhisper

WebmasterWorld Administrator ewhisper us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 6116 posted 12:47 pm on Aug 18, 2005 (gmt 0)

Just a branding FYI, actual numbers across a few groups I'm testing for CPM purposes:
5099 impressions - cost $0.18
829 impressions - cost $0.05
1569 impressions - cost $0.13
998 impressions - cost $0.02

BillyS

WebmasterWorld Senior Member billys us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 6116 posted 12:51 pm on Aug 18, 2005 (gmt 0)

Creating ads that bring awareness to a product, but do not induce clicks would be a skill in itself. How many new products would love to get 1 million impressions, 10,000 clicks (a 0.1% CTR, respectable for totally non targeted keywords) a day?. Even if the minimum KW cost rose to $5/click, that is essentially a $0.05 CPM - try finding that CPM anywhere else on the net.

Just so everyone is following the math...

a 0.1% CTR on 1,000,000 impressions would be 1,000 clicks (not 10,000, which is 1% of 1,000,000).

Following through with the example:

1,000,000 x 0.1% = 1,000 clicks x $5 = $5,000

The CPM would be $5,000 / 1,000,000 x 1,000 = $5.00

crisscross

10+ Year Member



 
Msg#: 6116 posted 1:30 pm on Aug 18, 2005 (gmt 0)

1,000,000 x 0.1% = 1,000 clicks x $5 = $5,000

The CPM would be $5,000 / 1,000,000 x 1,000 = $5.00

The CPM in the example is the same as the CPC. So $0.50 CPC would give $0.50 CPM, which seems quite good to me.

Of course this will only work with certain products. Due to constantly inactive keywords I had been frustrated using the old system to promote a new product. Now the issue is fixed I will try again...

uhzoomzip

5+ Year Member



 
Msg#: 6116 posted 3:53 pm on Aug 18, 2005 (gmt 0)

If I understand correctly ewhisper is talking about how much it costs per impression when he is talking about cpm.

So $5000 for 1,000,000 impressions (he is branding a product) would mean that if you wanted to measure how many times your product brand was displayed you would divide $5000 by the number of times the ad was shown to a user 1,000,000. That gives me .005 cents per time his ad was displayed.

Just because there is an impression though doesn't mean someone saw it. So unless you were getting the top spot it seems like it would be somewhat hard to measure how effective the branding was but at .005 cents it seems like it wouldn't be too big a deal.

I think I'm right here but am open to correction.

Shane21

10+ Year Member



 
Msg#: 6116 posted 5:08 pm on Aug 18, 2005 (gmt 0)

" you can now flood unrelated 5 cent terms and make a killing"

Hmm I beg to differ.. just exactly how much of a killing are you going to make on the conversion rate from "jars of pickled roll mop herring" as an unrelated term if you are selling credit cards?

Google aren't going to let this happen surely as they are always harping on about "user experience" and ads for credit cards when they are looking for a specific product can't really be counted as "relevant".

Hmm can't wait for the 2 million ads of "save on that widget by paying for it with your new #*$!x credit card now"

gopi

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 6116 posted 5:25 pm on Aug 18, 2005 (gmt 0)

>> save on that widget by paying for it with your new #*$!x credit card now"

Trust me i kinda tried the same (not selling a credit card) some time ago and all my keywords got disapproved :)

figment88

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 6116 posted 6:27 pm on Aug 18, 2005 (gmt 0)

lammert is absolutely correct - Google has changed the disabling criterion from minimum ctr to minimum cpm.

Google will keep raising your cpm on irrelevant ads until it nolonger makes sense for you to run them.

The big question then becomes how fast does Google adjust? Can you get in some good quantities of impressions before you're priced out of the game.

BornBusy

5+ Year Member



 
Msg#: 6116 posted 7:10 pm on Aug 18, 2005 (gmt 0)

We have seen a variety of different results for clients and former client campaigns.

Client campaigns, for the most part, had well optimized terms that were all producing a >4%CTR (under the previous Adwords module). Most client campaigns weren't affected by the change. Although we had one client ad group for a high-volume, low CTR term (paused) until the QBS Adwords took effect. After the QBS took effect we turned on that ad group and was able to garner ~500 impressions and 1% CTR - in this case we had the # 1 position for $0.15/CPC (there were only 4 ads). However, several hours later we noticed that the ads were inactive due to low CTR (low QBS) - to reactivate this ad group we had to set the minimum bid to $0.30 (and now there are only 2 ads for this term).

In reviewing the QBS with a non-client - we noted that several of their previous bids were $0.46/CPC and Google set their minimum QBS bid at $1.00, even though there were only 2 other competing ads.

And while we did see a handful of client keywords show-up for the "elusive" $0.01/CPC under the new QBS system; for the most part - this simply looks like an overt (or maybe covert) attempt to control the market.

While in the long run, the new QBS (quality-based score) may produce a better caliber ad for the Google search audience; in the short term QBS may end up driving advertisers away from Google.

And it doesn't appear that you will be able to "take advantage" of the new AdWords QBS system - with a straight CPM approach. Otherwise, we would not have seen a 100% CPC increase in the two cases outlined above.

In theory, to avoid paying the QBS surchage to reactivate inactivated keywords - you would have to make sure that your terms maintained a high enough CTR to pass the QBS threshold. We presume that the CTR threshold is still 0.05%; but we haven't been able to verify that and we haven't finished running enough tests since yesterday either.

All-in-all, we are not thrilled with the new AdWords QBS.

But, that's just my opinion ... and it prompted me to post again - after a very long hiatus.

toddb

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 6116 posted 8:30 pm on Aug 18, 2005 (gmt 0)

I am seeing 3 of 8 ads on some big volume terms are all off topic. Almost one is on every term that has reasonable volume. Not sure how google will deal with this.

toddb

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 6116 posted 8:31 pm on Aug 18, 2005 (gmt 0)

I am seeing 3 of 8 ads on some big volume terms are all off topic. Almost one is on every term that has reasonable volume. Not sure how google will deal with this.

ronburk

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 6116 posted 10:24 pm on Aug 18, 2005 (gmt 0)

This thread is specifically for strategies for the new min cpc system

Not a specific strategy, but if you're playing the game from both the AdWords and AdSense sides, it's worth remembering that if prices are rearranging on the AdWords side, then opportunities may be rearranging on the AdSense side.

gniewko

5+ Year Member



 
Msg#: 6116 posted 5:14 pm on Aug 19, 2005 (gmt 0)
ronburk - Not really. I use both AdSense and AdWords, and while my AdWords cost has almost doubled, my AdSense revenue is holding steady. There is no reason to think that Google will share any of the revenue increase with AdSense publishers unless they absolutely have to.

Google did increase publishers' share of click revenue [1] at the beginning of August, when Yahoo announced their new AdSense competitor and Google got scared. But so far I'm seeing absolutely no evidence of my AdSense ads benefitting from the price increases with this crazy AdWords update.

[1] Google denies this, of course, and claims that AdSense is making more money because of improving CTR thanks to their new expandable ad format. As any AdSense publisher will tell you, that's bulls**t. CTR is stayin the same, and revenue per click ratcheted up at the beginning of August.

rbarker

10+ Year Member



 
Msg#: 6116 posted 6:44 pm on Aug 19, 2005 (gmt 0)

Will my existing ads automatically get billed at the new minimums?

mhhfive

10+ Year Member



 
Msg#: 6116 posted 8:53 pm on Aug 23, 2005 (gmt 0)

keeping this thread alive, I saw AWR explain a bit about how the Quality Score (QS) works. It looks like QS is a function of the keywords in your AdGroup or something. So my minimum bid on a keyword might not be the same as your minimum bid on the *same* keyword -- because of the differences in all the other keywords that we don't have in common.

That said, strategies to take advantage of this would have to include advertisers sharing what groups of keywords are known to have lower minimum bids... But I don't think anyone will be willing to share that kind of info... If you scored a cheap keyword, would you tell everyone all your other keywords that likely caused it?

However, I guess we can still share strategies... such as if you have a group of 25+ synonyms, that usually increases (or decreases) min bid prices. Or if 25% of your keywords are similar, then your min bids will be discounted or something like that.

brianmerli

5+ Year Member



 
Msg#: 6116 posted 9:17 pm on Aug 23, 2005 (gmt 0)

I have recently taken of our AdWords from a person at my company. I have daily budgets setup at $1000. Around 4:30 - 7:30 all of the sudden my ads quit showing up but maybe once every 50 times I enter a keyword. The next day when I check how much I am spending it is always between $500-$515, just over half of my budget. Can anyone give me any tips on get more Clicks and traffic to the site?

AdWordsAdvisor

WebmasterWorld Senior Member adwordsadvisor us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 6116 posted 11:55 pm on Aug 23, 2005 (gmt 0)

keeping this thread alive, I saw AWR explain a bit about how the Quality Score (QS) works. It looks like QS is a function of the keywords in your AdGroup or something. So my minimum bid on a keyword might not be the same as your minimum bid on the *same* keyword -- because of the differences in all the other keywords that we don't have in common.

This is a really important point, and it's worth looking at again, as mhhfive is close but not 100% correct.

It is correct that a keyword, by itself, does not have a Quality Score - and a keyword's Quality Score is entirely dependent on how (and how well) it is used in a specific account.

This is mentioned on the page linked to (via the "Learn more" link) from the UI message at the top of the Campaign Summary page in each account.

Excerpting from that page, bolding added:

Each keyword now has a minimum bid that is based on the quality (also called Quality Score) of your keyword specific to your account...

Back to hmmfive's quote for a second, I wanted to clarify one thing - it is not the other keywords in the Ad Group that matter, but the targeting of the keyword in question to the ad(s) in the Ad Group.

Along these lines, it's also entirely possible that the same keyword used in two different places within the same account could have a different minimum bid in each of its usages - depending in large part on the targeting of keyword to ad in each case.

I'm sure that many of you have already seen the Help Center information on how the Quality score is calculated - but in case not, I've quoted it below, again with bolding added:

How is the Quality Score calculated?

We want to ensure that your keywords get a fair chance to run and that we do all we can to properly gauge their performance. We use a Quality Score to do this. Each keyword is given a Quality Score based on data specific to your account, including your keyword's clickthrough rate (CTR), relevance of ad text, historical keyword performance, and other relevancy factors.

Quality Score = keyword's CTR + relevance of your ad text + historical keyword performance + other relevancy factors

Your keyword's Quality Score and maximum CPC (at the keyword or Ad Group level) determine your ad's rank on Google search and content sites. (For the top positions above Google search results, however, we use your keyword's actual CPC.) Remember that improving the relevance of your ad text and keywords will increase your keyword's Quality Score and reduce the price you pay when someone clicks on your ad.

Quoted from: [adwords.google.com...]

AWA

SlimKim

10+ Year Member



 
Msg#: 6116 posted 3:21 am on Aug 24, 2005 (gmt 0)

i began a new ad with several keywords, and noticed some of the keywords had a 2 cent minium so i delete them and add them under a newer ad ... all in a 2 or 3 minute timeframe

when i add them under the newer ad, to take adventage of 2 cents, it then calls for 3 cents in order to be active

smells

This 37 message thread spans 2 pages: 37 ( [1] 2 > >
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