I am reading a free report right now about AdWords, and have learned a few things from it. Here are a couple things that I have noticed though:
"Guys at Google have figured out a smart way to sell their inventory. They only care about cost per impression, be it CPM or any other measurement. In other words they don't care about your clicks..."
I thought the people at Google only care about CLICKS and serving relevant ads... Thoughts?
"Let's take two ads, one with a 5% CTR (ad A) and another one with a 1% CTR (ad B).If the ad A gets 5 clicks per 100 impressions and the ad B only gets 1 click, Google would charge the owner of the ad B five times more for the same ad position.
Let's look at the numbers.
If the owner of ad A sets a maximum CPC of 20 cents, then Google would make $1 for each 100 impressions (more or less). 100 impressions * 5% CTR = 5 clicks * 20 cents = $1
At the same time Google would have to charge the owner of ad B $1 per click just to make the same amount of money.
So if you are the owner of ad A, you only need to bid 21 cents to get ahead of ad B.
Does it start to make sense? Sounds good in theory?"
Sounds good in theory, but through this forum I have been lead to believe that none of the above matters... ONLY KeyWord CTR matters when determining the price per click and the ad position. It is done by a KeyWord to KeyWord basis. The ad CTR has nothing to do with the positioning of any of the KeyWords within it's AdGroup. The Campaign CTR also does not matter...
So I am correct in thinking that the only thing that determines a KeyWords ranking and position is the past CTR of the KeyWord itself, and nothing else?
Thanks,
P.S. I am still wondering this because I still see so many people saying that you should be continually tweaking your Ads as to get a better CTR so you pay less and get a higher ranking for the KeyWords contained in that ads AdGroup.
But if my above thinking is correct, then the Ads CTR has no effect, and what you should really be doing is tweaking the ad for ROI! Don't even worry about the CTR.
All the Best.
C.K.
The higher your CTR on a specific term the LOWER your price for equivalent placement.
If you were google, and someone got 1 click per day but bid $20.00 for that click and someone else got 10,000 clicks per day @ $.05 per click, which would you rather promote to a higher position?
Just remember CTR is Google's benchmark for success. (probably not yours) All clicks are not equal in value for the the advertister.
[edited by: nyet at 4:53 pm (utc) on June 20, 2004]
Thanks for the info. Here is another one:
The author is talking about checking which of your competition is serious about AdWords.
He says to first type in free widgets to see which competition you shouldn't really worry about.
Next he says type in kjlfdslk widgets to see who shows up.
Sounds like a good thing to do, but I am wondering this:
If I bid on the broad KeyWord widget, nothing it stopping me from coming up for the term kljadfs widget, right? So that must mean the competition that doesn't come up for that term are not using broad match for that particular term.
Thanks,
C.K.
Are you saying Nyet that the bid price on a particular keyword alone does not guarantee you the top spot on the sponsored list? ...or were you referring to the organic search results?He was referring to the Paid Listings... No, a high bid doesn't guarantee you a top spot. In essence a spot is calculated by KeyWord CTR * Bid Price... If I am wrong, someone can correct me.
Bubzeebub, you may find it really help to check out the help files at the AdWords homepage. Print them out, and study them... You will be happy you did :-]
All the Best,
C.K.
If I bid on the broad KeyWord widget, nothing it stopping me from coming up for the term kljadfs widget, right? So that must mean the competition that doesn't come up for that term are not using broad match for that particular term.
Before the introduction of Expanded Broad Matching (EBM) that was true, but not any longer. The EBM algo is much more complictaed now.
If a search of gobbledygook+Keyword shows an add they ARE using EBM (correctiioin: or Phrase Match) , if it does not they *MAY* not be using EBM, but still could be.
The nuts and bolts of EBM are not published. The worst part is that you may be running a word with EBM and G may turn off EBM for that word with no indication in the reports at all.
[edited by: nyet at 5:03 pm (utc) on June 20, 2004]
So it actually is almost impossible to not come up for gobbleygook widget if you use broad matching? I get my list of KeyWords, and use all 3 matching forms for each one. Then later on I can see which ones are worth keeping.
All the Best,
C.K.
In my above post, I mispoke. If a competitor's ad is showing with Gobbledygook+keyword there are only 3 possibilities:
1). They have phrase-matched the keyword.
2). They have Broad-matched the keyword.
3). The have the goobledygook (by chance) in their PM or BM. (not likely)
If you check the Phrase Match and they do not show. THEN you know they are Broadmatching.
Thanks for clarifying this.
C.K.
[webmasterworld.com...]
There is a much easier way to not come up for: gobbleygook widget while bidding on the KW widget - use negative keywords.
A good negative keyword list can make broadmatch an effective tool for certain industries.
I do use negatives, but thinking of a negative like gobbleygook is impossible. Not like many people are going to search for it anyways, but there are an infinite amount of gobbleygook variations.
C.K.
Guys at Google have figured out a smart way to sell their inventory. They only care about cost per impression, be it CPM or any other measurement. In other words they don't care about your clicks...
Second statement from Neyet
The higher your CTR on a specific term the LOWER your price for equivalent placement.
Third statement from Neyet
Just remember CTR is Google's benchmark for success. (probably not yours) All clicks are not equal in value for the the advertister.
Do these statements are in contradiction? The first and second are the same depending how you look at it. The third statement as IMO is not true.
The ad replacement is based on CTR*CPC
CTR*CPC=[(No. of Clicks)/(100 impressions)]*(Cost/Clicks)
=(Total Cost)/(100 impressions) or CPM
Thus: Google uses CPM to place the ad
From Google's viewpoint: Do it care about your CTR? I would say no.
Since advertisers can't use CPM to control their ad replacement, but they can adjust CPC and tune the ad to increase CTR, therefore the ad placement can be controlled. This is why CTR is very important for advertisers.
My statement will be:
CTR is Advertiser's benchmark for success while CPM is what Google cares about.
CTR is not important to us (except to keep words active).
SALES are what we want.
If I had a CTR of 99% but no sales, I'd drop the word like a hot potato.
We don't measure success by CTR we prefer the bank account as a measure.
So I should re-phrase it:
CTR is Advertiser's business while CPM is what Google cares about.
or
CPM is Google's benchmark for success.
P.S. I am still wondering this because I still see so many people saying that you should be continually tweaking your Ads as to get a better CTR so you pay less and get a higher ranking for the KeyWords contained in that ads AdGroup.
If you improve the CTR of your advert, then you will also improve the CTR of the keywords that the advert is associated with (on average anyway). Hence yes, it is worth improving the CTR of adverts (although you need to consider ROI of your higher CTR ads as well).
