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How's your longterm AdWords performance?

Our AW graphs showing 2002 to 2006 aren't pretty.

     
5:03 pm on Jun 3, 2006 (gmt 0)

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Having just passed our 4-year mark with AdWords, I thought I'd use the AdWords reports to chart monthly account performance since day-one. What I saw only confirmed my fear that, at least for us, AdWords has become significantly less effective and more costly over time.

The stats:

Impressions
While our campaigns started in Q2 '02, impressions really took off in Q2 '03, tripling the previous run-rate. From there, however (with the exception of a surge in Q1 '05) it has been a steady downward fall to present day where we're getting only 1/4 the impressions we got in Q2 '03.

Conversion rate
We started tracking this using the built-in AW tool in Q3 '04. From there it was downhill until Q1 '06 when it spiked to just above it's pervious high. However, lead quality for the last 6-month has been abysmal.

Average position
Running between 2-4 through the entire 4-year period. Our main KW's now cost north of two bucks to attain the aforementioned position, and recent checks show they've slipped to page 2 of many SERPs.

CTR
Steady climb from 1% in mid '03 to 3% in early '06; then a rapid slide to the current 2%.

Clicks
This looks like the normal distribution curve, from 250/day in mid '02 to 1250/day in mid '04 to 250/day in mid '06.

Cost
This one is a one-way trend: up! From 50/mo in the beginning to 600/mo now.

How does this compare to your AdWord campaign's performance over time?

7:19 pm on June 4, 2006 (gmt 0)

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AdWords has become significantly less effective and more costly over time

Agree 100% Nathanso!

The first 2 years were like printing money. Since mid March of 2006, it's been a struggle. My CTR is better than it's ever been, but it doesn't seem to help. I can't help but suspect the validity of many of the clicks.

The only upside is that with nothing to lose, I've become much more experimental in my approaches.

Israel

6:29 am on June 5, 2006 (gmt 0)

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Havent run very long campaigns but cpcs have been going up.

CTR
Steady climb from 1% in mid '03 to 3% in early '06; then a rapid slide to the current 2%.

Clicks
This looks like the normal distribution curve, from 250/day in mid '02 to 1250/day in mid '04 to 250/day in mid '06.

Was wondering what kind of changes you have made on the campaign nathanso. Have you reduced bids a lot in '06 or put that fixed targets?

2:32 pm on June 5, 2006 (gmt 0)

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Sounds like you need someone else to run your AdWords campaign.
2:45 pm on June 5, 2006 (gmt 0)

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We had an adwords compaign from '02-'04. We used to have lots of click throughs as well as conversions.

But when we started running our reports we noticed that we are actually loosing money on our conversions due to the many impressions and click throughs.

However, due the niche of our business we have repeat customers from our adwords compaign which in the long run we have profited from Google Adwords.

I am trying to convince my boss to go back to Google Adwords, I was wondering how it would be the best way to fully persaude my boss to start using Adwords again..

3:08 pm on June 5, 2006 (gmt 0)

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I haven't done the charts, but I see similar patterns with my clients, most of whom I put in AdWords from day one. When we first started, in almost all cases, we were the first ones in their particular industries to jump on board - now there's a TON more competition, which of course has driven the costs way up. Added to that the whole AdSense/MFA thing, and what I'm sure is a heavy instance of click fraud (but I can't prove it) and at some point I believe there's a saturation point as far as users clicking on ads - yea, no doubt they are less efficient than they were. But we still need to be there, because all my client's competitors are there now. So now I have to explore alternative strategies, like just low can my ads rank and still pull in, while keeping costs in line? It's also become a LOT more time consuming to manage accounts now. I have six major AdWords clients, and a handful of people who are only dabbling, and I'd have to think long and hard before I took on a new one.

(Of course, if I had a decent AdWords management tool, that would be different - hint hint hint hint)

3:17 pm on June 5, 2006 (gmt 0)

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Netmeg,

Have you had to convince your clients to continue with adwords, due to the high costs?

Is so, give me some tips on how you where able to keep them in line?

3:40 pm on June 5, 2006 (gmt 0)

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No, most of my clients are along the lines of "spend whatever it takes." Yea, they complain about costs every now and then, so I turn things down and then the phones don't ring and the orders don't come in and they call me up to turn everything back up again. I provide them with monthly reports on what they're spending, conversion numbers (my own, plus Google's) and overall, they're all still making money. Also, as time goes by, I've gotten better at this (I think).

The main thing I'm doing now (as I have mentioned previously, I think) is experimenting with trying to place the ads within the #5 to #8 position at a reduced cost - and in some cases, it has worked really well. I reduced one campaign (which generally gets around 800 to 1000 clicks per day) from an average CPC of almost $.75 to about $.22; the clicks now tend to be closer to 800 than 1000, but the conversions/sales are about the same. Now I'm going to raise the daily budget on it and see what happens then.

The biggest problem I have, actually, is that one client (the one who spends the most) absolutely INSISTS that they be on top, and doesn't want to let me try this experiment with their account. I believe they're paying way more than they ought to be (in some cases over ten bucks a click) but any time they see their ad ranked less than #3 they panic and call me up and complain, so I never get a chance to try it out.

4:27 pm on June 5, 2006 (gmt 0)

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Sorry.. there was an error in my original post. Click counts were per month, not per day. So it's..

Clicks
This looks like the normal distribution curve, from 250/month in mid '02, to 1250/month in mid '04, to 250/month in mid '06.

Yes, we've tuned, pruned, segmented, and re-written ads over and over again. We've implemented many of the tips found right here on WW and elsewhere, including Google's own. Competition is certainly more intense now than in years past, but the fact that AdWords veterans are looking for alternatives speaks volumes in my book.

7:10 pm on June 6, 2006 (gmt 0)

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We have found that AdWords is getting more and more expensive, but that it's mostly because our traffic is going up due to higher CTR. Conversions have stayed relatively stable.

One thing we have learned is that you absolutely don't need to be in #1 position to see revenue. Anything in the top 5 seems to work fairly decently.

12:42 pm on June 10, 2006 (gmt 0)

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We haven't done any charting but we started our adwords campaign in jan 2003. We were the first in our sector to do so. A month later our main competitor started with adwords too.

Over the years, 2003-late 2005, our adwords campaign slowly rose from around $250 - $800 per month, with various competitors coming and going and eventually, going for good. Being in Australia, we haven't really been targeted by the MFA ads.

Anyway, in late 2005, a few competitors started advertising, decreasing our overall value.

We decided to make changes like:

1) get rid of non-converting keywords (and by that I mean keywords that have negative ROI) as well as ads on the content network.
2) Make a better ad copy (as unique and original as possible) to increase CTR and thus make it into the top 3 with a low CPC.
3) make a better site with more content, more accessable, and like a good ad copy, demonstrates why we are unique and better than our competitors.
4) research and make a better landing page.
5) constantly experiment with new things - eg, our website is in "perpetual beta".

The results have been phenomenal. CTR has increased by 150%, and conversion by between 400% and 500%, just by making simple changes.

 

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