Suspicious observation about Adwords

Adwords fraud?

[simonmc]

Hi,

I was not using adwords for a while because I believed it to be very inaffective for my business. However, I took a sudden drop in orders due to Googles ever flux and so thought I would revisit adwords.

I spent $200 a day with them evenly spaced out (googles idea of evenly spaced would be at odds with most peoples idea of evenly spaced). This produced an instant increase in orders. I say instant but I mean over a 24 hour period.

Now .. of course I attribute this to my adwords spend. It produced around 700 clicks. I checked my report and it showed 4% click fraud (suspicious clicks not counted). That is double the average that google says it is getting across the board (2%). That made me ask the question... am I being targeted by my competitors? Thats another question.

Anyway... I kept this $200 spend going for well over a week and the results were pretty good across the board. Orders were up on average around 60%.

Yesterday...greed got a hold of me and I though... what if I double my adwords spend. So I did. I doubled it to $400 a day.

Here is where it gets VERY cloudy. First thing was...Google ate that extra $200 very fast even though it was set to distribute it evenly over the day. The speed at which google consumed this money was extremly worrying.

Why would I be worried I hear you say... Because it produced NOTHING. That extra $200 produced no extra orders at all. I am now into my secong day at $400 and Google has already gobbled half the money.

I will see how this goes and report on it tomorrow.

Here are my conclusions... Either.. Adwords is actually doing nothing for me and it was a coincidence that my natural google results recovered at the same time as my google spend started up again.

or.. only $200 worth of clicks produce business and the other $200 is non productive (yes...far fetched I know and must be fantasy)

Or .. Someone is cheating me out of the extra $200.

What other reasons could there be?

Simon

[Green_Grass]

Simple to check isn't it?

Just stop the spend and check out the results.

[simonmc]

So what if stopping it again coincides with a down trend in googles ever flux

Simon

[eljefe3]

Don't you check your referrer logs or have some sort of tracking system in place to determine where these sales are coming from? This is a must have!

[netmeg]

In the first place, your daily budget is 1/30th of your monthly budget. When you raise it from $200/day to $400/day, you raise your monthly budget from $6000 to $12000. Google will overdeliver your daily (up to 20 or 25%) on any given day to make up for the shortfall; at the end of the month, if they've billed you more than your monthly budget, they'll give you an overdelivery credit. I'm not sure how they retro-fit things if you change budgets mid month - I never really paid attention to that. If you double your budget during the month, do they assume the larger number for the whole month, or adjust for how many days at the old budget, or...? I suspect the former, but I don't know. Maybe you should ask.

And in the second place, you need to get some kind of analytics going on your sales, pronto. Be it Google's or someone else's, you need those stats before you can even come close to an informed conclusion.

I'm about at the point now where I won't take on any AdWords client who doesn't have Analytics installed (including having ecommerce switched on if they're selling online) Until you actually see what it tells you, you don't even realize how blind you've been flying.

[simonmc]

Well....orders plumeted yesterday so it is now confirmed for sure. Adwords is a complete waste of money and all this up and down is due purely to the unstable world (for a webmater) of Google search.

If you run google adwords campaigns...make sure you have good analytics. If you have no goal and are just driving traffic then I would question the value of the clicks you get. Try to measure their value someway. A click from google adwords may well not be the kind of click you have paid for.

[Rehan]

Did your ad positions and CPC change when you increased your budget? They can often have a very big impact on ROI.

I echo netmeg's suggestion about analytics. Conversion tracking in AdWords will help you identify what's working and what's not.

[mimmo]

I personally would not even start advertising on Adwords without some tracking tool. Clicks were not all made the same!
You may be getting useless clicks for that extra $200, or even your sales were not due to Adwords. Anyway, 1 day testing does not seem enough for me to reach a conclusion.

[lordhenry]

In August we spent $28,000 on adwords, on the 15th of September we reduced or stopped most adwords campaigns, in September I spent $14,000 on adords, we have not seen any decrease in our business. We should close out tomorrow at approximately $220,000 in sales for September. Today we stopped all adwords advertising and think we will show a small decrease in business in October however we will still be many $$'s ahead at the end of the month! We think adwords, or Yahoo or MSN is a waste of money.

LH

[LifeinAsia]

Is there some reason why you are not using AdWords conversion tracking? Or some other tracking from where your sales are coming from? Without using the available tools to investigate, WAGs are not going to help much.

[RhinoFish]

If you turn off all of your PPC and sales don't change, then you were definitely wasting your money, that's undeniable.

However, it does not follow that adwords, yahoo and msn are therefore necessarily no good.

What is true is that either they are no good -or- how you were using them was no good -or- some combination of the two.

Since adwords has been a wonderful money-maker for me (for my own sites) and for my many clients, in so many different circumstances, i'm forced to conclude that you weren't using them well.

I mean zero offense here and I don't doubt you've taken the right step by stopping the spend of money that was making no difference to your business, that's just smart. But I suggest you reconsider your dismissal, in light of others successes, and begin evaluating other ways to test ppc's abilities to produce substantial and meaningful returns.

Good luck to you!

[TheRealTerry]

I agree with RhinoFish. Unless you've put the time in to properly optimize your account, utilize the different match types, geo-target if relevant, and review your search query report to identify negative terms you need to have in place, then you can't really put the blame entirely on Google. It's not a magic money machine, you have got to know what you are doing, or get someone who does in order to make the most of your advertising investment.

I mean, you wouldn't draw up a hundred ads in pencil, fold them into paper airplane and throw them out the office window and expect it to generate the same return as getting a well thought out creative developed and placing it in targeted publications to reach your target market. Your paid search accounts need the same attention to detail and know how as any other form of marketing your business.

[venrooy]

In August we spent $28,000 on adwords, on the 15th of September we reduced or stopped most adwords campaigns, in September I spent $14,000 on adords, we have not seen any decrease in our business. We should close out tomorrow at approximately $220,000 in sales for September. Today we stopped all adwords advertising and think we will show a small decrease in business in October however we will still be many $$'s ahead at the end of the month! We think adwords, or Yahoo or MSN is a waste of money.

Did you not use any tracking? If you would have used some sort of tracking you could have figured this out with less than $50 spent. You're absolutely lucky to have made any money with they way you're wasting it. And to make a statement that adwords yahoo or msn is a waste of money - proves that you have absolutely no idea of what you're doing. Hopefully this is your own money you're wasting, and you're not actually employed to do this.

[hercules]

If you spend 400 $ a day. You should also invest in stats... If u want to hire a search firm with bidmanagement software you can do that too.

Cheers,

[edited by: skibum at 12:32 am (utc) on Oct. 3, 2007]

[lordhenry]

We spent $28,000 in August on G Adwords, so far in October I have spent $1400 on Google, the result is a 20% increase in business and guess what a savings of $25,000 to the bottom line.

I was paying $5.00 on a search term to be number one and I reduced that to .10 cents and I now at position 4 paid. Something is not right a Google...

LH

[Rehan]

lordhenry, that's because of the way the AdWords auction model works -- your cost is determined in part by the bids of the advertisers below you. While your situation is relatively uncommon, it's not because is doing something "wrong".

[edited by: Rehan at 3:07 pm (utc) on Oct. 17, 2007]