Larry Kim's Presentation at ClickZ Live San Francisco August 2014

August 11–14, 2014
#CZLSF | @ClickZLive
The Global Conference Series Designed by Digital Marketers, for Digital Marketers
PPC Peak Performance:
The Definitive AdWords Audit
Framework
Larry Kim
WordStream, Inc.
Founder & CTO

@larrykim
August 11–14, 2014 | #CZLSF | @ClickZLive
Win This $25 Amazon Gift Card!
• Include the hashtag #CZLSF and
me (@larrykim) in your tweets
• Prizes Awarded For Either …
–Best Tip!
–Funniest Tweet!

@larrykim
• Even the “Winner” is a Loser!

@larrykim
Today’s Agenda: PPC Audits
• What’s a Good…
– Quality Score?
– Click Through Rate?
– Conversion Rate?
– Cost Per Conversion?
• … and how to vastly improve on all of
these metrics!

@larrykim
About Me
• Founder of WordStream
• Commander of the Quality
Score Rebellion
• Had Kid 3 Months Ago
#ppckid

@larrykim

@larrykim
What’s a Good
Quality Score
(and Why Should
You Care?)

@larrykim
Avg. Quality Scores Are Falling
• Previously 7/10 was Average. Now 5/10.

@larrykim
Quality Score Impacts Ad Position

@larrykim
Quality Score Impacts Impression Share

@larrykim
Quality Score Matters
2x More on Mobile

@larrykim
Cost Per Conversion Greatly Impacted by QS

@larrykim
So.. Get a High Quality Score (Duh)

How is
Quality Score
Calculated?!

@larrykim
What’s a Good CTR?

@larrykim
QS is Your CTR vs. Expected CTR

@larrykim
But High QS Not Possible In My Industry!

@larrykim
Real Estate Quality Scores

@larrykim
Ecommerce Industry Quality Scores

@larrykim
Finance Industry Quality Scores

@larrykim
Crazy Hack To Raise Quality Scores
• Add 10% Branded
Terms to Raise
Account Average
Quality Scores
• Delete the Bottom
Third of Your PPC
Account

@larrykim
Example Crap Account

@larrykim
Example Awesome Account

@larrykim
Key Finding #1: They’re Downplaying QS
Quality Score Is a Helpful Diagnostic Tool,
Not a Key Performance Indicator
• Why: Your Quality Score is like a
warning light in a car’s engine that shows
how healthy your ads and keywords are.
It’s not meant to be detailed metric that
should be the focus of account
management
-- Source: bit.ly/qs-whitepaper

@larrykim
But Wait – What About This?!
“QS is important in order for your ads to be
successful … QS plays a key role in determining
your ad's position and how much you'll pay for
a click. In general, the more relevant your ad, the
higher your QS – and the higher your QS, the better
your position and the less you will have to pay for a
click...Being successful with AdWords means
getting your products or services in front of the
people who are most likely to become your
customers and a high Quality Score can help
make that happen.”
-- Source: What is AdWords Quality Score and Why
Does It Matter?" from Google (2011)

@larrykim
Remember: QS Graded on a Curve

@larrykim
Key Finding #2 : They Were Withholding Info

“Low CTR” =
Losing PPC
Strategy

@larrykim
Quick Recap
• Below Avg. CTR = Low QS
• Low CTR ads:
• Have Lower Ad Positions
(Fewer Clicks)
• Often don’t even get displayed
• Get penalized w/ up to 400%
higher CPCs
• Have up to 64% higher cost per
conversion

@larrykim
The High CTR Game for AdWords
• Be Very Picky. Bid on Only
the Best Keywords and Get
HIGH CTRs.
• Delete Junk Keywords
(Bottom Third of your
Account)
• Tip: Roll Up Quality Scores
to the AdGroup, Campaign
or Account Level by using
Impression weighted
averages

What’s a Good
Click Through Rate
(And How to Raise
Your CTR by 6x)

@larrykim
Which Ad Wins?
Ad A
- 32,423 Impressions
- 453 clicks (1.4% CTR)
- Average Position: 2.8
Ad B
- 36,223 Impressions
- 760 clicks (2.1% CTR)
- Average Position: 3.0

@larrykim
Trick Question! They Both Suck
• Neither ad is worth declaring a “Winner”.
• Not even the 2.1% CTR in the 3.0 Avg. Position.
• Why??

What’s a Good
CTR These Days?
(You’d be
surprised)

@larrykim
Google Expects More Than Ever

@larrykim
Lots of Variance!

@larrykim
Under-Performing vs. Unicorns
Percentile Vs. Expected
CTR
Name
Bottom 50% Below Expected
CTR
Under-
Performing
Advertisers
Top 15% 2X Higher Awesome
Advertisers
Top 5% 3x Higher Super Awesome
Advertisers
Top 1% 6x Higher!! Unicorns!!!

@larrykim
@larrykim
Unicorns?!
(6x Avg. CTR!)

@larrykim
Ad Text Testing
• Same Story – 20% of Ads Generate 92% of Spend
• 20% of Ads Generated 65% of Impressions
• But CPA, CTR, and Conversion Rates vary
@larrykim, @perrymarshall

@larrykim
1. Keywords With High Commercial Intent

@larrykim
2. Dynamic Keyword Insertion (DKI)

@larrykim
2. DKI Doesn’t Produce As Many Unicorns

@larrykim
3. Ad Extensions Impact on Quality Scores

@larrykim
3. Ad Extensions Impact on Click Through Rate

How To Write
“Unicorn” Ads

@larrykim
Most Ads Suck.

@larrykim
Ads That Trigger Emotional Response

@larrykim
Versus…

You Need To Test
100 Ads To Find 1
Unicorn.

@larrykim
Relative Abundance
Name Percentile Relative
Abundance
Vs. Expected
CTR
Awesome
Ads
Top 15% 1:6.7 2X Higher
Super
Awesome
Ads
Top 5% 1:20 3x Higher
Unicorns Top 1% 1:100 6x Higher!!

@larrykim
You’re Testing Fewer Ads Than You Think

It’s Not as Hard
As You Think

@larrykim
The Bar is Very Low

@larrykim
5% of Ads Take 85% of Impressions

@larrykim
What’s a Good
Conversion Rate?
(And How to
Improve Yours!)

@larrykim
Average Conversion Rates

@larrykim
Top 10% of Landing Pages Have
3-5x Higher Conversion Rates
Distribution
Point
All
accounts
Ecommerce Legal B2B Finance
Median
Conversion
Rate
2.35% 1.84% 2.07% 2.23% 5.01%
Top 25%
Conversion
Rate
5.31% 3.71% 4.12% 4.31% 11.19%
Top 10%
Conversion
Rate
11.45% 6.25% 6.46% 11.70% 24.48%

@larrykim
Landing Page Unicorns?!
(+3x Avg. Conversion Rate!)

@larrykim
The Great Landing Page
Optimization Myth
• We Changed the:
– Font Type
– Spacing
– Button Color
– Image
– Etc.
• We got a 5%
Increase in
Conversions!!*

@larrykim
Typical Conversion Rate
Optimization Test
• PTD- Premature Testing Dilemma (aka “Optimizatitis”)
• The Early Lead Disappears!
• We want to believe our hard work paid off but we are often deluding
ourselves…

@larrykim
Conventional Landing Page
Optimization is Over-Rated
• Small Changes Result In Small Changes
• % Change You Think You Got is Probably
Just Noise

@larrykim
Re-Arranging Deck Chairs on the Titanic

@larrykim
Aim for 3-5x Increases Not 3-5%

What Do Landing
Page Unicorns
Look Like?

@larrykim
1. Change Your Offer

@larrykim
The New Offer

@larrykim
How To Know If Your Offer Stinks
• 2% Conversion Rate or Less
• Ask Your Prospects

@larrykim
2. Radically Change The Flow

@larrykim
New Registration Flow

@larrykim
Mobile Changes The Flow
OMG a
Call
Button!!

@larrykim
Call Extensions Radically Change Flow
Calls to Businesses worth on Average 3x
More Than Clicks to Websites!!
4. Captured Lead
2. Calls
Business
2. Clicks On Ad
Desktop Search
Conversion Funnel
3% Avg.
Conversion
Rate
Mobile
Conversion Funnel
1. Sees Ad 1. Sees Ad
3. Visits Landing Page
3. Lead
Captured!!

@larrykim
Try Eliminating Your Landing Pages

@larrykim
Let Users Choose a Path

You Need To Try Out
10 Landing Pages To
Find 1 Unicorn

@larrykim
This is the Same Landing Page

It’s Not as
Hard As You
Might Think

@larrykim
10% of Landing Pages Take
80% of Impressions

@larrykim
Typical Small Biz Has Just 3 Landing Pages

@larrykim
No Automatic Benefit of Having Tons of
Tons of Landing Pages
What’s a
Good Cost
Per Action?

@larrykim
Avg. CPA’s By Industry

@larrykim
Don’t Settle For Average!
• Unicorn Ads Get 6x
higher CTR at 50%
the Cost
• Unicorn Landing
Pages Have 3-5x
Higher Conversion
Rates

@larrykim
Summary:
• Just Say Now to Low CTR (and Low QS)
• Forget Average, Find Your Unicorns!
• Small Changes Result in Small Changes.
Think Big!

@larrykim
Thank You #CLZSF
• Stop by the WordStream Booth Today!
• Slides: bit.ly/czlsf

Larry Kim's Presentation at ClickZ Live San Francisco August 2014

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