Search Exchange 2014 - Larry Kim's AdWords Presentation

CONFIDENTIAL – DO NOT DISTRIBUTE 1
The Weirdest Intro to PPC Ever!
10+ Years of PPC Experience in
Just 50 Minutes
Larry Kim,
Founder/CTO, WordStream
July 28, 2014

Win a $25 Amazon Gift Card!!
• Include the hashtag #searchex and
(@larrykim) in your tweets
• Prizes Awarded For Either:
–Best Tip
–Funniest Tweet
Larry Kim (@larrykim) #searchex

About Me
Larry Kim (@larrykim)
• Founder & CTO of WordStream
• Commander of the Google AdWords
Quality Score Rebellion
• Had a Kid 10 Weeks Ago (#ppckid)

Today’s Agenda: Weirdest Intro to PPC Ever
1. How AdWords Really Works
2. Winning at AdWords the Weird Way
– Tips for Writing Killer Ads / Picking
Keywords
– Tips for Writing Amazing Offers
– User Context & Mobile Search
– Converting Customers with Remarketing
– Exciting New Features

Pick the Red
or Blue Pill

Understanding the AdWords Auction

How Quality Score Impacts Ad Position
• AdWords is Like Real Estate: It’s all about
Location!

How is Quality
Score Calculated?

Google Expects WAY More of Your Ads!
Larry Kim (@larrykim) # searchex

QS is Based on Your CTR vs. Expected CTR!
Larry Kim (@larryim) #searchex

What’s an Average
Quality Score in
2014?

Avg. Quality Score Has Been Falling.
• Today, average score is 5/10. Previously was 7/10!

How Does Quality
Score Impact Cost
Per Click?

How Quality Score Impacts Actual CPC

How Does Quality
Score Impact
Impressions?

Impression Share vs. Quality Score
• AdWords is Like Real Estate: It’s all about
Location!
Larry Kim (@larrykim) #wordstream #searchex

How Does Ad
Position Impact
Conversion Rates?

Do Certain Ad Positions Convert Better??

Conv. Rate vs. Average Search Position

How Does Quality
Score Impact Cost
Per Action?

Cost Per Conversion Greatly Impacted by QS

The Impact of Quality Score on Cost Per Conversion

But High QS Not Possible In My Industry!

B2B Industry Quality Scores

Finance Industry Quality Scores

Ecommerce Industry Quality Scores
Larry Kim (@larrykim) #wordstream

But Google Says Don’t Obsess Over QS!

New Quality Score White Paper

“Settling The Quality Score”?
Link To PDF File: http://bit.ly/qs-whitepaper

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: New Google White Paper on Quality
Score.

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)

Remember: Quality Score Graded on a Curve
Larry Kim (@larryim) #wordstream

“Low CTR” =
Losing PPC
Strategy

Quick Recap
1. Below Avg. CTR =
Low QS
2. 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

The High CTR Game for AdWords
1. Be Very Picky. Bid on Only the Best
Keywords and Get HIGH CTRs.
2. Delete Junk Keywords (Bottom Third of
your Account)

How To Write
Insanely
Great PPC Ads

What’s a Good CTR?

• Even the “Winner” is a Loser!

Your Best Ad Might Be Crap

How Great
Can My CTR Be??
(You’d be surprised)

Click Through Rate Varies A Lot!!

Some Ads Do 2x, 3x or 6x Above Avg!?

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
Ad Unicorns?!
(6x Avg. CTR!)

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

1. Keywords With High Commercial Intent

Does Dynamic
Keyword Insertion
Matter?

What is Dynamic Keyword Insertion?

2. Dynamic Keyword Insertion (DKI)

2. DKI Doesn’t Produce As Many Unicorns

What Are “Ad Extensions”?
58

3. Ad Extensions Impact on Click Through Rate

3. Ad Extensions Impact on Quality Scores

How To Write
“Unicorn” Ads

4. Most Ads Suck. Create Emotional Ads.
62

Creating “Emotional” Ads

An Example:

Versus…

You Need To Test 100
Ads To Find 1
Unicorn.

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!!

You’re Not Testing as Many Ads as You Think…

It’s Not as Hard As
You Think

Most Small Businesses Aren’t That Active

85% of Impressions are From 5% of Ads

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

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…

Conventional Landing Page Optimization is Over-Rated
• Small Changes Result in Small Changes
• The x% Increase you think you got
probably isn’t significant!

Re-Arranging Deck Chairs On the Titanic

What’s a Good
Conversion Rate?

What’s a Good Conversion Rate?

Unremarkable vs. Unicorns
Distribution Point Conversion Rate Vs Average Comments
Average 2.35% Unremarkable
Top 25% 5.31% 2x Awesome
Top 10% 11.45% 3-5x Unicorns
Larry Kim (@larrykim) #aearchex

“top 10% of accounts have a CVR 3x average” rule
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%

Aim For 2-5x Increases Not 2-5%!

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

What Do Landing Page
Unicorns
Look Like?

1. Change The Offer

The New Offer:

How to Know if your Offer Stinks
• Average or Below Average Conversion Rates
• Ask Your Customer!

2. Change The Flow.

2. New Flow: Registration At End

Another Example of Changing The Flow

Changing the Flow: Let Them Choose

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

Relative Abundance
Name Percentile Relative
Abundance
Vs. Expected
Conversion
Rate
Awesome
Landing
Pages
Top 25% 1:4 2x Higher
Unicorns Top 10% 1:10 5x Higher!!

This is the same landing page with different
spacing…

Again,
It’s Not as Hard AsYou
Think

80% of Traffic Goes to 10% of Landing Pages

The Bar for Landing Page Excellence is (Very) Low

You Don’t Need Dozens of Landing Pages…

But You Don’t Need Dozens of Landing Pages…

Source: BIA/Kelsey

OMG a Call
Button!!

Call Extensions Radically Change The 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 Website
Landing Page
3. Lead
Captured!!

No, You Don’t Need A Mobile Website!

Avg. CTR Drops Off VERY Fast on Mobile

Mobile Impression Share VERY Competitive

Converting
Traffic with
Remarketing

Typical Conversion Rates Are in Single Digits
of people who visit a website
leave without completing
the actions marketers want
them to take
~97%
Your Ad
Your Site
X
-
of people abandon their
shopping cart without
completing a purchase
70%

How Remarketing Works

Typical Reach of Remarketing…
1. Reach 2. Frequency 3. DiversityOn various pagesReach more users Reach them frequently
Of the typical remarketing
audience, find
Reach them on between As they visit 20 or more pages
on a typical day across
84%
…within a month
10-18 days
… or more out of the month
5-10 sites
… of which all pages and
sites have ad space available
to Google Display Network buyers

Audience Definition Strategy
• Funnel and Product Based List Segmentation

WordStream’s Remarketing Ads
• Ads that both reinforce your brand while
driving to a conversion!

Impact on Repeat User Rate
• New Visitor Rate Fell From 79.8% to 66.63%
• (Meaning, Visitors are Now Returning)

Impact on User Engagement
• Time on Site Increased from 1:33 to 4:35
(TRIPLED!!)

Remarketing = Your Secret Weapon

Subject Line & Teaser:
#SEMhacks
Desktop Search Conversion Funnel Mobile Conversion Funnel
X
-

Email Ad:
#SEMhacks
X
-

Example Ads
#SEMhacks
X
-

Hundreds of New Features / Year
#SEMhacks

1. Delete Bottom Third of your Search Marketing
Campaigns
2. Redeploy Budget to Remarketing and Other
New Features
Crazy PPC Strategy!!

Summary: Weirdest Intro to PPC Ever
1. Just Say No to Low CTR!
2. Write Insane Ads that Get 3x Avg. CTR
3. Crazy Offers that Get 3x Conversion Rates
4. Use Mobile Search to Triple ROI
5. Convert Customers with Remarketing

Thank You Search Exchange!
Slides: bit.ly/searchex2014

Search Exchange 2014 - Larry Kim's AdWords Presentation

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