Google Adwords

Mary C. | 15 May 2004 |

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Promotion Case Study - Google AdWords

There have been many shifts and changes in the search engine world over the last 6 months. As discussed in our previous newsletters the effects have been far reaching, involving the largest search engines (Google and Yahoo) and many of the smaller ones (Inktomi, Fast, Alltheweb). One of the results we have seen out of all of this is that the importance of Google AdWords has grown. For a long time Overture was the big pay-per-click and the rest were considered somewhat less important by varying degrees. Now, we feel that Google AdWords has become an equal to Overture and in some markets, even superior to it.

Because Google AdWords has become increasingly important, we have started spending more time and energy with it for our clients. We have been using some new strategies that we are finding allow us to increase our clients’ traffic, while significantly decreasing the amount that they spend per click. One of the main strategies we have been experimenting with is running two ads for the same keyword phrases at the same time. Google will rotate these ads so you don’t have both ads show up on the same search, but by rotating them, it gives us a chance to evaluate how each ad is performing. Once we have a clear indication of which is performing better, we delete the ad that is not performing as well, then create a new second ad. As we continue to do this, the click through rate of the ads that we keep get better and better. A good click-through rate is vital because Google AdWords use click-through rate and bid amount to determine an ads placement. The higher click-through rate an ad has, the less money you need to bid on search terms to still receive good placement. This is how we can actually get more traffic to our clients’ sites, while spending less money.

One of the other important aspects of this new Google strategy is having very focused ad groups with a small number of search terms that are very focused. If a client has a hotel property on Cape Cod, we would want one ad group specific to Cape Cod terms, one specific to city or town terms and if they do weddings, a specific ad group for those. In this way ads can be tailor made for the terms that are in that group and titles and descriptions can more accurately reflect what you are selling.

We are also experimenting with some elements of how the ads are written, using different capitalization, content and features. The results in the first month have been extremely positive. Below are the statistics for 3 test cases to give you an idea of the effect that the new strategies are having.

Case #1 – Total clicks increased by 17%, click-through rate (CTR) stayed the same, but cost per click was cut 48%, and total cost was cut 39%.

Case #2 – Clicks increased by 40%, click-through rate increased by over 100% (from 1.3% to 2.8%) cost per click cut 37%, and total cost decreased 12%.

Case #3: Clicks increased 21%, click-through rate increased by 266% (from 0.6% to 2.2%), cost per click was cut 18%, and total cost decreased 1.8%.

As you can see, in every instance, traffic went up and total spending decreased. We are very excited with the results and will be expanding the scope of our efforts over the upcoming months. There is little doubt that paid listings are only becoming more and more important, and any work that can be done to improve performance while keeping costs down will be of the greatest value and importance.