Advanced Google AdWords

Brad Geddes

• Publisher: Sybex
• Year: 2014
• ISBN:
  9781118929551
• Edition: 3
• Topic: Business
• Subtopic: Digital Marketing
• Index: Business

The ultimate guide to Google AdWords is fully updated for its third edition

This is the ultimate guide for those who want to quickly get beyond AdWords basics to learn and apply the advanced techniques and tactics that are used by Fortune 500 companies. The book provides insight into AdWords' functionality and advanced features, explaining how they work and providing tips, tactics, and hands-on tutorials, which readers can immediately use on their own PPC campaigns.

The third edition features more than 50 pages of new material and has been completely revised to cover all the changes to Google's system, including changes to the campaign structure, bid modifiers, new quality score analysis techniques, and the latest ad extension updates. Expert author Brad Geddes gives advanced insight, direction, and strategies for every aspect of using AdWords to create and manage a successful pay-per-click marketing campaign, and also shows you the best tools and techniques for keyword research, including negative keywords. In addition you'll:

• Discover how to craft winning ad copy, and explore advanced PPC campaign optimization techniques, including how to optimize for a good quality score
• Explore the intricacies of the Display Network and learn how to interpret reports
• Learn how to use the AdWords Editor to create thousands of keywords and ad copy configurations
• Understand advanced bidding strategies, and how to best organize and manage an AdWords account
• Learn how to best test everything from landing pages to ad copy

The book concludes with detailed chapters on understanding, interpreting, and acting upon the detailed AdWords reports so you can confidently make decisions to positively impact your campaigns. Advanced Google AdWords is detailed, in-depth, and full of insights, techniques, tips, tactics, and fascinating real-world case studies, making it the ultimate step-by-step guide for developing advanced AdWords expertise.

Chapter 1
Understanding Search Theory

The search process may seem simple: A searcher visits a search engine, enters a search query, and receives results. Every step of the search process, however, is accompanied by the searcher’s thoughts and expectations. Understanding how your keywords and ads align themselves with the search process can help bring more visitors to your site and achieve more conversions from those visitors.

Pay-per-click (PPC) advertising is effective because it mirrors the search process, and the two work seamlessly with each other. Understanding the origins and evolution of PPC advertising will also give you a glimpse into its future, so you can continue to take advantage of this ever-expanding form of advertising.

Chapter Contents

• The origins of Google AdWords
• The psychology of search
• Goal alignment: Google vs. you vs. the searcher
• Best practices for applying search theory

The Origins of Google AdWords

In 1996, a small company was formed that would forever change the world of Internet marketing. This company was called Idealab. It took two years of hard work and creative ideas before Bill Gross’s company would launch GoTo.com with a simple business model: Advertisers could choose to display their ads based on what a searcher was trying to find. A searcher would type a query into the search box (Figure 1-1), and if advertisers chose to advertise on that word, their ad would show in the search results. Four simple concepts made this business model revolutionary.

Figure 1-1: GoTo.com’s search page, circa 1998

The first was relevance, a word later adopted by Google throughout their AdWords program. Showing ads based on what someone was actively seeking made these new search ads more relevant than anything previously displayed on the Internet.

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Note: AdWords is Google’s pay-per-click program where an advertiser chooses words that will trigger their ad. The advertiser is charged only if their ad is displayed and clicked by a searcher. This unique pricing model not only ensures that an advertiser’s message is seen but that the advertiser pays only when someone arrives at their website.

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Advertisers would only choose to display their ads on keyword searches that were related to their products or services. Since their ads would then only be shown when someone was searching for related information, these ads would help the searchers find what they were seeking.

Before the days of PPC, the ads alongside a search results page were often banner ads that had nothing to do with the search query. While these ads did gather many impressions (an “impression” is when an ad is shown on a page), they were not relevant to the user and thus were rarely clicked. Advertisers were paying for exposure but were not receiving much traffic for their ad dollars.

In the early days of Google, before AdWords launched, the founders of Google had been questioned many times by their investors about how they would eventually monetize their search engine. At that time, the founders did not have an answer; however, they held steadfast to the belief that at the moment someone was shown a page of search results, Google had their undivided attention. It would be in that moment of someone scanning a page of search results that Google would make its money. It turned out to be an accurate observation by the early Googlers.

By displaying ads based on what someone was actively seeking, GoTo.com formed a synergy between searchers and advertisers that helped both reach their goals on a single search page. Advertisers would receive visitors who were actively seeking their products, and searchers would find products that were related to what they were seeking. This was a win for both searchers and advertisers.

The second concept was the pricing model. Previously, almost all advertisements were based on paying for impressions. A company would decide how many impressions they would like to buy for their banner ads, and then they would pay on a cost per thousand impressions (CPM) basis. This created a scenario where you had to have a large advertising budget to even sign an initial contract. In addition, you had no idea how many visitors or sales those ads would bring to your site. The world of Internet advertising was mostly formed by larger companies or companies with venture capital backing.

By changing to a PPC pricing model, advertisers paid only when they received traffic. This shift to performance-based advertising allowed companies to try a fledgling business model with little monetary commitment. The minimum monthly spend was roughly $1 per day, a big change from minimums that were often several thousand dollars a month.

Because search engines were paid only when a click occurred, it also forced search engines to show only relevant ads. If an ad did not get clicked, the search engine did not make money. The pricing model helped reinforce that only relevant ads should be shown on a search results page. This forced advertisers and search engines to work together to create a better search page for the consumer.

The third concept—and how Yahoo!, Bing, and Google have built a base of more than a million advertisers—was the signup process. GoTo.com removed the barrier of a salesperson between the advertiser and the inventory. Using a self-serve ad model, any advertiser could sign up for a PPC account and start selecting keywords and creating ad copy within minutes (Figure 1-2).

Figure 1-2: The AdWords signup process is a simple wizard influenced by GoTo.com.

By choosing a self-serve model, a search engine did not have to pay commission to a salesperson. There were no contracts to sign, no insertion orders (IOs) to fax, and no phone calls to be made before you could start advertising on the Web. This straightforward approach allowed anyone, from a small business to a Fortune 500 company, to quickly experiment with Internet advertising.

The Internet was still a new concept to most people, and both companies and consumers were unsure how widely adopted the Web would become. Thus, having the ability to commit a few dollars and experiment with the new medium was paramount to introducing thousands of new companies to the concept that they could make money on the Web.

It also enabled the search engines to scale their advertiser base quickly. People often slow down the advertising process, and allowing a self-serve model meant that the only barrier to advertising was a bit of time and a credit card.

The last concept is what has allowed Yahoo!, Bing, and Google to make billions of dollars from their advertisers—the auction process. GoTo.com did not have a set price for what you needed to pay when a keyword was clicked in a search result. Advertisers set a price of what they were willing to pay, and the company willing to pay the most showed up highest in the search results.

If you were willing to pay more than your competitors, then your ad would show higher in the search results, which would gather more clicks and bring more visitors to your website. It is easy to see how the top positions were highly coveted.

The process has become much more complex over the years as search engines, users, and advertisers have become savvier.

In October 2001, GoTo.com, Inc., renamed itself Overture Services. In 2003, Overture was acquired by Yahoo! for $1.63 billion. In 2009, Microsoft and Yahoo! formed the Search Alliance. With this new deal, Yahoo! would now serve ads from Microsoft’s adCenter platform, now known as Bing Ads, and the original PPC engine would no longer be used by anyone.

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Yahoo! vs. Google

In 2001, GoTo.com was awarded the patent titled “System and method for influencing a position on a search result list generated by a computer network search engine.” This patent is the heart of PPC advertising technology. In April 2002, Overture sued Google over patent infringement. The lawsuit dragged on for two years, during which Yahoo! acquired Overture, until it was time for Google to transform into a public company. Not wanting to go public with a major lawsuit that threatened its revenue, Google finally settled with Yahoo! by issuing 2.7 million shares of stock in exchange for a perpetual license to the patent.

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Today, GoTo.com is an unknown name to most people; in fact, GoTo.com is no longer owned or operated by Yahoo! and has changed hands a few times over the years.

As described earlier, GoTo.com’s four founding concepts were quite simple: relevance, pay-per-click pricing, self-service, and auction-based pricing. However, these principles were combined not only to quickly gain advertiser adoption, but also to reap the monetary benefits of advertiser competition for the top ad positions.

Google Enters the Arena

In 1998, when GoTo.com was first launching, Google’s search engine was just renamed from BackRub and was running on Stanford University servers. Creators Larry Page and Sergey Brin were more concerned with moving their operations into S...