Three 70% Deltas Affecting 100% of Your AdWords Account (Part 1)
Published: February 9, 2012
Author: Joe Stanton
I need to start this blog post with a disclaimer – 70% is a totally random number. That being said, it’s a much more catchy title than ‘Three really big deltas in your AdWords account’ or something like that. Now, on to the post!
I’ve met a lot of SEMers in my day, and they sure do define success differently. Some are scratching for 2% Deltas, others 80% MoM growth! It really depends on how mature your account is, and how badly the person before you managed it. That being said, whether your account is in the top 1% or the bottom, there are three big topics you should be considering that affect your entire account. If your SEMer hasn’t at least mentioned these topics, they’re missing the forest and focusing on the trees. Today we’ll focus on the first: Top vs. Side ad positioning.
Where you’ll find the 70% Delta: Profit, Revenue, or Conversion volume
What You Need to Know: On July 13th, 2011, I lost some secret sauce! That was the day Google gave all SEMs part 2 of the holy grail of AdWords data (the first being the SQR) in the top vs. side report (now called ‘top vs. other’). Google’s angle was to get advertisers to understand the CTR difference depending on the location of your ad on the Google SERPs. I was always aware of this difference, but not until Google gave me a report did I see just how big the difference was. Even so, I instantly liked this report because CTR conversations no longer had to be just about product positioning and keyword stuffing. Turns out, real estate had it right the whole time: location, location, location! Whether your ad is on the top or part of the dreaded ‘other’ is the single greatest factor in your CTR.
I took three B2C accounts managed by PPC Associates and ran a ‘top vs. other’ report. I only considered Google.com data and only pulled data from exact match keywords. Here are the results of the aggregated account data:
I’d like to see someone write an ad with a 3,338% CTR delta, because that’s what top vs. other shows us!
What’s great about this data is that it’s not skewed (much) by aggregation. If you a/b test a given exact match keyword, I’m very confident you’ll find at least a 700% delta between the last ‘top’ position and the first ‘side’ position.
Unfortunately, I haven’t used the position ValueTrack parameter extensively enough to map out the CTR differences by ad position, but I’m sure it’d look something like this:
Why it’s actionable: If your goals are primarily visits-based, then you know exactly what it takes to get your account to the next level. In short, you’ve got to kick up your CPCs enough to get in the top. Luckily, with the ‘top page bid estimate,’ you’ve got a good starting point to report to management. That being said, you’ll still need to pull your ‘top vs. other’ report to confirm your bids are high enough.
If you’re using an ROAS or a CPA goal, and are managing PPC with some positive margin (especially one of 25+%), you’ve got something very important to consider. ROAS is a great metric as a proxy, but if you really want to maximize profit, you need to pay attention to top vs. side. If you get 7x as many quality clicks out of 1t3 (first page, third position on top) vs. 1s1 (first page, first position on the side) for only a 10% higher CPC, your much more profitable move (by volume) is the former, albeit it at lower profit margin per order. By extension, the same can be said for CPA-based goals. If you’ve been sold on ROAS, and your bidding platform doesn’t have the ability to ‘maximize profit,’ the platform isn’t considering CTR in its calculations. If so, you should certainly explore one that does!
At the end of the day, you need to do the math associated with ‘top vs. other’ (even if it’s just to make sure your algo has it right). This is one instance, however, where all that number-crunching is actually worth it! The pot at the end of the rainbow isn’t a 5% delta; it’s an ‘Oh man, I so deserve a promotion right now’ delta.
How to Pull the Data: Keyword Tab –> Download button –> Ad Segment –> Top vs. other.
I recommend focusing on Google.com exact match data when dealing with hard math (because the data is more valid when compared to phrase or broad, which is really just an aggregate of hundreds of auctions).
Please look for parts 2 and 3 over the upcoming weeks!
– Mike Nelson, Senior SEM Manager