So your ad is sitting on position 1 on Google, and you get a reasonable amount of clicks a day. Your ROI is excellent and you think you have optimized your campaign to it’s full potential… You may also be mistaken.

One of the metrics in the Google Adwords reports that is often overlooked by search engine marketers is impression share. Impression share is basically your campaign’s market share of all the impressions it is eligible for. If you are bidding on the word ‘widget’ you would ideally like your ad to be shown every time a user searches Google for this term. Many people will be surprised to hear that this is not the case, not even if your ad is normally in the top position.

Here’s why: every time a user enters a search queries, Google executes an auction to determine which ads should be shown. As your competitors come and go, and alter their bid prices, your ad does not always win this auction. Sure, on average you might be doing OK but most likely you don’t win every auction.

According to the Google reports, there are two reason why you might not reach your maximum impression share. Firstly, if your daily budget is too low, Google will exclude you from certain auctions in order not to exceed your budget. In the other case, you lose the auction because your ad rank is too low.

Google defines ad rank as the product of Quality Score (QS) and your max CPC so increasing either of these two factors will increase your ad rank. Unfortunately, Google only reports on impression share on a campaign level, so you need to structure your campaigns cleverly to make optimal use of this data. For instance putting all your trademarked keywords in a seperate campaign will help you to determine how often your ads are shown when someone searches for your brand (ideally, this should be 100% of the time).

The easiest way to increase your impression share is to increase your max CPC. Increasing your bid prices doesn’t mean that your effective CPCs will increase, especially not if you’re already occupying the number 1 position. It does definitely increase your risk though, as a determined competitor could send your CPCs soaring. And it definitely will increase your total costs as you will gain more impressions and more clicks. But as long as your are generating profit from your increased traffic, it makes sense to try and grow your impression share.

Obviously obtaining a 100 percent impression share is unlikely to be a viable goal. But looking at this metric will give you a good idea of the size of your potential market and your position in it.

The whole idea behind a negative match is to cut out irrelevant impressions, and possible clicks, on your advertisements. Irrelevant clicks are similar to unwanted customers, or even shoplifters coming to your store. Of course, if you’re running a large campaign thats generating a lot of traffic, it becomes difficult to monitor your traffic.

This brings me to my principle argument. Negative matching is not always a helpful procedure, and in fact, if done wrong will ultimately be damaging to your campaign bottom line. For instance, if I’m selling goods for a merchant who sells organic products, but does not stock pumpkin seeds, I will most likely have to use negative matching for certain keywords. I’ve structured my account in such a way that I have made one campaign for organic skin products, and another for various organic food products. Now to the negative matching. Instead of running negative matches on [pumpkin seeds], [cheap pumpkin seeds], and [what are pumpkin seeds], I simply need to broad match the negative keyword ‘pumpkin’ on a campaign level.

The more complex negative matching happens when you have conflicting keywords in similar campaigns. For instance, your food campaign contains different brands of poppy seeds, as well as various brands of sunflower seeds. ‘Organix’ has both types of seeds, while ‘Natures Way’ has only sunflower seeds. Broad negative matching on a campaign level, for either the brand, or product in this case creates a problem. In this situation negative matching should ideally be done on an ad group level, using broad match types.

For a campaign with 100 000 keywords though, where the merchant has a vast product line, this process is very time consuming. The ideal is that you want to cover the long tail of negative matches, giving you a high CTR, with relevant copy, and a great landing page for every keyword you’re running, but more often than not, the time requirements of these bigger campaigns do not allow for this. If you don’t have the time for group level negative matching, then the second best thing is to look at your high density and high traffic keywords…either before or after the campaign has launched.

If it’s before the campaign launch, you can use Google’s traffic estimator tool (allows for bulk operations), and then run your high traffic keywords through the keyword tool. In this case you can do some head negative matching pretty quickly for all your high traffic terms.

If you want to do negative matching afterwards, take your existing information on your high impression keywords as a pointer of where the work needs to be done.

Lastly, with regards to negative matching for newly generated keywords. Personally, I feel that instead of exact negative matching all keyword terms that are irrelevant, I would firstly look for patterns in your irrelevant keywords that you could generate strong broad negative matches for. This will get to the root of the word, and avoid any possible misspellings/variations that could come up the next time you do new keyword research. By simply running exact negative matches, you are not accounting for the sheer amount of semantic variation that Google has to deal with on a day to day basis.

Any other thoughts on improving your CTR through negative matching?

Over the past few weeks we have been spending extra attention to the evil beast of PPC advertising: click fraud. During the holiday rush it is easy to miss suspicious traffic since the ‘normal’ campaign metrics no longer apply. Traffic soars, adcopy needs to be updated to reflect the latest offers, items go in or out of stock, seasonal and holiday related keywords come and go. All this within the space of a few weeks.

There were two main reasons to really scrutinize our traffic for fraudulent clicks at this time of the year:

1. To offset the increased risk of click fraud during the peak retail season.
2. To see if Google’s assertion that they catch most invalid clicks holds true when traffic volumes spike.

We looked at mountains of data from our campaigns and created experiments to test the robustness of our own monitoring systems and Google’s filters. In general, we found that both performed really well although one can never assert with 100% probably whether or not a click is fraudulent (the best you’d come to certainty is when it converts into a sale).

We learned a lot from this exercise and decided to update our click fraud risk calculator based on our findings. This calculator does not tell you what percentage of your traffic is fraudulent. Google already does an excellent job at that if you’re not using your own (or third-party) monitoring systems. What it does do is assess the risk profile of your PPC campaign so you can take appropriate measures to mitigate this risk.

Hopefully you will find our little tool very useful and if you are interested in a more in-depth analysis of the intricacies of click fraud, have a look at this Google click fraud presentation, or read more about our findings here.

In a previous post I explained why companies should use their brand name in their PPC campaigns. In short, you should be doing this because it can be a source of cheap traffic and because you need to ensure that your competitors do not take up the prominent top PPC listing when people search for your brand. That said, who should you trust to do your brand bidding for you?

Traditionally, brand management has been the domain of offline advertising agencies. But from what our company has seen so far, these agencies are terrible at running a decent PPC campaign. They offer it to their clients because they want to ‘own’ a client and offer him a full range of marketing services. But in general what the client gets in return is not good value for money. Agencies will run a PPC campaign on a few broad keywords, including brand names, and will generate a probably decent amount of traffic but for a sizeable management fee, usually a percentage of advertising spend.

Based upon data from campaigns that we run for our clients, between 40% and 60% of search traffic is generated by a client’s brand name. So running a PPC campaign just based on a few keywords is feasible if you have a well known brand but you lose out on a large portion of potential traffic if that is all you do.

The question is, should you be paying your agency a lot of money to run a small brand based PPC campaign? Probably not.

An alternative option is to let affiliates use your brand name in their campaigns. But If you only have a few affiliates, they will also behave like an agency and just run a small campaign based on your brand name. After all, it will give them the greatest return for their effort. It is basic economic theory in practice. They will get a very good ROI on the cheap brand name traffic and are not incentivized to expand their campaigns to include the 40-60% of potential customers you are missing out on.

If you have numerous affiliates however, the competition amongst them will ensure that bid prices for your brand name increase so much, that your affiliates are forced to expand their campaigns into the (less competitive but less lucrative) long tail to generate more profits.

This scenario probably maximizes your traffic volumes but having plenty of affiliates makes it difficult to police their behavior and protect your brand. Although there are plenty of reputable affiliates out there, there are also the rotten apples seeking a quick gain at any cost and your brand reputation could suffer.

So what is the best option? Personally I would not be comfortable to make my brand name available to any PPC marketer if I did not have a personal, direct relationship with them. This rules out making your brand available to affiliates indiscriminately. I would select affiliates with a proven track record and with solid references.

At this point, I would not chose a traditional agency if they charged me a percentage of spend on my PPC campaign.

Would I run my PPC campaign in-house? I would, if I had the expertise, a well-known brand and a small set of products or services on offer. Otherwise, you’re better off to outsource it.

In the end, it doesn’t really matter who manages your (brand based) PPC campaign, as long as they offer you full transparency. Chose a PPC marketer that you can trust and that will work closely with you to optimize your acquisition costs. Incentivize them to perform and don’t reward them to spend money on your behalf without accountability. Verify that you get the most amount of qualified traffic for your money!

As I have said before, you cannot hide bad performance for long in the world of PPC. That is why affiliates tend to be better at PPC than agency. They have to perform to survive. But a fee-based agency could be more incentivized to look after your brand’s reputation. There is however no reason why the two models cannot be merged. With full transparency and accountability it is possible to reach a business model that combines the performance of an affiliate with the trust of an agency.

Some retailers and traditional advertising agencies are not keen on using a company’s brand in a PPC campaign. There are two main reasons why I believe not using your brand power in PPC is a poor decision. These two reasons are not necessarily the ones cited by marketing managers as they might be hesitant to admit their real motives.

First of all, ‘brand management’ has always been the traditional marketing agency’s ivory tower. It is what they do and in a way, it is the only thing they do. Very little of their advertising spend has an accurately measurable ROI. These agencies do not want to cede any ground to PPC marketers because it is an area they tend to have very little expertise in and they just feel threatened. It is easier to convince their clients that brand bidding is pointless in PPC advertising and to retain exclusive control over a client’s brand.

Secondly, their clients listen because they are cost conscious. They spend large amounts of money on building their brand in the traditional media so why would they spend any more on PPC? Obviously, if consumers are searching for their brand on search engines that means they already know the brand. No need to spend even more money on PPC ads. All they need to do is sit back and hope that the consumer actually finds their site. Right?

As retailer, you are now reliant on the fact that your site shows up on top of the natural search results for the query that the user typed in on the search engine. This is a fair assumption if you have a well established website which was built using SEO best practices. But it is also a fair assumption that your competitors are bidding on your brand and that their ads will appear above you natural listings. Consumers are a fickle bunch and a well written ad might persuade them to shop at your competitor instead.

In addition, consumers will find numerous ways to misspell your brand name. Are you sure your site will come out tops for each of those misspellings? In PPC campaigns, Google will match your ad automatically to its misspellings and with one ad, you can target all those consumers who otherwise might never find your site.

Finally, more and more people (like myself) type a brand name into a search engine (it’s so tedious to type the ‘www’ and the ‘.com’) and expect the search engine to come up the with the site we’re looking for. Just check out the popularity of these two brands on Google. Do you really want to rely on natural search results to drive this traffic to your site?

Yes, it does not seem fair that you need to pay for your brand name in PPC campaigns when people could find your site through other means, but that is exactly what search advertising is about: making it easy for people to find what they are looking for.

PPC based brand bidding is not expensive relatively to bidding on more generic terms. Google will give you an excellent quality score when you bid on your own brand which means CPCs will be really low. But there are quite a few caveats which you should take into account when outsourcing your brand bidding to a PPC marketer. I will address these in a next post.

To conclude for now: brand bidding constitutes an additional cost to your brand building marketing campaigns but the cost is likely to be marginal. And for this marginal cost you can ensure that your potential customers do not get lost on the way to your site. A small price to pay I would say.

Most people who have some experience with PPC marketing will be able to tell you all about ROI, CPCs, conversion tracking and the likes. They will also tell you that adcopy is important and that it is a good idea to test adcopy variations to see which one performs the best. But as adcopy goes, that is where most marketers’ knowledge stops.

Most aspects of PPC are easily quantifiable which is why this marketing channel is so successful. You can measure exactly how much revenue your advertising spend is generating. But beneath the clarity of ROI, there a lot variables (known and unknown) at play. Variables which cannot as easily be measured.

The Cinderella of these variables is definitely ‘the adcopy’. Although search engines do try their best to assign a quality score to the adcopy, this quality score is only relevant to the advertiser because of its impact on the eventual CPC. It is nearly impossible to measure the impact of the adcopy on the psyche of the search engine user.

Forget about your portfolio of keywords, your adcopy is what users will eventually see in their search results. It is your virtual shop window and you should take great care in designing it. Unfortunately, search engines often have different ideas of what constitutes good adcopy.

For instance sometimes adcopy with a relatively low CTR proves to have an excellent conversion rate. This would be the type of adcopy preferable to an advertiser, because it reduces the amount of unqualified traffic. In a PPC model however, search engines have little incentive to reward adcopy with low CTRs. Cost per Acquisition (CPA) models should therefore gain more and more ground in the future as they align quality scores with advertisers’ goals.

Untill that happens though (Google’s CPA model is only in beta so far) don’t give up on experimenting with your adcopy. I would always focus on adcopy that converts best, and ignore quality scores initially. Once you know what it is that entices your visitors to convert, you can always try to make your adcopy more search engine friendly or create dedicated landing pages tailored to your adcopy.

By taking this approach, we managed in some cases to create adcopy with a CTR and conversion rate identical to the initial one but with an average CPC that was 30% less (and this without altering the keyword bids). Just play with the length and the phrasing of your ads without changing its meaning and you will be surprised at the impact on your CPCs.

Some people like to ignore adcopy optimization because of its unquantifiable properties but when you think of it, it is what makes search engine marketing an art rather than ‘just’ science.

Picture the scene, New York June 2007, I’m attending the LinkShare Symposium. An advertiser approaches says he has heard good things aboutClicks2Customers. He wants to know whether Clicks2Customers would be interested in working as an affiliate driving paid search traffic to his site; a site that would go on to win a golden link award that night. The advertiser was a large brand and niche with large product set which would provide multiple search permutations – a perfect fit to match Clicks2Customers capabilities.  The only stumbling block would be, could I get…  would he give…  access to the display URL? I answered in the affirmative, but explained that we only ever work if we could drive traffic directly to the display URL. So no jump pages or white labels; direct traffic only. He thought about this for a few seconds and then responded “what a novel approach”; seems no one had asked him for direct access before!!

So why have we as affiliates stopped asking? My belief is that it became too hard. The display URL is the Holy Grail and increasingly agencies and internal teams have made it their sacred domain. The reason given to the business decision maker, to restrict display URL is twofold. By the agency the reason usually provided is “ownership and management of the brand” and by the internal team its “to ensure their business does not pay an affiliate for traffic that they would have captured anyway as all the affiliate isdoing is stealing impressions from the internal team”.

So display URL s became increasingly restricted to the paid search affiliate channels and the agencies and internal teams won the war without a shot being fired! Should we blame the advertisers for making what we deem as rash decisions? No I say blame the affiliate who gave up so surprisingly meekly; surprising when one looks at the profile of the top affiliates – entrepreneurs that had been pioneers in the search industry.

It’s time we stood up and challenged the agency, challenged the internal team. For too long these two parties have managed paid search campaigns with all the protection needed to succeed; yet I can guarantee that 90% of all campaigns run by agencies and internal teams are run poorly. The business has no way of benchmarking whether the current incumbent is as good as the incumbent says he is. I believe the real reason that agencies and internal teams want complete control over the display URL is that they would be found wanting by any decent paid search affiliate.

Let’s challenge the current beliefs. Let’s educate the business owners. Affiliates will drive incremental traffic to a site given the display URL. They say all we will do is take impression away from them. I question what the price is that they are paying for that traffic. Bid on broad keywords at high cost per click and you will get lots of traffic. Does this mean you are running a good campaign? – NO!! It means you know how to waste money. And when ROI is questioned, search gets blamed as being too competitive; Google gets blamed for raising minimum CPCs. I say look at the team running the campaign. My tip to the business owner is look at what percentage of traffic is captured on the broads. If it’s a high percentage than you are paying too much for the cost per click and your conversion rates will be suffer. Should a high percentage of traffic be captured on the exact match then give your team a raise. Let’s challenge the business owner to test the team with the spoils going to the victor.

The current trends in the search engine marketing industry resemble the history of the diamond mining industry in South Africa. In the early days, anyone with a shovel could try his luck and start digging. Very much like the boom in affiliate marketing not so very long ago. But as the shallows sands of the Northern Cape yielded lower and lower returns, the opportunists left for greener pastures. Little did they know that underneath the rock layer much richer diamonds deposits were to be found. But mining these deposits required skill, technology and professionalism.

Today, the rush of affiliate marketing is over. It is increasingly more difficult for affiliates to compete profitably with other players in the market. Not only because companies place tighter restrictions on their affiliate terms, but also because traditional advertiser companies have smelled blood and they are using their deep pockets to corrupt the efficiencies of the affiliate model.

A bold statement perhaps, but we see evidence of this almost every day. The incumbent agencies have woken up to the fact that search engine marketing is not a fad and they are leveraging their client relationships to increase their search marketing portfolios. What they lack is the understanding of a marketing model which is performance driven and they tend to massively overprice their keywords. I find that traditional agencies are more often than not wasting their clients’ money and that they find it hard to catch up with pure-play search engine marketers in this fast moving segment.

The current state will only be a transition period because online, it is hard to hide poor performance. In the end, the pioneers who learned the ropes during the affiliate diamond rush will prove invaluable to traditional marketers and their clients alike to profitably mine the potential of the online consumer base.

Not everyone may like former internet and securities analyst Henry Blodget but generally I find his blog refreshingly honest and independent. Recently Blodget contemplated how long Google’s phenomenal growth could last. After all, it is easier to get to the top than to stay there and Yahoo and Microsoft are showing an increasingly dogged determination to reclaim some of the market share they have lost to Google over the past years.

Despite heavy investments in other areas, Google still makes almost all of its revenue from those familiar text ads and Blodget questioned how much longer it could maintain its stellar growth as advertisers are faced with increasing CPCs and decreasing marginal returns. Both Yahoo and MSN on the other hand have still relatively low CPCs so advertiser are incentivised to migrate some of their budgets to these search engines. But the response from search engine marketers was almost unanimous: despite lower margins, Google is able to deliver traffic volumes unmatched by its rivals and therefore it is simply not an option not to advertise on Google. Our experience is similar: outside the US, Google is almost the only search engine that matters, apart from a few local companies such as Baidu in China.

In the US, Yahoo and to a lesser extent MSN can deliver additional volume to mature campaigns but Google is generally the first choice when it comes to launching campaigns. In addition to volume, Google Adwords offers ease of use. This is not to be underestimated when managing many campaigns of various sizes. Yahoo and MSN completely rebuilt their advertising system in the past year but I can’t help feeling they somewhat missed the opportunity to offer simplicity. Just compare how long it takes to have a campaign up and running on Adwords vs. Panama (or -sigh- MSN).

All this admin is unnecessary overhead which adds to the hidden cost of running a campaign and it is something which Blodget didn’t incorporate in his argument. Google Adwords is not perfect and we regularly see peculiar behaviour that indicates that behind the scenes Google engineers do make mistakes. But the company is serious about search (and even more about search advertising) and seems far more proactive and aggressive defending its market dominance that its rivals appear attacking it. So although I won’t get into a discussion about whether Google’s market valuation is justified, I do believe that the company has not lost the drive and focus that made it thefifth biggest company in the US.

One of the stories that recently grabbed my attention was an article on PlentyOfFish.com. This free dating site almost epithomises the internet business model of the future: user generated content made possible by online advertising. I say almost, because the site is not quite ‘2.0′. In fact, it is a very basic dating site, and is hardly more than a user forum. But it is free, and according to this article it could be worth a billion dollars (by today’s optimistic valuations). It’s revenue all comes from advertising, mainly Adsense.

Adsense (or content targeting on Adwords) has never really been the prime focus for most PPC marketers. On forums such as Webmasterworld people invariably report mixed results from content targeting (more so than from search). Common complaints are low CTRs, low ROIs and high levels of click fraud. Nevertheless, Google reportedly makes 40% of its revenue through this channel and it is now allowing advertisers to hand-pick the sites on which they want their ads to appear, rather than rely on Google contextual algorithms.

So for some people, contextual advertising is obviously worth their while. As an advertiser, why would you want to consider contextual targeting and would you want to hand-pick the sites you want to advertise on?

I would argue that Google generally does a good job at matching your ads to content. ‘Relevancy’ is the cornerstone of Google’s success (not to mention revenue) so they are motivated to make sure you get quality traffic. But Google is also fighting a continuous battle with fraudsters who are incentivised to defraud the system because they share in the Adsense revenue. Advertiser can now exclude sites from their content targeting if they find that the traffic originating from them is of questionable quality, but there can be so many of them that is costly and time-consuming to weed them out.

Site-targeting eliminates that problem because it is an ‘opt-in’ rather than an ‘opt-out’ approach. You can choose to only advertise on site you trust. The trick is still to identify the right sites and I think the PlentyofFish example demonstrates that nicely. Advertisers like the site because people on a dating site are inherently searching for something (in this case, love). This makes the site very different from for instance a site like facebook, which is more used for entertainment and social interaction. Understanding the mindset of visitors and targeting ’searching’ visitors is key to running a site targeted campaign. The problem with site-targeting though is that competition for premium sites will soar, as will advertising costs.

But given the dynamics of the web there will be not be a shortage of new content and new customers anytime soon. All the more reason to get more familiar with contextual advertising.