Google Adwords more effective than ever:

How Search Relevancy and Ad Optimization are working together to improve advertiser results.

I am often asked by traffic people to comment on the differences between buying clicks from Google through the Adwords program and earning clicks from Google via the Organic Listings. Putting aside for a moment the fact that method #2 makes me feel like Robert Duvall in a Napalm Storm (lol), the reality is that it comes down to ROI. Assuming you know what you are making per click, the question boils down to what it costs you to buy a click, versus what it costs you to produce a page that will garner a similar click. I must draw attention to the word "similar", since, in my experience, there is a qualitative difference between the two. But, that difference is shrinking. Here's why.

Google has been working hard to improve the quality of its search results with, among other efforts, the institution of Trustrank. Now that trust factors figure into determining which organic listings Google displays on its results pages, relevancy and searcher satisfaction are increasing dramatically. The inevitable consequence of this is a reduction in average search time and a reduction of advertiser impressions per search. Fewer impressions sounds like a bad thing for advertisers, but it's not.

Many advertisers falsely believe that Adwords ads displayed on Google results pages are intended to compete with organic listings. This is not true. There is also the perception that the Adwords bidded-click system is designed to extract maximum revenue from the advertiser, with little concern for delivering the advertiser's ads to their most likely customers. This is also false.

The standard of performance Google has been working towards is that every search should end as quickly as possible, for having been satisfied. In some cases, the end of that search will be an organically listed Web site. In other cases, it will be an Adwords advertiser's site. But how can Adwords advertisers compete with increasingly relevant organic listings of increasing quality? The answer is they don't have to.

Just as organic listings are continuously optimized for relevancy and trust, so too are Adwords ads optimized on the basis of click-through rate (CTR).

Rather than assess the appropriateness of displaying an Adwords ad on a given results page on relevancy alone, Google's automated CTR optimization ensures that only ads that are performing for advertisers are displayed. This is why click-based advertising is such an improvement on CPM-based advertising for the advertiser. Unless you are advertising for visibility alone, and have no desire to bring visitors to your own site, what you care about is having people click on your ad. Thus, it is not that the ad with the highest bid will be displayed, but the best performing ad. A high click bid but no clicks is as worthless to Google as it is to the advertiser.

"We want to ensure that your keywords get a fair chance to run and that we do all we can to properly gauge their performance. We use a Quality Score to do this. Each keyword is given a Quality Score based on data specific to your account, including your keyword's clickthrough rate (CTR), relevance of ad text, historical keyword performance, the quality of your ad's landing page, and other relevancy factors.

Quality Score = keyword's CTR + relevance of your ad text + historical keyword performance + other relevancy factors... more

       The following diagram provided by Google illustrates the process of CTR optimization and determining the Quality Score of a keyword:

Some advertisers feel that the Quality Score is somehow a judgement against them. Quality Score benefits the searcher, because it prevents results pages from being crowded with irrelevant ads. But it also benefits the Adwords advertiser, because it spares them the wasted expense of paying for clicks from anything but the most interested prospective customers.

  Another trend that is benefiting Google Adwords advertisers is the dramatic growth of the Google Network. What is the Google Network?

"The Google Network is made up of sites and products who partner with Google to publish targeted AdWords ads via their site or product. Google can target your ads to search results and relevant web content on a wide variety of sites and products to help you reach a vast and highly-targeted audience... more

The Google Network is growing by leaps and bounds, and benefits Adwords advertisers in the following ways:

1. It increases impression opportunities for Advertisers beyond Google search results pages.
2. Ads are displayed on destination Web sites, where prospective customers are closer to finding what they want and where they will spend more time, thus creating still more impression opportunities for advertisers.
3. Google Network sites provide a rich context for even finer, more specific targetting.
4. The wide topical and geographic reach of the Google Network gives Adwords advertisers access to markets and customers they might never otherwise have reached.
5. Adwords advertisers are able to connect with prospective customers even when they have not used Google search.

Members of the Google Network participate in a program called Google Adsense.

Learn more about Google Adwords.

by Jack Mardack