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Google Ad Mis-Optimization – Applying the Logic of Conversion Tracking to Ad Rotation
Here is the simple, unadulterated truth – Google ad rotations are based on click-thru not on conversions. So if you are letting Google control your rotations then you are optimizing on the wrong variable with all of the concomitant problems that came with optimizing keywords on clicks not conversions. Indeed, the problem is much worse– because advertisements are far more sensitive to under-qualifying leads than most keywords. The wrong ad can be a far more effective (and expensive) driver of unqualified leads than the wrong words.
For many Search Engine Marketers, the most important seventy characters you’ve ever written may be the advertisement for your company on Google. Giant companies with powerful brand advertising can often get by very well with plain vanilla copy. The heavy-lifting, after all, is being done elsewhere. But in a face-off between relative unknowns that is so common in the world of SEM, the quality and punch of your Google couplet are vitally important.
And every direct-marketer knows that there is only one sure way to find out what works – test, test and more test. That’s what makes the Google Ad Rotation feature great. You can produce two, three or ten ads for a given set of keywords and let Google automatically rotate them for you. As Google monitors click-thru rates, they will adjust the rotations of each ad. Pretty soon, your one or two most effective ads are getting all the impressions. Fantastic!
Except they may not be good ads at all. They may be world-class crumby ads. And the good ad may be getting virtually zero impressions. Can’t happen? It happens all the time.
Here are some results from one of our clients who had twelve ad groups. In six of the twelve cases – fully half-the-time - Google was optimizing for the wrong ad.
Google Ad Optimization versus Conversion Optimization
| AdGroup | Ad | CTR | Conversion Rate | % of time shown
by Google |
| A | 3 | 0.49% | 2.80% | 35.46% |
| | 4 | 0.51% | 1.72% | 55.49% |
| B | 2 | 0.31% | 16.67% | 1.01% |
| | 4 | 0.43% | 0.42% | 57.17% |
| C | 3 | 0.05% | 1.39% | 46.04% |
| | 4 | 0.05% | 3.39% | 46.31% |
| D | 3 | 0.30% | 0.00% | 32.41% |
| | 4 | 0.29% | 5.56% | 33.37% |
| E | 2 | 0.15% | 25.00% | 4.71% |
| | 4 | 0.60% | 2.82% | 51.92% |
| F | 3 | 0.37% | 2.67% | 14.03% |
| | 4 | 0.44% | 1.46% | 49.52% |
| | 5 | 0.47% | 2.52% | 17.82% |
In AdGroup A, Ad Number 3 has a much better conversion rate than Ad Number 4. The advertiser would clearly like to see Ad Number 3 appear more frequently, but Google, looking at a tiny difference in Click-Through-Rate optimizes on Ad Number 4. In two of these cases (B & E) – the number of conversions is too small to be statistically significant (true, also of some of the cases where Google may be picking the right ad). However, in cases like A, C, D and F, it’s clear that the Click-thru winner (or co-champion in case C) is by no means the conversion winner. Simple multiplication reveals that in each case, you are paying significantly more and getting fewer conversions than with an alternate ad. This mis-optimization was happening fully half the time – suggesting that if you are relying on Google’s built-in Ad Rotations, you have a coin-flips chance of real optimization.
This isn’t going to change. Google, after all, can’t optimize for conversions. Many websites don’t track or even have conversions. And conversion is apples and oranges to click-thru. Besides, the whole point of ad rotation is to optimize their real-estate – not your conversion. Marketers jumped on the idea – thinking it optimized their conversion as well – but it just isn’t so.
Understanding the problem is easy. Doing something about it is more difficult. The first step is taking control of your Google rotations. If you have an ad that’s out-performing from a conversion standpoint but underperforming from a click-thru standpoint, you have to optimize it. How? By pulling the competing ads. It’s really the only way.
Understand that when you do this, you are going to be paying more per click and/or see a (possibly) substantial drop in click volume. It isn’t always worth it – it’s your job to balance the decreased cost of improved click-thru versus conversion. So an ad that performed much better on click thru and only slightly worse on conversion may be worth keeping. But remember – it’s the conversions that ultimately matter.
The second step is controlling the number of ads you test. For most sites conversion is a much lower percentage of volume than clicks – so you probably can’t optimize for nearly as many ads. Google will have cut the impression volume on most of your ads long before you can decide if they work. So we recommend using only two or three ads at a time in rotation.
The third step is categorizing words into ad groups that facilitate testing. We use our MarketScan tool to get accurate classification of words – not just in terms of relevance but in also for how broad they are – and that helps adjust ad groups in ways that facilitate real testing. By grouping words that are inherently “broad” into a single Ad Group, we can tune Ads that make sense for searches where a majority of the searchers probably aren’t interested in the offering. Clicks cost money – you don’t want a pushy high-incentive ad targeted to this group of searchers.
The final step is cultivating sensitivity to lead-qualification in your ad copy. The best ad isn’t always the best grabber. You need to be especially sensitive to this fact when your words are less than 100% relevant. With SEM, it always comes back to the words, and when you are buying words that are either broad or borderline relevant you need to be especially careful to make sure your ad isn’t maximizing pointless clicks at your expense.
Google Ad Rotation is a great feature. But if you’ve grasped the wisdom of optimizing for conversions, then you should now realize that isn’t the last or best word in determining your rotation. What it means, ultimately, is that optimizing ads on Google is not that different than optimizing on Yahoo. In the end, it’s you who needs to be in control of your rotation strategy.Alba Spectrum popular articles series: FAQ, Reviews, Introductions, Product Selections,
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