What have we done so far in this course?

1. What have we done so far in this course? • Did the necessities and basics (formed teams, reviewed Web searching, examined the search engine market, sponsored search) • Reviewed selecting a business and picked a client • Set-up AdWords Accounts and explored the AdWords platform • Challenge Requirements (Pre and Post- Reports) • Began campaign structure including Ad groups • Went into detail on keyword selection and keyword matching • Investigated Ads and ad techniques • Geotargeting and dayparting • Introduced the Google AdWords Editor Awhole bunch of stuffin only10 lessons! Now what?

2. We are going to start bringing it all together! By design and necessity, we’ve been covering one or two links of the keyword advertising chain at a time Now, we start seeing how everything links together to form the whole chain (i.e., keyword advertising process)!

3. Tracking Performance:Metrics, Measures, and Money Jim Jansen College of Information Sciences and Technology The Pennsylvania State University jjansen@ist.psu.edu

4. Let’s frame it within GOMCHA

5. The Challenge This is a course, so major goal is the learning objectives, but … … why not do your best? • Two written components • Pre-Campaign Strategy • Post-Campaign Summary • One computed component • Campaign Statistics

6. Today, we are going to first going to focus on the campaign • …. Why? … • Will help use in achieving our learning objectives … the Challenge criteria are everything that a good campaign should be doing! • Also, places the metrics and measures in some context

7. The Challenge What statistics are used for scoring? • Two written components • Pre-Campaign Strategy • Post-Campaign Summary • One computed component • Campaign Statistics

8. The Scoring Algorithm • Doesn’t just look at performance (note: campaign doesn’t evaluate converts … but mention them in the written reports!) • Final algorithm incorporates 30 different signals in 5 categories • Account structure • Tool and feature usage • Advertiser savviness • Budget management • Performance • The Campaign Statistics algorithm will determine the top 50 accounts in each region. • Independent Global Academic Panel will review the Pre-Campaign Strategy and Post-Campaign Summary reports of the top five teams in each region to determine the regional and global winners. • It takes great Campaign Statistics to make the regional top five, and then great written reports to win!.

9. Campaign Statistics Algorithm • Account Structure - Did the team set up their campaign in an efficient manner? Was it structured against product/service lines and themes? Did it contain Ad groups with relevant Ad texts/variations and keywords? • Optimization Techniques - Did the team take advantage of tools and methods to get the most out of their campaign? Did the team follow the best practice encouraged in the Challenge guides and support materials? • Account Activity & Reporting - Did the team review and change their approach over time to get the most from campaigns? Was the account regularly monitored and did the team check and react to the reports available? • Performance & Budget - How effectively did the team use the available budget across keywords throughout the competition? • Relevance - How relevant were the team's ads? What click-through-rates were achieved?

10. Campaign Statistics • Good campaigns and good Ad groups! • Most of this we have covered already (but some more coming!) • Account structure: An excellent account structure • mirrors the structure of the client’s Website • campaigns grouped by product lines • each campaign contains multiple Ad groups • each Ad group contains ad texts/variations specific to these subsections and a targeted and specific keyword list

11. Campaign Statistics • Good campaigns and good Ad groups! • Most of this we have covered already (but some more coming!) • Account structure: An excellent account structure • mirrors the structure of the client’s Website • campaign grouped by product lines • each campaign contains multiple Ad groups • each Ad group contains ad texts/variations specific to these subsections and a targeted and specific keyword list • in other words … think of this illustration …

12. The Account Structure should reflect yourmarketing strategy!(the details should support this strategy!) Think of this as your company. Think of this as Product or Service lines. If your client has a good Website, you can model your campaigns off the major sections of the Website. Budget stuff happens here! Think of this as individual Products or Services. Link each Ad group to a specific Webpage on your client’s Website. Keyword selection and a lot of critical metrics happen here!

13. Campaign Statistics • Use both search and content networks! • Leverage the entire toolbox of PPC techniques! • Jansen suggestion: if you decide not to use some technique, explain it your written report • Optimization techniques • how well you implement the optimization techniques and best practices (e.g., geotargeting, keyword matching variations, DKI, A – B testing of ads, dayparting, etc.) • how you optimized the Google search network to your advantage • how effectively you used the content network

14. Campaign Statistics • Use the report features to the their max! Account activity & reporting • Review and change your approach over time to ensure you get the most from your campaigns (i.e., engage your campaign multiple times a day, split Ad groups, revise ads, change budget) • Use the Report Center and take actions as a result • Look in AdWords accounts Report • Nice overview of reports at https://adwords.google.com/support/bin/topic.py?topic=69&hl=en_US • We’ll get started on this today!

15. Campaign Statistics • Continually monitor and adjust bids! • Don’t got over budget! • Performance & budget • effectively use your budget across your keywords throughout the competition (*don’t* go over!) • edit the cost-per-click of individual keywords during campaign (keyword management everyday!) • Again, we’ll discuss bids and budget, in fact we start today!

16. Campaign Statistics • Work to the best metrics possible, especially CTR! • Relevance • Achieve a strong click-through rate (need to get clicks in addition to impressions  daily keyword management). We cover these today! • Create relevant and effective advertising (write good ads that get clicks!) • Revisit your campaigns and change where necessary (focus not just at the Ad group level, but also the campaign level) 16

17. Okay, a lot to chew on … Let’s take it one bite at a time Today, we start with Relevance measures • Account structure • Optimization techniques • Account activity & reporting • Performance & budget • Relevance measures

18. First Some Definitions • Impression: The displaying of your ad one time to one user • Click: The action of a user clicking on your ad

19. A user query Links to one of your key phrases Causes an ad to appear This is an impression

20. A user clicks on the ad, causing …

21. … the landing page to appear. This is a click.

22. Kind of basic, right? Yes, but important! • Impressions and clicks are the basis of nearly every important metric in online advertising!

23. Some Important Metrics Clickthrough Rate (CTR) Percentage of how many people clicked on your ad given the total amount of impressions CTR = Clicks / Impressions CTR can tell you a lot of things (like how much searchers like your ads) and influences when your ad is shown and ad’s rank on page Cost Per Click (CPC) The amount you pay Google every time someone clicks on your ad. You only pay when someone clicks your ad! (Note: similar to your bid per key phrase, but not quite. More on that later when we talk budget.) Average Position (Ad Rank) The average position that keyword ad held for the day Conversions Very important for marketing purposes, but you would need access to Google Analytics on client’s Webpage.

24. CTR Clicks ---------- = CTR (expressed as %) Impressions CTR is a measure of relevance of your ad, your keywords, your landing page

25. CTR Note a key thing here – Advertiser B has a higher clickthrough rate. But, does this really mean that Advertiser B has the ‘best’ advertising campaign? …Let’s talk. Example Advertiser A: 20 Clicks ---------- = 0.02 = 2 % CTR 1,000 Impressions Example Advertiser B: 3 Clicks ---------- = 0.03 = 3 % CTR 100 Impressions

26. Okay, but what should you be shooting for? • Varies by campaign, client, budget, etc. • But, let me give you some advice and marks on the wall

27. Jansen’s Suggestions • Impressions – you have to get impressions at all cost! (Analogy to fishing: Doesn’t matter how good your techniques and equipment are if there are no fish.) • Clicks – potential customers must click on your ads (Analogy to fishing: This is where your equipment and technique come into play.) • CTR – generally the higher the better! Only two points of adjustments, decrease impressions or increase clicks. (Analogy to fishing: There may be a lot of fish where you are at (i.e., impression) but you only want certain fish (i.e., clicks by potential customers).)

28. Jansen’s Suggestions • CTR – the higher the better! But, what are we aiming for? • Depends totally on client, your skills set, budget, etc. So, no industry standard. • However, here are some marks on the wall. • CTR of 0% to 1%: why bother? • CTR of 1% to 2%: reasonable for your budget • CTR of 2% to 5%: given your budget, excellent! • CTR of 5% to 15%: unbelievable! given your budget

29. What is a good way to monitor these metrics? • Use the reporting tools in AdWords!

31. There are several types of reports • Keyword Performance • Ad Performance • URL Performance • Ad group Performance • Campaign Performance • Account Performance • Search Query Performance • Placement Performance As you can see, covers nearly every aspect of your keyword advertising effort!

32. Team Exercise for Effective Campaign Management Individually: • Go to Reports, and set-up a Campaign Performance for *your* campaign that provides you daily data from the prior day. Have the report run daily and email you the results. • Review the other report formats. Jot down the ones you believe would be valuable for the team to monitor As a team, • Decide on what metrics you are going to track and what reports would be beneficial at the team level. • Assign responsibilities for a report to an individual. • Set-up the required reports as you see fit. Take about 20 minutes

33. Bidding Strategies … • First, we need to take some metrics

34. Bid metrics (like CTR) impact campaign success and Quality Score! • CPC – Cost Per Click (Sort of what you bid. Going to cover this in a moment) … but also … • Quality Score • High quality scores can drive down your ad cost. • Low quality scores means that your ad (or landing page) isn’t very relevant to a keyword and is likely to perform poorly

35. Cost-per-click (CPC) • Jansen’s suggestion: go for individual bids on individual keywords Min Bid CPC is the minimum amount an advertiser pays to run an ad. It’s set by the AdWords system and often based on Quality Score. • Google state “inactive for search” – increase quality or bid to activate. Much easier to increase bid; however, long term … not good.) Max Bid CPC is the amount an advertiser is willing to spend each time clicks the ad. It is set by the advertisers. The price you pay is generally somewhere in between the two. You can choose either one bid CPC for the entire ad group, or different bid CPCs for individual keywords.

36. Let’s talk some bidding strategy

37. How much to pay per click?One Method: Find out your Break Even Point What constitutes a successful conversion? Conversion = sale from an online ad What is the net profit for a successful sale? Example: $19.37 = profit per product sold What is your conversion ratio (e.g., percentage of visitors who click on an ad and buy a product)? Example: 2.39% = conversion ratio net profit x conversion ratio = break even point $19.37 x 0.0239 = $0.46 You’re losing money on every sale if you bid above this Note:Conversion rateis not CTR! It is the ratio of converts to total number of customers who clicked on your ad.

38. How much to pay per click?Another Method: Find out your ROI Even though ‘photography classes’ results in fewer clicks than “photo equipment’, you should allocate more budget to photography classes by increasing the maximum CPC for ‘photography classes’ while decreasing the max CPC for ‘photo equipment’ ROI = ((Sales Revenue – Ad Cost) / Ad Cost) x 100

39. Okay, but where to start? • You have $200 • You have 21 days • Jansen’s suggestion: start out at $9 /day for the entire account cap • This implies – cheap keywords = long tail (around $0.30 or cheaper CPC; need a balance here; remember, you have to get impressions!) • Re-allocated funds (up or down) at end of first week and second week • Keep $20 in reserve for last few days

40. Questions?

41. Okay, speaking of those campaigns … • Really want you to set the start and stopdates • So, do this: for those campaigns that you could not set the start date. Copy them (use Google AdWords Editor), set the start and stop date (29 March to 18 April) for the new campaign. • Upload new campaign to your account • Delete the old campaign

42. Also, reminder About Pre-Campaign Reports? • The report (in the state that you would submit it to Google) is due to me Thursday 4 March • You will get it back over Spring Break with feedback • Sorry, no class time. Use the Thursday 18 February as team time. No class on Thursday! • Only stuff you need that we haven’t covered is content network (next Tuesday). • Team leaders: reminder of class time is yours

43. Thank you!(reminder to do your daily logs) Jim Jansen College of Information Sciences and Technology The Pennsylvania State University jjansen@ist.psu.edu