Amy Konefal serves as a search consultant for Closed Loop Marketing in Roseville, CA. When not fixated on Google, Yahoo, MSN, and optimizing client ROI, she enjoys traveling, rollerblading and spending time with family.
In order to serve high quality ads to our users, we use the Quality Score to set minimum bids for keywords based on keyword clickthrough rate (CTR), ad text relevance, the historical performance of the keyword on Google, and the user experience on the ad’s landing page. Keywords with a higher Quality Score are rewarded with a lower minimum bid, so it costs less for those ads to be eligible for display. Low quality keywords receive higher minimum bids, often making them inactive for search because their maximum CPC does not meet the minimum bid.
With Quality Score taking on more and more importance and Yahoo and MSN now adopting similar ranking methods, some new challenges have arisen for the conversion-based marketer. But first, before I fire off, let me say that I do applaud Google for many of the elements of the Quality Score. I do believe that marketers absolutely should choose targeted keywords, should craft highly relevant ads that focus on those words and should provide a great landing page that matches the searcher’s intent. Not only does this improve the searcher’s experience, but it also makes Google look better by providing more relevant results. And in the end it results in increased conversion rates for the marketer. Win-win-win.
However, there’s that pesky click-through rate which unfortunately is one of the most weighted elements in the equation. Grrr...
See, there once was a time when click-through rate, impressions and even clicks were not primary focuses of a successful conversion-based PPC campaign. I personally have had to talk many-a-client down, who at first glance thought their PPC campaigns had gone south, when in fact they were going north. “My click-through rate was 1 point lower this month!”... “My visits dropped by 500 clicks from Google this month!”... “Why are my impressions so much lower?”...
Once explained, clients would easily come to the realization that despite these decreasing metrics, the key metric to look at was conversions – total conversions (ie. sales or leads), conversion rate and cost per conversion. Quite often, conversions increase at the cost of declining impressions, clicks and click-through rate. But if you’re getting more sales or more leads within your given PPC budget, isn’t this a more than fair trade-off? Yes! It definitely is IF your main focus is conversions and ROI. In fact, often we purposely sacrifice click-through rates by stating price points and even hinting towards what we are NOT in the ad description to pre-qualify visitors and in turn increase our ROI.
However, those keywords that are getting lower click-through rates due to the use of strategic, pre-qualifying ad descriptions that are written for conversion, could end up being deemed ‘poor quality’ by Google. The result often is that the advertiser is forced to pay much more per click to compete in the listings (I’ve seen minimum bid requirements up to $20 per click!). Even when that very same set of keywords combined with the pre-qualifying ad description happens to be the winning combination that produces the most conversions and highest ROI for your company!
Since when is click-through rate a measure of quality for the advertiser? In most cases, if you’re a conversion-based marketer, it isn’t. Total sales/lead volume, conversion rate and cost per conversion are the true measures of quality for the conversion-based marketer, but Google and Yahoo are both making it harder and harder to manage campaigns to ROI goals effectively.
Case in point... while working with a franchise client recently, I ran 2 ads simultaneously. Within the character limits we succinctly stated the offer, a key differentiator and last... one ad stated ‘$25K to Start’ while the other simply stated ‘Get Started Today’. The purpose of this A/B test was to determine if stating the financial pre-qualification upfront would prevent clicks from the guy who saved up $5K and is interested in a cheap starter business.
The results? The click-through rate of the ‘Get Started Today’ ad was considerably higher than the ‘$25K to Start’ ad. However, the conversion rate and ROI was much higher for the ‘$25K to Start ad’. It definitely made sense for us to stick with the pre-qualifier and get significantly more franchise leads per month within the given PPC budget.
But in the end, the click-through rate element of the ‘Quality Score’ means that while ROI is increasing for this advertiser, this is going to be counteracted somewhat as Google hits them up with higher CPC requirements to stay ranked well among other advertisers with higher CTR’s.
There is much well-warranted discussion and speculation that this all boils down to the fact that the advertiser that’s raking in more clicks at the top of the Google results, regardless of whether they are a ‘quality’ match or not, produces more revenue for Google. Turns out that Google is a conversion marketer also it seems!
But what I’d suggest to Google and Yahoo is that they look at this from a longer-term perspective. Who is going to bring you more money over time? The advertiser who is successful because they’ve adjusted their campaign to maximize conversions... therefore seen that PPC can be one of their top ROI-producing marketing channels... therefore moved more of their dollars from traditional marketing to PPC ... and are sustaining and increasing this budget more and more over time?
Or the marketer who may very well be producing a large volume of clicks, impressions and a high click-through rate for their company... but quite possibly may not be impacting their company’s bottom line. Eventually, most smart corporations are going to pull back on their PPC budget regardless of the astronomical CTR, clicks and impressions they’ve managed to achieve.
In the end, isn’t conversion volume and conversion rate the best indicator of quality for most of us? The search engine users who clicked through found what they wanted and acted! The search engine user is now happy and the advertiser is even happier! Win-win.
The advertiser now loves PPC and is giving Google and Yahoo more money because of it. Win-win-win.
Don’t get me wrong. The reality is that this click-through rate element is probably not going away anytime soon, if ever. So my advice to conversion marketers out there is to capitalize on what you can control. Take full advantage of the elements of the ‘Quality Score’ that really do equate to quality:
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