Google’s New Adword Program Tested

Section 2 (Analysis)

How does Google compare to GoTo in terms of advertising effectiveness?

With GoTo you pay by the CLICK, with Google you pay by the IMPRESSION. Each calls for a different strategy.

As an example, on GoTo the term “mortgages” receives 338,444 searches per month.

If we bought the term “mortgages” on GoTo, we would pay their current cost of $2.30 per click (for the first position). We could reasonably capture 33844 clicks at a total cost of $77,841.20 per month. (2)

If we bought the term “mortgages” on Google, we would pay $15 per thousand (for the first position). Our total cost would be just over $5000.

But notice this difference.

On Google, we would have to attract just 2147 responses to match our cost per click ($2.30) on GoTo. Is that feasible? It would require a clickthrough rate of just .06%. — less than 1%. (3)

And on Google, if we could a achieve a 5% clickthrough rate, we would win 16,922 responses while our fixed cost would remain at $5000. This would lower our cost per click to just $.29.

That’s a significant savings, and while this example is purely hypothetical, it indicates the potential of a well-managed Google campaign.

Still, it’s important to emphasize that your risks with Google are higher because your success truly depends on how well your ad performs.

So how can we mitigate our risks? How can we improve our results?

  1. Select keywords that are specific and (reasonably) popular. We’ve talked about this in the previous section, but here follows some concrete examples:

    WEAK (TOO GENERAL)

    real estate
    office supplies

    STRONG (MORE SPECIFIC)

    vacation cabins
    toner cartridge

    This second set of terms will pull fewer searches, but they will pull more qualified prospects.

    Sometimes less is more.

    So why didn’t we use the search term “hip scarves” in our experiment? That is a fair question. Here is the answer: because advance research indicated that this term was not popular enough.

    For your campaign to be effective, you must balance specificity with popularity.

    > The term must be POPULAR enough. It has to have enough people searching with it to be worth your while.

    > The term must be SPECIFIC enough. It has to attract enough of the right prospects to achieve a solid clickthrough ratio.

    So how do you check the popularity of a search term?

    After you have selected your term, Google will display a table that estimates the number of impressions that your term will yield per day, per month, and per week.

    How do you check the specificity of your search term?

    Try searching your term in Google, itself, to study the results it produces. Are the sites profiled similar to your site? If the results are too general, you should narrow your focus.

    Here is a quote taken directly from Google’s advertising department:

    “…highly targeted keyword advertising produces, on average, 4 times the industry standard clickthrough rate”

  2. Use part of your search term in your ad’s headline.

    It’s important to recognize that the only reason the consumer ever sees your ad is because they typed in a specific phrase. That phrase is the “trigger” that can earn you a clickthrough. Use it in your headline.

    The sharp reader may be asking, if this is so crucial, then why didn’t we use the word “costume” in our headline?

    We would have, if we could have, but the client did not sell full costumes. We compromised for a term that was specifically relevant and reasonably popular. It worked with a 7% clickthrough ratio.

  3. Give the consumer an appealing reason to click on your ad. This can be in the form of a value statement, such as:

    > Over 25,000 Titles
    > 41 Different Styles
    > 27 Top Name Brands

    It can also be in the form of a direct incentive, such as:

    > Win A $1500 Vacation
    > Get Your Free Sample
    > See the Top 10 Reasons

    Notice the descriptions are specific. Avoid vague modifiers like: large, great, fast. or best. If your claims aren’t quantified, people don’t believe them. (To learn more about writing credible copy see the resource section at the end of this article.)

  4. Use many search terms, and assign each a customized ad.

    The key to success on Google is to “narrowcast” as opposed to “broadcast”. Focus on separate user, but list many. Make your ad feel like a highlighted directory listing. Here is a sample:

    Archery Supplies Here

    Over 35,000 accessories.
    Win a Free Hoyt Bow

    www.acearchery.com

In the final analysis, Google seems to offer a promising opportunity (though it has its problems). If you can score a clickthrough ratio of 7% to 9%, you can achieve a true cost per click of approximately $.17 to $.22. (*4)

If you are bidding on popular terms, this rate can be considerably better than GoTo. But with less popular terms, you will probably find GoTo a better bargain.

It’s about the math.

In today’s marketplace, it is important to design a web offering that yields a substantial lifetime value for each customer.

It does not matter whether you are selling hip scarves or mortgage loans, you have to build in enough value to sustain a growing customer acquisition cost. This is true medicine for the ever prevalent .com mania.

As the German Mathematician, Hermann Weyl states, “You can not apply mathematics as long as words still becloud reality.”

To get help planning your next marketing campaign email: research@marketingexperiments.com

To learn more about writing effective copy, get our feature article: Transparent Marketing – How To Earn The Trust Of A Skeptical Consumer

To read a case history regarding a successful Google Campaign, visit the MarketingSherpa at: http://www.marketingtowebmarketers.com/sample.cfm?contentID=1261

To learn more about how the Google search engine works, visit: http://www.searchenginewatch.com/

To review the dance site, which participated in this test, visit:

The portal – http://www.bhuz.com/
The ezine – http://www.discoverbellydance.com/
The store – http://www.discoverbellydance.net/

Editors Note: We truly appreciate the cooperation of the Discover Group Inc. They are a well-managed operation that has taken full advantage of the Internet’s strategic leverage. They have become the #1 online destination in their community. My sincere thanks to the Company’s President, Ms. Jennifer James-Long.

(1) According to Google, “The higher the ad position, the greater the visibility for your ad. The amount you pay for your ad is dependent on the position in which it is shown. Naturally, the top position is charged at the highest rate ($15 per thousand ads shown) with the positions that follow costing less ($12/ thousand for position 2, $10/ thousand for position 3, and $8/ thousand for positions 4 through 8). Google will show better performing ads higher on the page, as these are most likely to be relevant for our users.”

(2) This number is based on a pure estimate. We think it’s reasonable to project at least a 10% clickthrough if you have the number one search term on GoTo (and a well crafted listing).

(3) For the sake of the example, we have used GoTo’s search volume. Google’s actual volume is 50,800 impressions per month.

(4) We found problems with Google:

  • The server was (often) ponderously slow.
  • In one (informal) test, we refreshed the page 10 times, twice we got the wrong ad, and twice we didn’t get any add at all.
  • Google requires you to build your entire ad before you can check it’s popularity. This can be quite annoying.
  • Google’s two-week estimate for one of our search terms was 2400 impressions. In actuality, we received just 83.

::Back to Section 1::

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