An Easy-To Follow Method For Ad Optimization & Testing

21 Apr

Apr 20, 2011 at 5:49pm ET by Crosby Grant

Most of us in the PPC world know that testing ads is a great idea – almost necessary optimization work. There are plenty of articles around the web expounding the benefits: increase QS, lower costs, boost conversion rate … all good stuff.

In this article, let’s tackle the basic block and tackling necessary to get ad testing up and working for you.

AdWords Ad Optimization

What Ad Is Better?

With ads, as with keywords, this is not always black-and-white. There are many metrics we can measure, but which should we focus on? What is better — Higher CTR or higher conversion rate? More Revenue or more margin? Higher QS or lower costs? It is possible to have really high CTR ad that costs you a ton of clicks without making sales, and vice-versa.

No simple answers here – every business is different. Let’s cover some basics and agree on some optimization parameters just so we have something interesting to talk about in the rest of the article.

Let’s consider an ad that reads something like: “Free dvd’s, porn downloads, and Myley Cyrus’ phone number.” You are definitely going to get a lot of clicks! Your widget sales at ACME company might not do so well though.

On the other hand, we could have an ad that reads something like: “Do not click here unless you want to pay $100 for a widget and have your credit card in your hand.”

You can imagine we will not get many clicks relative to the other ad. We would expect a higher conversion rate than normal for those who actually do click-through though. So we’ve got the “free dvd” ad that gets high CTR and low conversion rate, and the “don’t click” ad that gets low CTR and high conversion rates.

A third kind of ad might be the “what is that?” ad. It might read: “We are something-you-didn’t-search-for experts. Great shipping!” and it points to the homepage.

This ad might perform better than both of the above ads overall, but its notable characteristic is that it is untargeted and points to an untargeted landing page. So what do we optimize for? What is that “overall” metric?

For this article, let’s settle on one. We will use Margin. That is: (Advertising Revenue – Advertising Costs) / Advertising Revenue. At the end of the day, it is often the money in your pocket that matters.

By the way, the same techniques work regardless of what metric you choose to optimize on, but for the sake of clarity, we are going to stick with margin for this article.

AdWords “Optimize” Option

There is a Campaign setting called “Ad Rotation.” It is located near the bottom, in a section called “Advanced Settings,” then “Ad delivery: Ad rotation, frequency capping.” You may need to click “edit” to reveal the options. The options are:

  • Optimize for clicks: Show ads expected to provide more clicks
  • Optimize for conversions: Show ads expected to provide more conversions
  • Rotate: Show ads more evenly

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