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Measuring a Text Ad's Effectiveness

szetela-david
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Last week, I described methods for comparing relative performance of keywords in an ad group. This week, you'll learn how to compare the effectiveness of text ads in your PPC campaigns.

Testing and improving ad copy is essential to optimizing overall PPC campaign performance. Improving ad text leads to better CTR and quality score, which means it can help drive your CPC down, and/or let you buy more clicks per dollar. So it has a direct impact on your campaign's ability to increase the number of profitable sales.

Furthermore, testing different ad messages can help you fine-tune the messages visitors see on your PPC landing pages -- helping you improve conversion rates even further.

Next week I'll start describing the many messages and elements you can, and should, test in your ads. But first, it's important for you to understand the valid ways to measure and compare ad performance.

I'll start with a pet peeve: every article I've seen that discusses ad performance comparison fails to include key pieces of the puzzle: the keyword list and the landing page. Two test ads don't operate in isolation -- their relative performance depends heavily on the keywords in the ad group.

The following example illustrates this. I'll compare two ads, A and B below, based on the keyword list below them.

Here's ad version A:

Industrial Widgets
Top Widgets for Industrial
Use. Fast, FREE Shipping!
WidgetsRUS.com/Industrial+Widgets

And here's ad version B:

Green Widgets
Durable, Earth-friendly.
Fast, FREE Shipping!
WidgetsRUS.com/Green+Widgets

And here's the set of keywords in the ad group:

green widgets
industrial widgets
cheap industrial widgets
environmental widgets
red widget
office widgets
ecological widgets
widgets on sale
widgets for factory use
low-priced widgets

Here's the performance data for ads A and B:

Assume that the landing page for this ad contains multiple design elements -- graphics and words -- whose main message is that Widgets "R" Us features industrial widgets at lower prices than its competitors. Assume also that the target maximum cost per conversion is $9.00, and that the campaign needs to be managed tightly to that number.

So what does the performance data show us? On the surface, it seems ad A is the clear "winner." Its CTR, 8.19%, is significantly higher than ad B's 5.48%. Furthermore, ad A's cost per conversion is lower than the target $9.00, while average cost per conversion for ad B is almost $4.00 more than the target.

But don't jump to the conclusion that ad B is inferior and should be paused or deleted. If you've been following previous installments of this column, you've probably spotted the obvious flaw in this ad group: the keywords are not as closely-related to each other as they should be. Two very different concepts are included in the keyword list and ad text: environmental friendliness and price/use.

The correct course of action is not to simply shut off the "loser" ad, but to split the ad group into two smaller, more-targeted groups -- with keywords and ads that are much more closely-related to each other than in the original ad group. And as I'll discuss in a future column, you can further improve conversion rate by creating a different landing page for each ad group.

For the next example, let's assume that a new ad group has been created, whose theme is "Industrial Widgets." Here's ad version C:

Industrial Widgets
Get Factory-tough Widgets
Now. Fast, FREE Shipping!
WidgetsRUS.com/Industrial+Widgets

And here's ad version D:

Industrial Widgets
Top Widgets for Industrial
Use. Fast, FREE Shipping!
WidgetsRUS.com/Industrial+Widgets

And here's the set of keywords in the ad group:

industrial widgets
cheap industrial widgets
office widgets
widgets for factory use

And finally, here's the performance data for ads C and D:

Which ad's the "winner?" I'll pick up this discussion next Monday and provide you with a new tool for comparing ad performance -- especially important when the performance data is mixed -- as in the example above, where one ad exhibits better CTR but worse conversion rate. Until then, let me know your comments and questions via the feedback form below.

Listen to David sharing his PPC tips in a live Search Engine Watch Webcast, "Profitable PPC: The Fundamental Secrets," on October 22, 2008.


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