For anyone who is reasonably new to the world of Pay-Per-Click (PPC), let me share a few words of wisdom — if you don’t have an extensive list of negative keywords, you’re probably paying too much for your traffic.

Suspect you might be one of those advertisers who is feeding the Google piggybank? Well, let’s put a stop to that! In this post, you’ll learn what negative keywords are and how you can generate a starter list of negative keywords in no time at all.

So what are negative keywords? Let’s start with an analogy. When you do pay-per-click advertising, it is like throwing a party. You’ve created a guest list of people who are invited to your party (these are your keywords), but you’ve also hired a bouncer to keep out any undesireables (these are your negative keywords).

Here’s an example. Let’s say I offer French lessons. My keyword list likely has a number of keyword variations that users might type into a search engine, like “French lessons”, “private French lessons”, “French language lessons”, and “French language instruction”.

But what if someone types in “private French Horn lessons”? Or “French language instruction online”? Or “French language lessons on DVD”? Without negative keywords, you will be showing your ads to all these types of bad traffic — inadvertently lowering your quality score and overpaying for your traffic as a result.

Now, you’re probably wondering where you get your negative keywords from? Do you have to pluck them out of thin air by sheer ingenuity? Am I going to ask you to brainstorm negative keywords while sitting in the bathtub, or keep a notebook on your bedside so you can think them up as you’re drifting off to sleep? No, no, no — there’s a much easier way!

Here’s what I want you to do. Just as you probably use a keyword tool to help you develop keyword lists, I’d like you to use a keyword tool to develop negative keyword lists. And if you don’t have fancy tools at your disposal, don’t worry — for our purposes, the free keyword tool in your AdWords account will do just fine!

First, you’re going to type one of your keywords into the keyword tool:

Then, scan the list for “bad traffic” terms:

For each “bad” search query on the list, find the offending word in the phrase and add it to your negative keyword list. (Below is a screenshot of adding a negative keyword in AdWords using AdWords Editor, but this works for whatever search engine or interface you happen to be using.)

See how it works? It’s not hard at all really and is well worth the effort.

Good luck and remember — don’t feed the Google piggybank!

So you did everything Google told you to do, but you can’t get your AdWords to talk to your Google Analytics.

This question came our way this week, and it was interesting, because I just went through the same problem myself. So here is some advice.

Problem #1) You want to link AdWords and Analytics, but when you follow their directions, you don’t get an “I already have Analytics” option.

I learned this one the hard way. Because you can only have one AdWords account associated with your GA account (even though you might have multiple Analytics profiles and even be able to look at multiple Analytics accounts), you have to unlink the old AdWords account so you can get the one you really want. However, unlinking is fraught with problems. (Thanks Justin, for teaching this one to me.) In fact, Google even says, if you want to unlink, contact us (use their contact form, they are pretty responsive.)

Problem #2) You successfully linked AdWords and Analytics, but you don’t see your campaigns.

This can be caused by autotagging turned off. You might have your autotagging turned off so that you can tag your AdWords just the way you want, but you have to tag them all. If you want to turn it back on, it is in AdWords, under My Account > Account preferences.

Problem #2a) You successfully linked AdWords and Analytics, you have autotagging turned on, but you still don’t see your campaigns. Or maybe, you see some of them, but not all of them.

When you see some but not all (and you have autotagging turned on), that’s a red flag — you don’t have Google Analytics installed on the landing page. “But wait,” I can hear you say, “I have my Analytics in a file that automatically gets copied to every page on my website.” Yes, I work with a customer like that, and two (count ‘em, one-two) of her campaigns landed on very specific landing page, stripped of all navigation and include files. Hence, stripped of Google Analytics.

Problem #3) No, none of those are the problem. Your account was never linked to another AdWords Account, you have auto-tagging turned on, you have analytics on your landing pages. This was the problem that came to me this week. Finding the problem was real gumshoe work and it was exciting to discover it.

Here’s what happen. I was getting ready to send it to someone on high, but decided to have one last look. I wanted to be sure he had GA on his landing pages. And then I noticed that he did have code installed — but he was running two different Google Analytic accounts. The account that was used from his landing pages was nothing like the account for the rest of his site. (I mean, the numbers, like this: uacct=”UA-10005-8″) So yes, there is a Google Analytics account somewhere, someplace, that is reading the AdWords, but the other account, the main one, can’t see that the clicks are coming from AdWords. And isn’t the whole idea to be able to see it in one place and then make decisions based on your data?

Robbin Steif

Much to my chagrin, I didn’t really discover Negative Exact Match. Example: -[keyword]

In fact, it is called embedded match. (From the Department of Non-Descriptive Names.) The example Google gives is in the entertainment industry — you sell movie merchandise but you don’t own a movie theater or sell DVDs, so you can’t sell the actual movie experience. So you wouldn’t want people to click through to your site (and spend your AdWords money) if they type in just the word Spiderman but you want all the variations, Spiderman tights and Spiderman costume etc.

Robbin Steif
LunaMetrics

Just because this post is about something cool I figured out in Google AdWords doesn’t mean that it’s not about analytics and conversion. (Well, ok, it’s not mostly about analytics and conversion….)

I’m probably not the first person to figure this out, but I definitely stumped “my” Google Ad rep. Here was the issue and the answer, and I will pretend that my company is the customer so that I can use examples.

Issue: If I use a big single head word like analytics and I let Google AdWords use a broad match configuration, the term pulls really well when the searcher uses at least one other word with it. So, for example, if the visitor types in web analytics or analytics consulting or Pittsburgh analytics, the click through and conversion is excellent. You might be thinking, what about when they type in stock analytics or financial analytics? Those don’t matter because I already told Google never to match when the searcher uses stock or financial. You know, negative match.

The problem is, the term doesn’t do very well when someone just types in analytics - it can mean too many things. I could try to find all the phrase matches possible, but I am too lazy for that.

Answer: “So,” I said to the Google AdWords guy, “Can’t I do negative exact match? Like this: -[analytics]. That way, analytics is still a broad match term, just not when it appears alone.”

He looked at me, and he looked at my paper, and he looked at me again. “Well, I guess it should work, theoretically.”

With that I thought, this is ridiculous, I am just going to try it. So I stood there while we talked and added it and AdWords took it. Later I went back and verified that it worked, and that the click throughs and conversions were increasing. I only have a couple days of data right now, but am at a click through rate of 6% for that campaign with no decrease in conversion rate. So I am getting ready to lower the bids.

I learned that I needed the exact negative match by implementing this Google Analytics hack from GA-Experts.

Robbin Steif
LunaMetrics

It’s true. I cheated on Google AdWords so that I could measure A/B Google tests in my Google Analytics.

First, the background. Lots of small websites and advertisers aren’t ready to take the multivariate testing plunge, so start by using Google AdWords to A/B test. This is pretty tried and true: You create two ads for the same AdGroup which are absolutely identical, down to the URL that shows on the Google page (SERP). However, when the customer clicks, each ad has a different landing page. Then the advertiser compares conversion rate (or revenue, or average order size) for all the customers who start with Ad1 vs Ad2.

Admittedly, it has its limitations. Search engines are demographically skewed, and just because it works for Google customers doesn’t mean that it will work on Yahoo. But it’s way better than saying, “I know what will work. I just know.”

Google has recently made measuring different ad versions easier in the AdWords interface, but with Google Analytics, you still have to know how pull down the right menus and segment to see what you need. And even then, if the ads have the same name, you can’t tell them apart.

Step 1: Pulling down the right menus. (I can’t remember whether I learned how to do this from Justin’s GA blog or from ROI’s GA blog, and I can’t find the reference.)

Choose Marketing Optimization > Marketing Campaign Results > Campaign Conversion. Left click on the Analysis Options next to one of your Google AdWord campaigns (which you get with the little red circle to the left of the campaigns - follow the top red arrow in my picture); choose Cross Segment performance (that’s the middle red arrow I’ve drawn); finally, choose Content. When you choose Content, you’ll get a list of the different ads that are running for that campaign, by goal.

Step 2: This is where you cheat: Retitle your ads, ever so slightly. When you are using your Google AdWords to do A/B testing, as described above, the ads are identically worded. Google Analytics lists them out by title, which means, it can’t tell you that Ad1, titled, “Increase your Conversion Rate,” and which lands on www.lunametrics.com , is doing terribly, and that Ad2, titled, “Increase your Conversion Rate,” which lands on www.lunamerics.com/conversionrate, is doing great. It only sees one ad, called “Increase your Conversion Rate.” You can cheat on Google AdWords by changing the titles very very slightly. In this case, I would change one of the ads to have a capital Y in Your, so that it reads, “Increase Your Conversion Rate.” The difference is slight enough that it shouldn’t matter, and will enable you to read the results in GA.

Robbin Steif
LunaMetrics

Recently, someone wrote me and explained that he was launching a new site, and all the advertisers that he was interested in using (except Google) had pay per impression plans. Old fashion advertising, you might call it. That’s the way magazines charge for their ads, and they audit their circulation to prove that they are faithful to their rates.

He did a comparison of pay per impression to pay per click, and then wrote me back:

Let’s say I pay $25 per 1,000 impressions. If spend $500K, I should get 20 million impressions. If I get 4% click through, that is 800,000 users on my site that I may or may not convert to purchasers. If I pay $1.5 per click, I get 333,333 users that may or may not convert. Now, I believe all number to be within the industry standards but as you can see, pay per click looks terrible unattractive. What am I missing?

Since he kept the 4% click through the same for both scenarios, it’s not worth quibbling over what the actual CTR will be (and I mislaid my crystal ball, anyway.) The real issue, I wrote in my reply, was that he was paying too much for the click. At $.625 for a click, the two models are financial identical. (So, I suggested a few ways to decrease his cost per click.)

This leads right into the question, how much do you pay for a click? It’s an easy calculation, but to do it well, you need to understand your profitability, your average order size, and your conversion rate.

Let’s say your widget sells for $100 and has a gross margin of 45%. (I use the word “widget” loosely - you can use this for a service too. Or, scale it up by adding zeros and use the same equations to value PPC bids for your million dollar enterprise software license.) 1.5% of all visits to the site turn into customers, and they purchase, on average, 1.2 widgets when they convert (so the average order size is 1.2*$100 = $120)

To figure your maximum price per click:

Average Order Size x Gross Margin x Conversion Rate = Maximum Price/Click
$120 x 45% x 1.5% = $.81

Explanation: Average order size times gross margin percentage gives you the average gross margin per customer. When you multiply that by the conversion rate, you now have average gross margin per visitor (instead of, per customer). When your average gross margin per visitor is the same as the amount you are paying for each click, you break even. But just.

Robbin Steif
LunaMetrics

Jakob Nielsen is one of the big online usability experts. So I was surprised to read in his blog about pay per click extracting all the profits from a website. First, it seemed out of place and second — I think he’s wrong.

If you don’t want to click through to his blog, here are the basics. Companies pay up to the maximum that their margins permit for pay per click advertising. So, for example, if the product costs $100, the margin is 50%, and 2% of the people who click the ad make the purchase, the vendor can pay $1 per click — 100 clicks = $100, and he will have sold to two people, 2*$50=100. So he makes nothing and loses nothing. (So far, so good, but let’s remember that that is the most the vendor should pay — not the most that he actually does.)

Nielsen then goes on to say that, while you may increase your conversion rate and be able to make some money on the sale, your competition will get better too, ultimately driving up your price per keyword to the exact amount of your margin. He exhorts the audience to rely on alternative methods of driving traffic (and feels that organic search is not to be relied upon, since the engines can and do change the algorithms at any time.)

I was really shocked to read this. The notion that the bidding strategy on a PPC engine is perfect, i.e. your competition will force you up to exactly the price that pulls all the profit out of the sale, is as outdated as the idea that a company sells for a perfect price (the net present value of its future earnings.) Markets aren’t perfect and neither is competition.

Furthermore, Nielsen ignores the lifetime value of a customer. (Catalog companies pay way more than the expected marginal profit because they earn it back later.) If you are sitting there saying, “What lifetime value?” (online buyers are notoriously fickle), you should read this post I wrote last week about the loyalty program Travelocity created to create lifetime value (as heard at shop.org).

Robbin
LunaMetrics

I had a very cool experience integrating web analytics, SEO and pay per click this week. It was pretty textbook – except that we don’t often get to do things “by the book.”

One of my customers runs a continuing education course in the area of spray technology. The range of industries that sends students is truly amazing: from companies who spray chocolate on the inside of ice cream cone drumsticks to automakers whose fuel injected engines spray out the fuel.

This week, I sat down with four months of analytics. They aren’t fancy/expensive analytics, but for a ten-page spray technology website, they do the job. I learned that, due to the vast range of industries sending students, keyword searches are rarely duplicated. One person will type in “Electrospray painting” and the next visitor types in “Aerosol medication.” (Bet you never thought that the way inhalers deposit asthma medication was related to the way that automakers deposit painting on a car. But I digress.) I did find one or two words that were often included within keyword phrases and which will make excellent candidates for a broad search pay per click campaign.

I took every single keyword phrase and ran it through Web Position Gold, which shows how the site ranks for a particular keyword phrase. I only chose to see rankings on Google, MSN and Yahoo. I learned that I had a couple of Page One rankings, such as “spray atomizer design” but that most of my search terms were on Page Two, Page Three, or later. You might reasonably ask, if a term is buried that deeply, how did someone get to the site using it? There are various answers, but the best one is, they didn’t necessarily use one of the engines I measured, and not all search engines rank the same way.

Then, I took the site and ran it through a keyword density analyzer to see how the on-page and off-page content match (or don’t match) preferred keywords. While the one-word occurrences weren’t that interesting (who cares that I used the phrase “need” twice?), the two- and three-word occurrences were very helpful. For example, I found that I had succeeded in using the phrase “Spray technology” five times on the home page, counting the page title and description, but only twice on the “What you will learn page.”

Next, I opened up my Macromedia Contribute (and if you don’t have it and wish you could make changes to a site that someone else designed for you, I strongly recommend that you fork over the $149, or at least download their 30 day free trial.) I went through each page and everywhere that I could reasonably add the one or two words that were embedded in many of the keyword searches, I did. I was only able to make a handful of additions, but they may move us out of Position 19 into Position 9, since there aren’t that many people fighting for phrases like “rheology” or “non-Newtonian liquids.”

Finally, having

• used my web analytics to learn what phrases customers care about
• used Web Position Gold to learn where the site ranks in the organic search for the phrases
• used a keyword density analyzer to learn what words potential customers are currently typing
• used Macromedia Contribute to better optimize my site

…I sat down to use Keyword Trellian (or, if you like, the free Overture tool) to decide which keywords were worth paying for.

Neat, huh?

Robbin
LunaMetrics

I have about four Internet books in my pile of “to be read.” Plus, this past weekend was my birthday (no, I am not telling how old) and I received a few more great Internet reads. Winning Results with Google AdWords by Andrew Goodman was the one that I looked forward to the most, and I was disappointed.

Granted, it’s a tough topic, especially now that Google keeps adding new features to AdWords (I found myself looking for the copyright date in the book more than once.) Furthermore, the Big G doesn’t tell all (or even close to all), so Goodman should probably be forgiven for not answering some of my questions. For example, he probably has no idea how Google chooses to serve up one ad versus the other if they are identical AdWords in my account but are in different campaigns.

And, in the spirit of not dissing the guy and the book altogether, I really did pick up some nuggets of information. He also does an excellent job of tailoring the book to small business.

I think I was mostly disappointed because he contradicted himself so often. For example, first he pointed out that doing Google A/B ad testing is not that smart. Then, he did many pages on how to do A/B testing. Similarly, he talked about reviving dead keywords and first said, don’t clean them out and put them in a different campaign. Later he wrote, clean them out and put them in a different campaign. Or, Google now does stemming, he writes. But be sure to include stems in your campaign, like plurals and past tenses.

I’ll bet there were no real contradictions. He probably meant, Google tries to do stemming, but if you really want the “ing”, the plurals, the past tenses, be sure to create them for yourself.

Wouldn’t it have been nice if he had just said that?

Robbin
LunaMetrics