AdWords Tip: How to Boost Your Quality Score (in 24 Hours)

Yesterday, I helped one of our Marketing Breakthrough members clean up his AdWords account.  Together, we ran some reports and quickly saw that some of the keywords had low Quality Scores.  It didn’t take us long to see what the problem was by looking at the Keyword Status and within 24-hours we improved many keywords from a 5/10 to a 7/10 Quality Score.
 
Want to know how we did this?  It was only about 15-minutes of work and is sure to have a big impact on the campaign performance the rest of the month.
 
First, let’s get up to speed on Quality Score…

 

What is the AdWords Quality Score

The best way to think about the AdWords Quality Score is that it’s Google’s grade for your ad campaign.  If Google thinks your ads are not set up properly, then you’ll get a low grade of 1-3 out of 10.  If your ads are above average, then you’ll get a grade of 7, 8, 9, or even a perfect 10/10.
 
Your grade is then multiplied by your bid to determine your Ad Rank.  So a higher Quality Score leads to a higher Ad Rank, which means you’ll be ranked higher on the page.  If you do the math, you can also see that you don’t need to bid as high as your competitors to outrank them if you have a higher quality score.  For example, if you have a 10/10 quality score while bidding $2, and your competitor has a 5/10 quality score bidding $3, then you’ll outrank your competitor.
 

(10 QS) x ($2 bid) = 20 Ad Rank
(5 QS) x ($3 bid) = 15 Ad Rank

 

Again, the higher the Ad Rank, the better ad position you’ll have in the search results.  So in this example, a $2 bid would outrank a $3 bid.  Clearly, quality score is a huge leverage point in any AdWords campaign and that’s why it was the focus of my call yesterday.
 

How to Check Your Quality Scores

To check your current keyword quality scores, go to the Keywords tab in your AdWords account.  Under the “Status” column, you’ll most likely see “Eligible” along with an icon that looks like a speech bubble.  Click on the speech bubble and you’ll see your quality score, along with information about your expected click through rate, ad relevance, and landing page experience.  All three of those factors are ranked as “average,” “above average,” or the dreaded “below average.”
 
You can also check quality scores by adding the Quality Score Column to your AdWords report, but you won’t see the grades for the three factors above.
 

How We Improved Quality Scores in 24-Hours

When I reviewed the keyword quality score information with my client, we noticed some of the keywords had below average ad relevance. The click through rate and landing page experience were both average, but the ad relevance was dragging us down.
 
Ah ha! We identify an easy problem to fix.
 
If you find yourself in this situation, then navigate over to the Ads tab in your account to draft new ads.  In the new ads, include the keyword you’re targeting in the ad group.  Now, if your ad group has many different phrases, then you have another problem on your hands.  I recommend you restructure your account so only similar phrased keywords are in a single ad group.  That will allow you to match the ads precisely to the keywords.
 
As I mentioned earlier, by simply drafting ads that included the keyword, we were able to improve our keyword quality scores overnight!  Take a look at your keyword quality scores and follow these steps if you also have below average ad relevance.

AdWords Quality Score: Love it or Hate it?

 

Use AdWords Quality Score to Improve All of Your Marketing Channels 


I receive a lot of questions and complaints about the infamous Google AdWords Quality Score.  Even if you've never advertised in AdWords, chances are pretty good that you've heard of the quality score.

It's essentially Google's measure of the quality of your ad campaign on a scale from 1 - 10.  This little score can have a huge impact because Google uses it to determine where your ads will rank versus your competitors, and how much you'll end up paying for those ads.  A low quality score means your ad will be be ranked lower and you'll pay more than your competitors.  A high quality score means your ad will be ranked higher and you'll pay less.

There's a lot of confusion and frustration surrounding the Quality Score and I don't talk to many people who like it very much.  But I actually love it.

So in this article I'm going to go against the grain.  I hope by the end I'll convince you that Google's Quality Score is really your best friend, and you should use the Quality Score best practices to set up and optimize any marketing channel.

Every Marketing Channel Has a Quality Score

If you think about it, every marketing channel has a quality score.  It's just not visible in your reports and it's not used in the ad ranking algorithm like in Google AdWords.  But it's still there and it affects your ad performance just the same.

For example, what happens if you write generic ads that don't resonate with your prospects?  Well you won't get too much traffic, which means you won't get too many sales, which means you won't be able to afford to reinvest as much in the ad campaign, which means your ads will lose out to your competitors.  In other words, low quality ads inevitably lead to lower ad rank because you won't be generating as many sales as your competitors.

Let's look at one more example.  Now let's say you have a compelling ad that tons of prospects are clicking on, but your website is a bit disorganized and hard to navigate.   Again, you're not going to generate many sales, which means you won't be able to reinvest in the ad campaign, which means your competitors will eventually out-bid you.  Same result as before with the poorly written ads.

So even though other channels do not have a formal quality score, the results will tend to be the same. If you're not following best practices, then you'll eventually lose out to your competitors.

3 Quality Score Best Practices to Improve All of Your Marketing

The Google AdWords Quality Score can be broken down into 3 key areas:

1. Ad Relevance
2. Ad click through rate
3. Landing page experience

And you can use each of these best practices for ALL of your marketing channels (not just Google AdWords).

1. Ad Relevance

This is basic marketing 101, which is to match your message to the market.  In an AdWords search campaign, that means to use the keyword you're targeting in the ad copy.  If you're advertising on the keyword "couples massage" then your ad should probably mention "couples massage" so that you're matching the market. Pretty simple right?

Now take a look at some of your other marketing campaigns like SEO, email, and social media.  What is your Ad Relevance score?  Is your message hitting the market's need?

2. Ad Click Through Rate

The ad click through rate, or CTR, is the measure of how many times your ad is clicked compared to how many times your prospects saw the ad.  For example, if your ad was displayed 100 times and 2 people clicked on it, then you would have a 2% CTR.

As you can see, CTR is simply a measure of how well your ad copy and offer resonates with your prospects.  A low CTR tells you your prospects do not like your ad copy and offer.  Don't take it personally and don't throw in the towel. To be successful you're going to have to test a lot of different ads and offers in order to find the best combinations.  Use CTR as one of your measuring sticks to improve your campaign performance.

3. Landing Page Experience

Finally, one of the most important elements of a successful marketing campaign is congruence.  By that I mean a congruent message from the ad copy to the landing page, all the way through to the sale.  More recently, this also means a congruent message across devices like tablets, mobile devices, and computers. If you do not have a congruent message, then your prospects will likely jump out of the sales path before making a purchase.

The other two factors in your landing page quality score are transparency and easy navigation.  These should really go without saying.  Every business needs to be as transparent as possible online. Everyone (including myself) is hesitant to make online purchases for fear of getting ripped off.  So anything you can do to ease that fear, the better.  And if you don't make it easy for prospects to navigate your website, then how do you expect them to contact you or complete a purchase?

So did I convince you that the Google AdWords Quality Score is really your best friend to improve all of your marketing?

Hacking Quality Score: How One Advertiser Got A Quality Score Of 8.8/10

I believe that Quality Score is so critical to PPC success. To illustrate the point in a more concrete way, I want to present a detailed case study of a WordStream client that is absolutely crushing its AdWords Quality Score. In this case study, I’ll reveal exactly how they did it, and how much they’ve gained from their efforts.

Average Quality Score Of 8.8/10? What? How!

The advertiser in this case study is a small business operating in the insurance industry (I’ve anonymized the data to protect client identity), which happens to be one of the most competitive verticals in PPC. A skeptic might suggest that the situation is pretty hopeless, without chance of success.
But the truth is far from it! In fact, this AdWords advertiser is thriving! Take a look here:

Figure A: This advertiser’s Quality Score rocks!

Figure A shows a graph of the advertiser’s Quality Score distribution. The green bars on the graph show that all of the  keyword impressions in the advertiser’s account are being accrued to keywords with perfect Quality Scores of 10/10 or 7/10, for an impression-weighted average Quality Score of 8.8/10!
To give you a better sense of just how great this is, the yellow curve on the figure shows the typical Quality Score distribution based on some internal WordStream best practices that we’ve developed. From that, you can see that it’s quite rare to have such high percentages of perfect 10 Quality Score keywords and no low Quality Score keywords in an account.
So how the heck did they do it?

Quality Score Is Just Normalized Click-Through Rate

In a previous article, I showed how having a high click-through rate (CTR) relative to Google’s expected CTR for your ad position is the key for having high Quality Scores. Thus, you’d expect an advertiser with super-high Quality Scores to have decent click-through rates. This is indeed the case, as you can see in Figure B.

Figure B: High CTR = High Quality Scores

Above, I’ve graphed the CTR versus the average ad position for the advertiser’s top 200 keywords (those with the most impressions). Notice how this advertiser’s click-through rates are off the charts!
To give you a sense of how amazing these click-through rates are, the tiny little yellow curve on the bottom of the chart shows you what a typical CTR would be for a given ad position — again, based on internal best practices developed at WordStream. Also note that the advertiser’s overall average CTR from search is a whopping 14.06%, despite being in a relatively low average position of 2.88.
The reason for the high Quality Scores is straightforward: the advertiser has very high average click-through rates vs. what Google expects to see.
The real question here is: How do you get a 14.06% CTR in an average position of 2.88?
Most of the outlier keywords with CTRs of 30%, 40%, 50% and even 70% are branded keywords, which generally have very high CTRs — but the rest of the keywords aren’t. It’s interesting to note that there are even keywords with 0% CTR which have perfect Quality Scores of 10/10. It’s almost like the high account average CTR is pulling up the Quality Scores for all keywords in the account. I see this in a lot of accounts, and it’s one reason why I always advocate budgeting at least 15% of your PPC budget toward branded keywords.
But, what about all the other keywords with high CTRs? How the heck do they do that? Is there a secret computer glitch in the AdWords system that can be exploited?

This Advertiser Earned His High Quality Scores!

The first thing I notice when looking over this account is that this advertiser is no lazy bum! His amazing Quality Scores weren’t the result of some computer glitch, but rather of diligent, smart PPC optimization work. He’s in his account at least once a week for half an hour or so actually optimizing stuff. Take a look here:

Figure C: Slow and steady wins the race – ongoing PPC optimization is key to success

The figure above was created by looking at the change history logs in AdWords, from which I can ascertain what (if anything) is actually happening in the account. Notice how, in the last month, this small business advertiser has diligently created 10 new ads, tried out 164 new keywords, and added 4 new ad groups. Furthermore, by looking at the 90-day change history numbers, you can see that the advertiser’s optimization activities are consistent over time — definitely a key habit for solving the Quality Score mystery.
It’s also worth noting that even with his amazing Quality Scores of 8.8, he’s not resting on his laurels — he’s still in his account every week, optimizing stuff! This is an attitude that I’ve found to be common among PPC marketers with high Quality Scores.
Okay, so now we know that to get good Quality Scores, you have to do some optimization work. But you’re probably still wondering what exactly the advertiser is optimizing! Let’s first take a look at his keywords.

Focus On Long Tail Keywords

In order to get double digit CTRs, you’ll need to be a little picky in choosing your keywords, especially in a super competitive vertical like insurance. How picky? Take a look here.

Figure D: To get double digit CTRs, you’ll need to be a little picky in choosing your keywords

In the preceding chart, I analyzed the account’s keywords to see what percentage of impressions are being attributed to keywords with one word (e.g., “insurance,” which is hopelessly broad and unspecific) versus long tail keywords with 3 or more words (e.g., “boston motorcycle insurance,” which is far more relevant and specific). Notice how a whopping 82% of this advertiser’s keyword impressions are being attributed to long tail keywords? This is a key to achieving double digit CTRs.
Being picky is more than just picking specific keywords; you also need to eliminate junk search queries using negative keywords. But, do negative keywords impact Quality Score?

According To Google, Negative Keywords Do Not Impact Quality Score

The official word from Google is that using negative keywords do not impact Quality Score; however, I’m not so sure about that. I can assure you that smart usage of negative keywords will most certainly raise your CTR — and higher CTR almost always leads to higher Quality Score. (It will also improve your ROI!) Let’s take a look at this advertiser’s use of negative keywords:

Figure E: Do negative keywords raise Quality Score? The Goog says no, but this advertiser swears by it.
Regardless, it certainly raises CTR and improves ROI.

You can see that negative keyword optimization is probably the advertiser’s most favored PPC optimization method, having added around 100 negative keywords in the last month and around 200 in the last quarter. Like weeding a garden, negative keyword optimization is an important ongoing task!
The combination of targeted keywords and specific negative keywords is a very powerful combination. Notice how, in the following figure, you can see that the advertiser’s average impression share across the entire account (on a budget weighted basis) is 89%!

Figure F: Being picky with keywords means capturing a high impression share of a more narrow portfolio of keywords.

This is pretty much as high an impression share as you’ll ever get, since Google never monetizes 100% of any keyword search. Since there are billions of insurance searches every month, and it would cost too much to buy them all, your keyword targeting strategy should involve being picky and capturing a high impression share of a narrow portfolio of keywords, as opposed to targeting broader keywords and capturing a lower impression share.

Ad Text Optimization

The next step to getting high CTRs is matching those “golden” keywords with killer ads — and to do ad text optimization, as this advertiser has clearly done:

Figure G: This small business advertiser has 100 ads!

Above, you can see that even this small business advertiser has over 100 active ads in his account, which is relatively high for a small account.

Leveraging PPC Best Practices

Finally, a quick scan of the account shows that the advertiser is leveraging all the various AdWords best practices like ad extensions, advanced match types, etc. While this may seem obvious to advanced PPC marketers, adoption of many of these features is quite low — for example, only about half of small businesses have conversion tracking turned on!

Figure H: A quick check of PPC best practices!

The Benefits Of Quality Score

I’ve previously discussed the benefits of having a high Quality Score, but how does the theory align with the reality of this case study?
This particular advertiser was previously spending around $1,000/month on PPC and is now spending about half that much. His CPC is roughly half the industry average. His average CPA is approximately $12. What’s not to love here?

This Could Be Your Quality Score, Too

Hopefully in this article today, I’ve convinced you that “hacking” AdWords Quality Score amounts to doing some smart PPC optimization work, with the proper expectation that it’s going to take some time to figure it out. So, what the heck are you waiting for?

Quality Score Explained by former Google Employee

With the continuing expansion of ad space at the top of the page (from ad extensions like sitelinks with descriptions), it’s more important than ever to make sure your ads have a great ad rank. But CPCs are on the rise – so unless you can improve your conversion rate so you can increase bids, Quality Score (QS) optimization may be your only way to maintain a high rank without breaking the bank.
While I’ve been a panelist representing Google in Quality Score sessions at more conferences than I can remember, I’ve been meaning to put together some of my insights on the topic for a broader audience. So, here goes….

The Evolution Of Quality Score

Even if you don’t care much for a history lesson, it may help paint a picture of why QS exists in the first place, and the evolution of factors may give you some insight into what Google cares about.
When I started working at Google in 2002, Quality Score didn’t exist. But what set Google apart from the other PPC ad systems at the time was how they determined if ads were relevant enough to warrant an impression. In addition to having a team of humans reviewing all ads, the system was also monitoring the click-through rate (CTR) of every keyword — if a keyword’s CTR fell below 0.5%, it would become disabled for poor relevance. Google was using the wisdom of the crowds to let its users determine which ads should show and which shouldn’t.
The problem with disabling keywords at an arbitrary CTR level was that advertisers were unhappy to see some of their keywords disabled forever (unless, of course, they knew of the workaround to resubmit the same keyword with different capitalization). So, we started to evolve the system. Instead of disabling keywords, we came up with new statuses like “slowed,” “in trial” and “on hold.”
The idea was to give advertisers a way to fix low-relevance keywords by giving them a small allowance to run ads that were considered poor quality so that they might prove otherwise. We also gave the system more flexibility so there wasn’t a hard cutoff at the 0.5% CTR level. Ultimately, though, most advertisers still saw keywords they really wanted to advertise on get disabled, and they remained displeased.
Google addressed this with the introduction of the minimum bid. Rather than flat out disabling keywords, they asked advertisers to pay more for keywords that had low relevance — the idea being that eventually, it would make no sense for an advertiser to keep paying the high cost-per-click (CPC), and they’d either optimize the relevance or delete the keyword.
In today’s system, the minimum bid has been engulfed by the first page bid, which also takes into account competition. It’s a little harder to see the direct correlation between what you pay and the quality score, but the connection’s definitely there.
Below is an example of where we see the correlation between the average CPC and the QS in our Quality Score Tracker tool.

As the Quality Score starts to increase, the average CPC in this campaign starts to drop.

Quality Score’s Impact On Ad Rank

When Google launched AdWords Select and started to shift from CPM-based pricing to CPC-based pricing, they couldn’t afford to lose all the revenue from their CPM program (which was called AdWords at the time). They were still a pretty small company, and Yahoo/Overture was a formidable competitor. So, to ensure revenue was maximized, they ranked ads in the CPC program according to a very simple rule:
Ad Rank = Max CPC * CTR
If you take a minute to look at this more closely, you’ll quickly see that ad rank is, in fact, equal to CPM or dollars-per-impression. This was the simple but brilliant insight that made AdWords so powerful — advertisers only had to pay when they got clicks, users would see more relevant ads because ads with high CTRs were more likely to appear high in the results, and Google was making as much money as possible from these ads.
The equation for ad rank is a whole lot more complicated these days and now includes thresholds for appearing at the top of the page, landing page factors, and more. But at the heart of it, the original principle still applies: if Google can show more relevant ads, they will get more clicks, have happier users and make more money. And, the key component for achieving this is CTR.
The importance of CTR to Quality Score is a bit like the importance of TF-IDF to SEO. While there are hundreds of factors that go into ranking in paid or organic search, these long-established principles are still some of the most important ones. In the 80/20 rule, these are your 80 percent factors and the first ones you should pay attention to.

Factors Of QS

While I’ve explained that CTR is a main driver in QS, it’s useful to understand how Google thinks about CTR. After all, there are many things that influence the CTR you see in your account such as the device, the network, or the position of your ad on the page. Thus, the average CTR you see in your account is not the CTR Google uses to determine Quality Score.
To make sure advertisers have a level playing field, they evaluate small slices of CTR.
For example, they look at different CTRs by device type so that your performance on mobile won’t affect your performance on desktops. They also have a different CTR they look at for the Display Network and Google Search — a good thing, since CTR on Display is usually much lower, and you wouldn’t want that to hurt your QS for search.
Where possible, they also favor looking at the CTR when the keyword in your account matches the search query exactly (don’t confuse this with the “exact match” keyword match type), and they normalize the CTR based on the number of ads on the page and your ad’s position amongst them.
Furthermore, Google has to make some guesses before they have a statistically significant amount of CTR data for new accounts, new keywords and new ads, and they do this by evaluating the CTR at different levels as explained in the diagram below.

The various levels at which Google evaluates CTR to determine Quality Score.

As you can see, there are 3 levels of CTR evaluation: the account, the keyword and the ad. These CTR elements are all combined into a secret formula and out comes your keyword-level Quality Score and the corresponding number between 1 and 10 that you can see in your account.

How Quality Score Is Set For New Keywords

When a keyword is new in an account, there is not a strong historical element for how the keyword performs with its ad text (factor 3), so the QS is mostly based on system-wide data for that keyword in all other accounts. That gets combined with data for how this particular account and its ads have performed historically. If these elements have good QS, the new keyword is likely to also start off with a better QS.
To give an example, if you have 2 accounts, you should see a lower starting min bid in the account with the better account-level QS. If you have 2 domains, you will see a lower starting min bid when using the domain that has a better QS.
After the system gets enough data about more specific things, like how the keyword performs with the ad you wrote for it, it will rely much more on this to determine the Quality Score. This is why it’s so important to have great account structure and split up your ad groups in a way that allows you to create great performing ad texts for each grouping of tightly related keywords.

Other Relevance Factors

According to Hal Varian, Google’s Chief Economist, QS also considers “relevance” in addition to CTR. But what does that mean? The easiest way to think about this is once again based on click-through rate — but, rather than using CTR to generate the QS number between 1 and 10 that you see for each keyword in your account, it’s used at the time a user does a search to determine if there are any correlations between that user’s search and your ad that could predict the CTR (Google’s Quality Score is a predictive system that tries to predict CTR for each ad and each query). Some examples:

1. Did the user’s search include some additional words, and do those correlate with your ad’s expected chance of getting clicked? E.g., if you have a job website and want to advertise on the keyword [jobs], your ad is probably not relevant when someone searches for “Steve Jobs.”
2. Does the location of the user have any correlation to your predicted CTR? E.g., if your business is in the US and the searcher is in Belgium, perhaps it’s less likely your ad will get the click because the users may prefer a business closer to them.
3. Does the time or day of week influence your predicted CTR? E.g., Google may know that users are less likely to click on your ad on a Tuesday.

These factors let Google assign you a real-time quality score which they can use to better rank your ad for that particular query. There could be many other “relevance factors,” but just know they’re all based on the same principle of trying to predict the likelihood of your ad getting a click based on something Google knows about that specific query.
While the lack of transparency into the factors may be annoying, this relevance component has helped advertisers by automatically giving them more good clicks and fewer bad ones.

Landing Page Quality Score

The landing page is one of the newer factors used for QS. Landing Page Quality (LPQ) started as a way to counteract bad sites that duped users into clicking their ads and hence had a good CTR but a lousy user experience. Now that LPQ can also improve your QS, it’s getting a lot more attention from advertisers (probably more than it warrants).
Remember, the CTR of your ads is still the bigger QS factor and probably the better thing for most advertisers to focus on optimizing. Every now and then, I hear of advertisers who are spending a ton of time creating one landing page per keyword so that the keyword will appear on the page and score a better LPQ. That’s probably overkill — Google is very good at understanding how words are related, so it’s unnecessary to include every variation on the page.
My personal recommendation is to also keep a close eye on bounce rates and time on site, two metrics you can see directly in AdWords when you link it with Analytics. A high bounce rate or very short time on site both provide a great way for you to find keywords that are not relevant in the minds of users.

Optimizing The Right Elements Of Your Account

If you haven’t guessed by now, optimizing Quality Score is really all about optimizing for CTR. The challenge is to optimize for the right CTR. For example, because Google uses position normalization when determining how your CTR impacts your QS, it could very well be that your ad with a 15% CTR in the top position on Google is actually worse than your 3% CTR ad in the last place on the right side of the page.
You should also look at the impression-weighted Quality Score to determine which keywords and ad groups are most in need of an optimization. I shared a script for automating the calculation with AdWords Scripts.

The Most Important KPI For A Performance Marketer

Many performance marketers continue to consider click-through rate (CTR) as a key performance indicator of their search campaigns’ effectiveness and evolve their PPC optimization strategy around that.
At the end of the day, what matters most is achieving the best ROI given your business objectives and budget, and you might optimize directly to CTR or ROI or a combination of success metrics to achieve that.
In order to have the best optimization strategy for your SEM campaigns, it is important to understand and quantify the influencers of ROI.

The Two Extreme Optimization Strategies

There are two types of strategies performance marketers consistently use as their campaign optimization strategy:
1)    Optimizing To A CTR Goal
One of the main factors influencing Quality Score (QS) is CTR, which affects your cost-per-click (CPC) and in turn affects your ROI. An increase in QS due to a boost in CTR would lower CPC and improve ROI.

2)  Optimizing To An ROI Goal (Revenue-Per-Click & Cost-Per-Click)
Direct optimization to revenue or a conversion metric is a common strategy amongst performance marketers. Making sure an intelligent bid management is in use will be crucial to your campaign’s success.

While perhaps no marketer purely optimizes to CTR or ROI, they tend to skew towards one of these camps. Each method has its pros and cons. A CTR strategy will get you more clicks but does not guarantee the highest ROI. A purely ROI approach will get you the highest ROI but you potentially lose out on customers early in the sales funnel who might eventually convert.

ROI Breakdown

ROI equals Revenue-Per-Click (RPC) over Cost-Per-Click (CPC). Data analyzed from over two dozen advertisers using econometric methods (a simplified version of the equation is shown below) shows that 34% of ROI is influenced by RPC and 66% by CPC.
Bid management is by far the most important influencer of ROI. Forty-nine percent (49%) of ROI is influenced by bid management, 13% by other factors (i.e., marketplace, seasonality, etc.), and 4% by CTR. The data show the importance of having an intelligent bid management strategy in place for your SEM campaigns. But, does this mean a CTR maximizing strategy is a wasted effort?

A Deeper Dive Into The Relationship Between ROI & CTR

Previous studies have looked at the relationship between CTR & ROI by purely relying on correlations. A correlation analysis alone cannot determine the effects of CTR on ROI, and a more robust statistical technique is required to answer that question. These techniques enable us to control for all the factors that can potentially influence ROI.
From the chart below, we do see a relationship between the CTR & ROI — but not a very strong one.


Applying statistical modeling techniques will allow us to quantify any statistically significant relationship between the two if it exists.
In this model, I control for position, CPC, industry, and bid management differences across the different advertisers in the data in addition to CTR.
The results show that there is a statistically significant relationship between CTR and ROI; but in terms of impact, it’s quite small. For a 10% increase in CTR, expect to see a 1.2% increase in ROI. This means that if you increase your CTR from 10% to 11% for a campaign with an average ROI of $5, the ROI will increase to $5.06 due to the improvements made in CTR.

Key Takeaways For Performance Marketers

• Campaign managers should utilize both strategies above in optimizing their campaigns; main focus should be on ROI but do not completely ignore CTR
• 49% of ROI is influenced by bid management; intelligent bidding is integral to a campaign’s success
• CTR does have a small but statistically significant impact on ROI; a 10% change in CTR affects ROI by 1.2%

In Summary

Focus on optimizing your SEM campaigns for ROI but keep an eye on CTR. There is no need to purely optimize to CTR as it influences only 4% of ROI; but, it is important to account for it in your longer term strategy and make sure healthy CTR rates are met and maintained.
Intelligent bid management heavily influences ROI and is absolutely necessary to ensure your ROI goals are met.

Quality Score vs Page Rank

Is Quality Score in PPC Adwords (or Yahoo Index in Yahoo Search) simillar to Page Rank in SEO… Lets find out!
The article includes points of similarity on two important Algorithm metrics in Search Engine Marketing World (PPC + SEO). The list is not final as there is more, which needs to be included, but I’ve tried to highlight dots that could be a part of our initial point of understanding / learning / conversation.