Digital Marketing Measurement

Archive for the category “Uncategorized”

KPIs and IAB Social Media Measurement Framework

Today I would like to talk about an important marketing concept I have referred to here and there in previous posts, but not yet directly addressed: KPIs (Key Performance Indicators).

KPIs essentially define a set of values to measure performance in relation to defined goals. They need to be understandable (clear, unambiguous), meaningful (really representing what is important to evaluate success) and measurable.

In the context of digital marketing, a popular framework used for the definition of KPIs is the one developed by IAB, which refers, in particular, to social media measurement.

Here’s a brief overview on how it is structured:

I (Intent) – In order to identify what KPIs are most pertinent for your business/project/activity, the first step is to establish your intentions and clearly define your goals/objectives.

A (Awareness, Appreciation, Action, Advocacy) – It is important to group your KPIs in meaningful categories, in order to represent the bigger picture. Depending on your original intent, your activity may be driven more towards one category of KPIs as opposed to another.

For each communication tool involved (in this case for each social media platform in use), you should identify key metrics and associate a financial value to them.

For instance, some examples of possible metrics in each category considered in this framework could be:

Awareness – e.g. page-views (impressions), search rankings etc

Appreciation – e.g. user comments, video plays, Facebook likes etc…

Action – e.g. CTR, sign-ups, downloads etc…

Advocacy – e.g. referrals, re-tweets etc…

Soft metrics should be related to hard financials; for instance, Page-views/Cost Per Unique Visitor, etc.

B – Benchmark – Most metrics only make sense if compared to something else.

You can compare how one social media platform performs against other social media platforms in use.

You can compare how each social media activity performs against other marketing channels sharing similar objectives (apples with apples…).

Also, you can compare your social media activity against competitors sharing similar objectives.

You can compare your performance against historical data (past performances).

There are commercial tools available to create KPIs, such as Ngage from North Social.

One important thing to bear in mind is that KPIs should be pertinent and relevant to your business and goal, so oftentimes it makes sense to come up and create your own KPIs.

Google Analytics: an overview

Today I would like to give a general overview on what is nowadays the most widely used website measurement tool: Google Analytics.

Described on the official site, Google Analytics is a website statistics service, which “not only lets you measure sales and conversions, but also gives you fresh insights into how visitors use your site, how they arrived on your site, and how you can keep them coming back”.

It is an easy-to-use service, free in its basic version (with a Premium version available for a fee) specifically designed to be accessible also to non-technical people, as it is built on an intuitive reporting platform, where users can decide what data they want to view and customize reports.

Here I won’t go into much detail regarding the different sections and features available, but an accessible beginner’s guide to Google Analytics can be found at blogtips.com. The official help center site has also a step-by-step guide to sign up and get started and a video tutorial on Google Analytics interface is available here. A more exhaustive list of online resources on the topic is available at Kissmetrics.com.

In this post I’d rather try and touch a few points regarding how to approach this powerful tool.

The amount of data made available in Google Analytics is so rich that there is the concrete risk of getting a bit lost down a rabbit hole of possibilities.

Therefore, it is important to access this tool with a clear mind on what data is needed and for what purpose.

Another important aspect to keep in mind – not only in relation to Google Analytics, but also with regard to marketing measurement in general – is that it’s all about comparative data.

Most metrics really make sense only in a comparative context.

Google Analytics allows you to compare data in different timeframes. Typical uses are week-on-week, month-on-month or year-on-year comparisons.

Along with checking your own performance overtime, you can also compare your performance with the industry average.

From a marketer’s perspective, the content section is important to understand how your users interacted with your site and have insights on how to improve your content based on your users’ behavior. For instance, landing pages with high bounce rates may need to be redesigned.

Traffic sources are obviously another section of dramatic importance for marketing evaluation. Along with information on the traffic itself (impressions, unique visitors…) it is important to look closely at keywords to assess brand awareness. What terms are users using to search for our brand? Are there common typos? Are there keywords you hadn’t thought of and which could make sense to target with advertising?

Also, traffic sources can give important feedback on the performance of your marketing initiatives and of the different channels you have used: how much traffic is coming from AdWords as opposed to Google Search (and in general from “paid” advertising as opposed to SEO)? How much traffic is coming from social networks and which one is performing best? If you have launched a specific PR initiative – organized an event or created specific new content – how is that reflected in your traffic data, can you spot correspondent spikes?

Good insight can be taken also in relation to customer service. For instance, what are the fluctuations in traffic to your FAQ page?

One of the most important and powerful features of Google Analytics is the possibility to assess how your site fulfills your business objectives through goal conversions.

A goal conversion is registered once a visitor completes a desired action on your site, such as an online purchase, a registration or a download.

Another important related feature is funnels, which are a way to specify the different steps you expect traffic to go through to reach your set destination goal.

Funnels allow you to track where visitors enter and exit the path to your goal. They are very important to spot potential problems: for instance if many visitors leave an online purchase procedure on a specific page, that page may have some problems, perhaps in terms of usability.

Google Analytics provides enormously useful data from a design and usability perspective: information such as geographical location, browser usage, screen resolution, operating systems – and so on – is vital to understand how to tailor your content around your audience.

If a significant portion of your visitors is using an iPhone or iPad, you may want to make sure your site is compatible with Apple devices.

In conclusion, as I’ve mentioned, Google Analytics can be a labyrinth of data if not approached with clarity of intent and focused objectives. What is important to remember is that it’s not about the data; it’s about the insights.

Social media: challenges and opportunities

Social networks are at the centre of a heated debate on Irish newspapers these days – and Hugh Linehan’s article on The Irish Times is just an example.

Without going into the specifics of that debate, here I would like to talk about social media from a marketing perspective, trying to touch a few points on what they represent today for brands and marketers.

In social the traditional categories of media channels (owned, paid, earned) somehow intersect with each other.

On one hand, free services like Facebook, Twitter and LinkedIn can be seen as owned media where brands can shape their message in their own voice without a direct cost to third parties, on the other hand though big social media players have been increasingly building up their business models on advertising and advanced features provided through paid services.

I have already talked about Facebook advertising, but Twitter advertising and LinkedIn advertising are also growing fast.

Most importantly though, social media have a very strong role in the context of earned media, where brands can engage with consumers and let them be the channel through word of mouth, buzz and – when the magic happens – through the “viral” effect.

However, if the benefits of earned media include credibility, transparency and durability, the flipside consists in challenges such as lack of control, potential for negativity, as well as the fact that measurement is difficult for this type of media.

Many companies have been quite reluctant to have a social media presence (Bank of Ireland is an example). Many still are.

Bad PR cases are far from infrequent – quite famous is the case of a McDonalds twitter promotion gone horribly wrong (or should I say “epic fail”?).

The important thing for companies is to implement a consistent and thought-through strategy behind their social media presence.

For example, it is important to have a consistent voice, but a “personal” voice as well, which means providing consistency of message but avoiding dull, standardized, non-compelling language.

Another important thing for brands – even for those with minimal active engagement in social media – is to be able to “listen”.

There are many tools available for what is often called “social media listening” or “social media monitoring”.

There are free and simpler tools such as Google Alerts and TweetDeck, as well as more advanced paid for options such as Radian6.

As far as the Irish industry is concerned, Kantar Media and O’Leary Analytics are worth mentioning.

Social media “listening” tools allow organizations and individuals to monitor what is being said about them throughout the web and more specifically through social media channels.

Sources such as social media, blogs, news sites, forums, message boards and many other web 2.0 platforms with user generated content are tracked and analyzed in order to determine the volume and sentiment of online conversation about a specific entity (brand, company, organization, individual) or a specific topic.

This has become increasingly important for companies and brands, not only to be alert to potential risks of bad PR, but also in order not to miss good business opportunities and improve customer service and satisfaction.

I have mentioned how measurement is one of the main challenges when it comes to earned media. Measuring “buzz” is not straightforward.

There are many tools and services through which help with processing social media information.

For example, I have already mentioned Facebook Insights in a previous post. This is a dashboard that helps with audience analysis and demographics.

Another important and challenging aspect is measuring influence and identifying key influencers in your industry or niche, for example authoritative bloggers providing relevant and high-quality information, with significant volume of page-views and high PageRank (reputation for Google Search).

For Twitter, reputation is also an important element.

Public information such as number of followers, who you are following, the number of lists you are on, as well as the names and categories of those lists can be relevant signals to establish your authoritativeness on a particular topic or in a particular niche.

Twitter lists, for example, can be considered a measurement of influence on Twitter: the more lists you have been placed on, the greater your reputation among peers and followers. Obviously, since not everyone uses Twitter lists, this data can be somewhat flawed and is not necessarily to be taken as an absolute indicator.

There are many tools that attempt to measure Twitter reputation, such as:

Klout, Social Chiefs, Peer Index, ReTweet Rank, Twitalyzer and TweetGrader.

In the attempt to identify authoritative influencers in a given niche, another big challenge is integrating the information across different social networks, products and channels.

In other words, there’s still no handy one-size-fits-all “PageRank for people”.

Google Search and SEO basics

After a somewhat (but not completely) off-topic diversion into recent news (NLI’s controversial view on incoming links), I would like to dedicate a post to an overview on Google Search and the basic principles of Search Engine Optimization.

How Google Search works

Google Search is essentially based on 3 main processes: crawling, indexing and serving.

Crawling:

In Google’s own words, “Crawling is the process by which Googlebot discovers new and updated pages to be added to the Google index.” Google’s spiders crawl the web by following links from one page to the other and update Google’s index when they find new pages or pages whose content has changed since their last visit.

Indexing:

Google processes and stores the information it finds on the pages it crawls (such as keywords in the text and their location in it, alt attributes, meta tags etc) and organizes this information in its index. In simple words we can say that Google “maps” the web so as to be able to determine what each page found is about and is relevant to.

Serving:

When a user enters a query, Google’s machines search the index and return the pages that are identified as more relevant as results.

The information stored in the index is used to determine which of the indexed pages are more relevant to the query performed.

Again quoting from Google’s help center, “relevancy is determined by over 200 factors, one of which is the PageRank for a given page.”

PageRank is a Google proprietary formula to measure the importance of a given page based on the analysis of its incoming links from other pages.

A traditional way to put it is that Google interprets a link from page A to page B as a vote from page B to page A. This principle – also known as link popularity – was influenced by academic citation analysis. In simple terms, the more a given academic study is quoted by other studies, the more authoritative it is; the same idea was applied to web documents and links.

Both the quantity and the quality of the incoming links are important in determining the PageRank of a page: “not all links are equal: Google works hard to improve the user experience by identifying spam links and other practices that negatively impact search results. The best types of links are those that are given based on the quality of your content.”

Generally speaking, the more incoming links a webpage has, the better it is for its PageRank. However, what Google likes are spontaneous (or natural) links – those that effectively account as votes – and therefore works hard to distinguish these from “spam” links, created to artificially boost the PageRank of a given webpage.

SEO basics

If we compare SEO (Search Engine Optimization) to paid online advertising as a marketing initiative, it is important to note how usually SEO is to be considered as a long-term strategy. If a Google AdWords campaign can bring immediate results, it can take months to see the benefits of an SEO strategy. On the other hand, residual effects of an SEO campaign can be perceived even after your budget has stopped.

What influences the ranking of a webpage is a combination of on-page and off-page elements and a Search Engine Optimizer usually works on both aspects.

Google has made available a Search Engine Optimization Starter Guide, which you can refer to for a more exhaustive overview on SEO basics.

Here I would like to just highlight some key aspects.

1. Keywords is the keyword (but in the right places and without excess)

Every SEO strategy should be based on a thorough keyword research.

It is important to identify the main sets of keywords related to the content of you site, which are likely to be used by users to search for your topic. You should take into consideration potential differences in your audience (e.g. more/less knowledgeable users etc) and give importance to long-tail keywords as well: these are longer, more specific keywords, not frequently performed by users individually, but which – in aggregate – normally constitute the largest chunk of search-driven traffic for a website.

There are many free services that can be used for keyword research. One of them is Google AdWords Keyword tool.

Some of the earliest decisions you take for your website have the biggest impact on your website ranking.

For example, having meaningful and relevant keywords in your domain name is extremely important as it helps users and search engine understand immediately what your site is about.

A good domain name should also be short (and digitalmarketingmeasurement.wordpress.com, I admit, is not the best example…), easy to remember and easy to spell.

If budget allows, top-level domains are generally better than domains on free hosts; also – even though for organizations a .org may make sense and for local businesses a regional domain may be preferable – in general .com domains are the best choice, as this is established as the “default” in people’s mind.

Relevant keywords should also be used in URLs. Organizing your site structure in descriptive categories and filenames helps the crawling process. Having meaningful and relevant keywords in the URLs (rather than, for instance, lengthy URLs with weird parameters) is good for both users and search engines.

Some other important elements where it’s important to place relevant keywords are:

–  Title tags, which should be unique for each page, brief but descriptive.

– Description meta-tags, important because Google might use them as snippets. They should be, again, unique for each page and sum up the content of each specific page in one or two sentences or a short paragraph.

– Anchor text: it is good practice to use relevant keywords in the anchor text not only of your external links, but even more of your internal links.

–  Image alt text attribute, which may also help for ranking in Google images.

– Heading tags, which shouldn’t be abused, but should appropriately represent the hierarchical structure of the content on your page.

2. Site structure and navigation

Having a clear and logical site structure – usually based on a natural flow hierarchy from general to specific – and an easy navigation is of vital importance, both for user usability/accessibility and for search engines.

Google SEO starter guide gives many good tips in relation to this; here I’ll just mention the importance of having a good site map page for users and of providing a Sitemap to Google (usually an XML Sitemap file, but for basic sitemaps also a simple text file listing one URL per line can do).

3. (High quality) content is king

Again, I refer you to the Starter Guide for more elaboration on this, but here are the key ideas:

Original, unique, compelling content that is valuable to users and stands out from other sites and competitors is essentially the best SEO technique of all. Outstanding content will naturally generate users interest, bring in organic backlinks and grow your ranking and reputation overtime.

In the last two years in particular, Google has focused a lot on improving its algorithms in order to differentiate between high quality and low quality content (Panda and Penguin updates). Here’s an article with some guidance on what Google consider high quality content.

4. Backlinks are queen, but can be a treacherous one…

I have mentioned how Google’s crawling process is based on spiders following links from page to page and how PageRank is based on the analysis of incoming links (aka backlinks) of a page. So links are obviously very important for a website search engine optimization.

As I have mentioned above though, what Google reputes as valuable are organic, spontaneous backlinks and therefore has measures in place to try and differentiate between these and “artificial” or “spam” links, essentially links which are intended to manipulate a webpage Page Rank and ranking in search results. Google help center provides insightful examples of types of unnatural links which can harm a website reputation.

An important thing to keep in mind is that Google has nothing against link trading (buying and selling links) provided that paid links don’t pass PageRank. PageRank flow can be easily prevented by adding a rel=”nofollow” attribute to the <a> tag.

It’s easier to be specific on what an “illegitimate” link building activity is than point out specific legitimate practices, but in general terms organic backlinks can be pro-actively attracted by building up and engaging your community of users and connections around your website and in your relevant niche.

Just in conclusion, lately Google has started putting a lot of emphasis on authorship through the use of the authorship markup tag rel=”author” and the SEO community has started suggesting its use as a very importance SEO factor.

Weren’t incoming links a good thing?! Newspaper Licensing Ireland’s unusual view.

You might be already aware of the recent article by solicitor Simon McGarr, titled 2012: The year Irish newspapers tried to destroy the web and related to a dispute between National Newspapers of Ireland’s subsidiary, Newspaper Licensing Ireland, and the domestic violence charity Women’s Aid, in relation to whether a newspaper can claim copyright for a link to its content if this is done “for commercial purposes”.

McGarr’s article and the subsequent buzz have spurred NLI to publish a follow-up statement – which however reaffirms how their “view of existing legislation is that the display and transmission of links does constitute an infringement of copyright”.

A recent article on The Irish Times has recounted the story mentioning also a statement from The Irish Times itself, which partially distances the newspaper from the position expressed by NLI, as it recognizes that “linking is the lifeblood of the online world and we encourage our digital community to share links as widely as possible. Therefore, The Irish Times does not see links as copyrightable and will not attempt to impose any restrictions on the posting elsewhere on the Internet of mere URLs that refer to its content”.

NLI’s controversial view on links and copyright clashes dramatically with the notion of links as fundamental elements of the World Wide Web, as well as one of the most important and beneficial factors for a webpage ranking in search results.

At the base, there seems to be a misconception on what hyperlinks (or simply links) are. A link is essentially a clickable element (an anchor) on a web document, which takes you to another document or another part of the same document, following a reference – a URL (Uniform Resource Locator) – that tells you where this other resource is.

In her article on The Irish Times, Laura Slattery reports Mr McGarr saying to RTE’s Morning Ireland that “a link is equivalent to, say, a Dewey Decimal number in a library – it tells you where the book is, but it’s not the book”.

Using the same metaphor, it would be more accurate to say that a URL is the equivalent of a Dewey Decimal number in a library, whereas a link, more than just telling you “where the book is”, actually takes you to it, if followed.

In any case, yes, the idea that a newspaper can claim copyright for a link directed to its content is of quite radical absurdity in light of what the Web is and has been so far.

More on Facebook advertising

Following my last post on Facebook advertising, I’d like to touch a few more points related to Zuckerberg’s social network.

Facebook allows you to manage your advertising campaigns through a front-end panel, called Facebook Ads Manager, where you can view your ad campaign, edit your bids and your budgets, as well as pausing and restarting your ads at any time.

For each of your campaigns, Facebook Ads Managers shows you data such as impressions, clicks, CTR, CPC/CPM and spent and allows you to generate reports.

In my previous post I mentioned that you can use Facebook ads to send users not only to a Facebook page/group/event or app, but also to an external website.

It is important to know though that if your landing page is an external website – as opposed to a Facebook destination – your ads will be more expensive.

If you use Facebook ads to drive traffic to your website, you can track Facebook referrals in Google Analytics or other web analytics tools.

Another nice tool you can consider to track links to a given destination is bitly, a URL shortening service which also allows you to share your links and track their usage.

Along with the types of ads I have talked about so far, Facebook provides advertisers and businesses with solutions that hinge more specifically on the “social” nature of this media. Facebook competitions – or promotions – are one of those and are an option for companies and businesses to generate “buzz” around their product and build up fan base, or in more common marketing lingo, to create awareness, engagement and advocacy.

One thing to keep in mind is that Facebook has specific guidelines – see point E and see also here – you need to comply with to run a contest/competition. They have changed overtime and are not unlikely to change again; therefore it’s good to check them regularly if you are going to make frequent use of Facebook competitions. On spiderworking.com there’s a good article on how to run Facebook competitions by the rules followed up by an overview on the most common types of Facebook competitions and on the most common misuses. An important point raised is that the right type of competition for you to implement depends in large part on the type of audience you have and the level of engagement you can expect. Also – keeping in mind that marketing is ultimately about a value exchange between brands and consumers – the more you ask your audience to engage, the more you should reward them.

A very big part of marketing activity on Facebook is nowadays connected with the development of Facebook apps, which are more and more integrated in advertising campaigns to incentivize audience engagement.

This can be seen for example in the advertising campaign rolled out by the Irish marketing agency Ican for beverage producers Bulmers to support the launch of their recently introduced pear flavored cider.

There is a lot of data you can measure to assess users’ response and engagement with your brand/product on Facebook.

Facebook provides page owners and app developers with a metrics tool called Insights, a dashboard that helps them analyze “trends within user growth and demographics, consumption of content, and creation of content”. Mashable.com provides a good introductory overview of this tool.

Facebook – as other social media – has the potential to turn paid and owned media (i.e. your Facebook ads, your Facebook page) into earned media (the advocacy of an engaged fan base), but it is important to approach a Facebook marketing campaign with a specific strategy and with clear KPIs.

Another important thing to keep in mind is that, no matter how hot the word is, you can’t predict nor determine what will “go viral”, an outcome which is the exception rather than the rule.

Facebook advertising

After having dedicated a few posts to Google AdWords, I would like to keep talking about paid media by giving an overview on paid advertising options on Facebook.

When I talked about AdWords in relation to contextual targeting and search, I highlighted how advertising on Google – at least traditionally – is mainly focused on users’ needs, as people use Google to look things up, to find what they need/want.

It is important to note that on Facebook, instead, the focus is mainly on people’s behavior: what they like, what they share, what they make known about themselves and so on.

Facebook’s goldmine is obviously the extremely targeted potential audience they can offer to advertisers. The more personal data users share with Facebook, the more targetable they are as a potential audience.

From an advertiser’s perspective, the level of targeting potential is so high that, theoretically, if you knew enough about a specific a person, you could target your advertising campaign to that specific individual only.

However, it is important to keep in mind that generally people are not on Facebook to look for products, but to catch up with friends, post pictures, check other people’s profiles, play games etc.

A Facebook advertising campaign needs to be designed in light of this acknowledgement.

Facebook advertising has been changing fast and constantly and there are many different available ad formats. Qwaya – a company specialized in Facebook marketing – provides a good overview of Facebook ad formats on their website.

Here we can mention the two main categories and underline their main differences.

The first is what is generally referred to as Facebook ads, the second is what is instead called Sponsored stories.

Facebook Ads – “Voice of Business”

Advertisers are in full control of all creative elements (title, imagery, text) of the ads in this category.

The most common format is what is called “Standard ads”.  These are the traditional Facebook ad you find on the right hand side of placements such as the Facebook homepage, events, pages, user profiles, apps and next to photos in photo albums. These ads are instead not eligible to appear in the News feeds and on mobile.

As landing page, you can set a Facebook page, app or event, but also an external website.

These ads have a title (max 25 characters), a body text of max 90 characters and can have an image attached (displayed in a 100×72 px format)

Generally speaking, standard ads look (and are perceived by users as) more “sales-y” than sponsored stories.

Sponsored stories – “Voice of friend” 

Every time someone interacts with one of your Facebook entities – e.g. someone likes your page or one of your posts, uses your app or is going to your event – a story is created. You can turn these stories into sponsored stories, so as to maximize their distribution among the friends of the person who generated the story.

Sponsoring a story doesn’t change its content or appearance; it only changes its distribution.

Sponsored stories are eligible to appear in the News feeds and on mobile.

They are less “sales-y” than standard ads in that they appear as “recommendations” to friends of the person who generated the story, rather than straightforward advertising.

Because of this, generally they tend to have a higher CTR.

Creating a Facebook Ad Campaign

A detailed overview on the different steps to create a Facebook ad campaign is provided here. I’ll try to sum up the main aspects.

Identifying your goals

It is important to identify your advertising goals and how to achieve them – you may want to increase “Likes” on your company Facebook page, increase traffic to your company website, generate leads. Each ad campaign should have a goal.

Choosing your audience

As said above, the main selling point of Facebook advertising – in particular in comparison with traditional advertising – is the level of precision with which advertisers can target their audience.

Facebook actually shows you your target reach while you select your targeting options.

For example, I can choose to show my ad to:

Single women living in Italy, aged between 23 and 39, mothers of a child aged between 0 and 3 and graduated from college.

Doing so, at the moment, I get a target reach of 100 people.

facebook_target_sample

Facebook allows you to reach highly targeted segments

As the picture above shows, Facebook also gives you a suggested bid.

Campaign settings

When you create your first Facebook ad, you are asked to enter your campaign settings, including Account currency/country/Time zone, campaign name, budget, schedule (can be continuous or have set start/end dates), pricing model (CPC or CPM), and bid.

Facebook_campaign_settings

Facebook settings selection for Account currency/country/time zone, Campaign Name/Budget/Schedule/Pricing/Bidding.

Deciding on your pricing model and bidding is the key point, as well as deciding on what ad formats to use and how to distribute your budget among them.

Obviously these decisions will depend on your campaign goal and on how you intend to achieve it.

Google AdWords ad groups: keywords, ads and bid settings.

In my last post I described the main elements related to the set-up of a Google AdWords campaign. I have also mentioned that each AdWords campaign is made up of different ad groups. To be more precise, a campaign contains at least one ad group, but normally it will contain many.

Essentially an ad group consists of one or more ads, a list of keywords you want those ads to be shown for and bid settings (a Max CPC set for each keyword included).

Keywords

When you create an ad group you are asked to choose a list of keywords you want to trigger your ads.

The keyword selection process is of vital importance for the success of your ads performance.

As opposed to traditional marketing, AdWords – and keyword advertising in general – provides advertisers with target customers that qualify themselves as leads by proactively searching for terms related to the advertisers’ business.

Advertisers need to capitalize on this by choosing keywords truly relevant to their business. It is also important for advertisers to think like users in order to be able to identify keywords and phrases which mirror what is likely to be the language of users’ search terms.

Normally users search for needs, not for brands.

Keyword research is a very important step in the definition of an AdWords campaign and different ad groups should be shaped and structured based on this preliminary work.

Google provides users with a free Keyword Tool which helps advertisers identify the key terms that are apt to drive traffic to their website or that are related to their business.

You can either enter a word/phrase, enter a specific website or choose a category (or do all of these things at once) and the tool will return a list of suggested relevant keywords and for each of them it will give estimates of their monthly search volumes and their competitiveness.

In my previous post I noted how important it is that the account/campaigns/ad groups structure mirrors the structure of your business and your goals. Each campaign should represent a business goal and the different ad groups should have enough granularity to represent the different aspects of your business.

Ideally you should create a different ad group for each theme that describes your advertising campaign. For instance, you may have an ad group for each product you offer, as in this example from the AdWords help center: here the overall campaign is about Discount Electronics and each specific product – DVD players, VCRs… – has its own ad group.

Each ad group has its own list of keywords.

It is good practice not to have the same keyword included in different ad groups, because the system would only show one ad for the same advertiser for a given query, therefore an advertiser would have two of his/her own ads competing with each other if they were both triggered by the same keyword.

The page linked above from the AdWords help center lists some other important tips related to keyword selection:

multi-word keywords are generally better than single-word keywords, the latter being too broad and likely to trigger the ads for irrelevant queries.

– it is good practice to include singular/plural variations in order to increase the likelihood of the ads appearing on relevant queries.

– as much as it’s important to identify relevant keywords, it is also important to exclude keywords which can create irrelevant targeting by selecting them as negative keywords. This is done at campaign-level though.

The list of keywords contained in an ad group will be common to all the ads in that ad group.

Ads

As said, an ad group can contain different ads, where the advertiser can diversify their different components.

The components of an AdWords text ad, which is the standard type of Google ad, are basically 3:

– Headline

It’s the first line of your ad, the one users are most likely to notice. It should be catchy, make your ad stand out and should match the keywords contained in the user query; that way it is more likely to catch users’ attention. A headline can contain up to 25 characters.

– Display URL

This line shows – in green – the address of the advertised website. The display URL has the function of letting users know where the ads will take them. It’s good practice to choose a short, meaningful URL, usually the homepage of your site. The destination URL – which is instead not a visible part of the ad – can be different from the display ads and identifies the landing page users will get to by clicking through the ad. It is good practice to choose a destination URL as relevant as possible with the specific ad. The destination URL needs to be a page of the same website of the display URL though, not a page of a different website.

Many times it makes sense to send users to a deep URL of your website – a specific detail product page, a specific booking page etc – and that URL may be long (mirroring the deep location of that page in the navigational structure of your site) and/or perhaps containing parameters that make it not intuitive for users. Those are cases where you may choose to show users a neater and shorter display URL.

The limit for display URLs is of 35 characters (but only 17 for languages like Chinese, Japanese and Korean, which use double-width characters).

If a display URL is longer than this limit, the URL will be automatically shortened (not displayed fully).

– Description

This is the space for your actual ad copy to describe of the product/service advertised. It can contain up to 35 characters altogether.

A text ad should highlight what makes your business unique. It’s recommended to include practical elements such as prices, promotions and special offers and a clear call to action, in consistency with the ad goal and the landing page (e.g. fostering users to buy your product on your detail product page or book a ticket on your ticket booking page or sign-up to your newsletter on your sign-up page etc).

It is advisable to experiment by creating different ads in the same ad group and monitor their performance.

Bid setting

You can set the same Max CPC for all the keywords contained in your ad group or you can diversify the bidding by choosing different Max CPCs for the different keywords. When you create an ad group, you are prompted to set a default ad group bid (Max CPC) for all the keywords in your ad group. You can then edit this value and override the default bid by raising or lowering the Max CPC for specific keywords in the ad group list.

It is also possible to let AdWords set your bids automatically (automatic bidding). This is a good option in particular if you don’t have time to follow the performance of your ads closely. The system, based on your campaign budget, adjusts your Max CPC bids automatically with the goal of optimizing your performance for the budget available.

For more control, it is possible to set a bid limit.

It is also possible to switch from automatic to manual bidding at any time.

Setting up a Google AdWords Campaign

Following up on my previous post on Google AdWords and contextual targeting, I would like to give overview on the main elements of a Google AdWords campaign.

The structure of a Google AdWords account is based on three main levels: account, campaign and ad group.

AdWords structure

AdWords structure is based on 3 levels: account, campaign and ad groups.

An account is identified by a unique email address and password (Gmail account used to log in) as well as by a Customer ID number. It is also associated to specific billing information.

An account can contain multiple campaigns.

Each campaign has its own budget, start and end dates, geographic and language targeting options.

An ad campaign is made up of multiple ad groups.

Each ad group contains a set of ads and a list of related keywords.

It is important that your account structure mirrors the structure of your business. Each campaign should be specific enough to identify a specific business goal (e.g. selling a product or service) so that the different ad groups can give you enough flexibility to describe its different attributes in detail. A granular structure will allow you to create ads specific enough to match the related keyword list and users’ search terms and perform well.

From a practical point of view, Google AdWords help center provides a detailed step-by-step guide to set up a campaign. I will try to sum up the main aspects involved.

The first thing you need to choose is you campaign name. It’s good practice to have descriptive names that help you identify each campaign easily, especially if you’re going to create many. Your campaign name won’t be visible to your customers. It’s for internal use only.

Then you’ll have to specify your campaign type. This will depend on the type of campaign you have planned and the type of ads you intend to show. This selection will determine which setting options – for example in terms of budget and targeting – and which features will be available in your campaign.

In terms of network settings, depending on the type of campaign you have selected, you can choose to display your ads on the Search Network only, Display Network only, or both Search & Display.

Selecting the Search Network you choose to show ads on Google search sites, including Google Search, Shopping, Maps, and Images, and other search sites that partner with Google (you have the flexibility to include Google search partners or exclude them and just limit your targeting to Google properties).

Sites in the search network will show mainly text ads, however Google Images will also show image ads.

Selecting the Display Network (GDN) you choose to show ads on Google’s network of partner websites, as well as on Google sites like Gmail, YouTube, Blogger and Google Finance. This is a good fit for a variety of ad types such as text, image, rich media, and video ads.

Selecting both Search & Display, you target your campaign to the widest audience available in AdWords.

You’ll also have to decide on your location and language settings.

For example, if the purpose of your campaign is to advertise a product you’re selling only in one country, it will make sense to limit the location setting to that country. Likewise, if your customers only speak one specific language, you should limit the language setting accordingly.

The main methods to select you location targeting are:

–       Targeting entire countries

–       Targeting specific area within a country

–       Targeting a radius around a location

The language set as target should always be the language in which your ads are written. Also, since the target language is set at campaign level, there shouldn’t be a mix of ads in different languages within the same campaign. If a business targets several languages, each language should be targeted in a separate campaign.

Another choice in terms of audience selection is device targeting: you can decide to target your ads to all available devices or specify selecting any of the following:

–       desktop and laptop computers

–       mobile devices with full browsers (such as iPhones and Android devices)

–       tablet devices with full browsers.

If you choose any of the last two, you can specify further by selecting specific operating systems, device models, carriers and Wi-Fi.

Finally, you’ll have to choose your bidding and budget.

Your budget determines the charging limit for your campaign. It’s set per day. Your actual daily spend varies and may peak at 20% above your daily budget (this is called over-delivery), but the system makes sure that over a given billing period you won’t be charged more than your monthly charging limit, which is:

your daily budget * 30.4 (average days per month).

Your bidding option refers to your pricing model. By default it is CPC (Cost Per Click), which means that you pay only when users click on your ads. This is by far the most common option. However, other options are also available.

It is possible to select CPM (Cost per Mille), but exclusively for campaigns targeting the Display Network only. If you choose this pricing model and bidding option, you’ll pay based on impressions, not clicks.

It is also possible to select CPA (Cost per Acquisition), but only for campaigns with conversion tracking set up. This is meant for conversion-based campaigns, where advertisers have set up specific goals as conversions and are paying based on the number of conversions (for instance, only if a click on the ad converts into the purchase of a product on my landing page).

Your bid amount has an impact on your ad traffic and ranking as well as on your ROI. Higher bids are likely to increase your ad exposure as well as your spending. Lower bids are likely to increase your ROI, but generate fewer clicks and conversions.

These are the main campaign settings. There are other advanced settings among which it is worth mentioning start and end date. Your campaign may be meant to run for a specific limited amount of time (e.g. a special offer promotion, a new product launch etc). You can schedule your campaign to start and end on specific dates.

Thus far I have described the main settings at campaign level. I’ll continue in my next post by talking about ad groups, ads and keywords.

Google AdWords and contextual targeting

Talking about display advertising, I dedicated a blog post to display ads and rich media ads, only mentioning text ads briefly.

I would like to talk about text ads in more detail now, by giving an overview of how contextual advertising works in Google AdWords, in relation to Google Search.

Let’s start from what may sound like stating the obvious by now. John Battelle has defined Search as a database of intentions and a query as “a declaration of a very particular intent”: to find something you want. This database of intentions may have become “larger” and more articulated as Battelle states, but this point about Search stands true: people generally use search engines to look up something they want, something they need.

Contextual advertising stems from this acknowledgement. The idea is to advertise your product to whom is looking for it and when they are looking for it: in context.

If I sell digital cameras, my ad may be of interest to users who are searching for something related to digital cameras.

Sample of a search result page

Sample of a search result page

AdWords allows advertisers to create ads and target them to a list of relevant keywords. When a user performs a query related to keywords that advertisers have targeted, Google will return contextual ads, along with the organic (or natural) search results (pages from the Google index relevant to the query).

In the picture above you can see how contextual Google ads – when available – are placed on the right-hand sidebar and on top of the organic search results.

Obviously, there is only a limited number of ads that Google can show on a search result page and the more competitive the query is (the more targeted it is), the harder it is to get a slot for your ad.

How does Google decide which ads appear on a given search result page?

With a system called Google Ad Auction, which Hal Varian, Chief Economist at Google, explains in this video.

When a user performs a query in Google’s search engine, an algorithm checks if there is ad inventory for that query (if advertisers have chosen to target their ads to keywords related to that query) and, if there is, it performs a virtual auction to assess which ads to show in the available slots.

Google AdWords is based on a CPC (Cost Per Click) pricing model (advertisers are charged only if a user clicks on their ad, whereas they are not charged if the ad appears on the page but is not clicked on).

When an advertiser creates an ad and chooses a list of related keywords as targeting, he/she will have to decide on a Maximum CPC (Max CPC) for each keyword included. The Max CPC is the maximum amount the advertiser is willing to pay for a click on the ad.

For example, I could decide to target my ad to digital cameras and be willing to pay € 0.50 as maximum amount for a click on the ad in relation to that keyword. I could also target the same ad to other keywords and set different Max CPCs for them, for example I could be willing to pay € 0.80 as max CPC for cheap digital cameras.

Now let’s go back to our limited slots available on a search result page: what determines which ads are chosen for the available slots and in what order they are placed is an index called Ad Rank.

Ad Rank is calculated with the following formula:

Ad Rank = Max CPC x Quality Score

Quality score is a metric that Google calculates for every ad entering an auction to assess how relevant and useful the ad is to users in relation to that specific query.

Quality score is determined based on three main factors:

–       CTR (Click Through Rate)

–       Relevancy

–       Landing Page quality

CTR is by far the most important component. It’s an ad performance metric and is given by the number of clicks on an ad divided by the number of times that ad is shown (number of impressions), expressed as a percentage. As soon as an ad starts registering impressions, its CTR will vary depending on how many times users click on it.

Relevancy is the second-largest component of the Quality score and it depends on how much the language of the ad text matches the keywords contained in the query the user has performed.

The third component of the Quality score is the Landing Page Quality: the landing page – the page users get to by clicking through the ad – needs to be relevant and consistent with the ad text, user-friendly, fast to load etc. In short, it needs to provide a good user experience.

The Max CPC is, as said, the maximum amount an advertiser is willing to pay for a click on his/her ad. However, most of the time an advertiser will pay less than that in the case of a click. The system is designed in such as way that you only pay enough to beat the bid of the advertiser below you, as explained in Varian’s video. The actual amount an advertiser is charged for a click is called (surprisingly!) Actual CPC.

A detailed explanation of the CPC bidding system is available on the Google AdWords help center.

For advertisers it is important to monitor the performance of their ad campaign over time and to fine-tune the different factors in place accordingly (Max CPC, keywords, ad creative, landing page quality etc).

There’s a lot to say about AdWords, so I will come back to it to talk about how an AdWords campaign is structured.

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