One of the “features” of enhanced campaigns is that your campaign can now run on desktops and mobile devices with different CPCs that are controlled by bid modifiers. However, since your ads can be run on multiple devices at the same time, you need to test your ad metrics by device.

This can easily be accomplished with device preference and Excel filters. First, let’s discuss why this change needs to occur, and then, how to control the ad serving to ensure you are testing your enhanced campaign ads properly.

Why The Testing Change?

Let’s say we’re testing two ads and that we’re running both ads on all devices (desktops/tablets and mobile devices). What happens is that after a while, we check our metrics and we see data that looks like this:

If you simply used this data as-is, you would assume that Ad 1 is the best ad overall and go with that ad.

However, averages hide all the useful data. You need to segment your data to truly understand what is happening. If you were to segment these two ads by device type, the data looks much different:

In reality, Ad 1 is not the best ad — it is the best ad on mobile devices. The best ad on desktop devices is Ad 2.

Therefore, you’d now want to control which ad shows on which device, and this can be accomplished with device preferences.

Device Preferences

When  you create a text ad, you can specify the device preference:

If a campaign is set to show on all devices, and you have not set a preference by ad, your ads will be shown on all devices.

If a campaign is set to show on all devices, and all your ad preferences are set to mobile, your ads will be shown on all devices.

To control the ad serving by device, you need both a mobile preferred ad and a non-mobile preferred ad in each ad group. To test ads by devices, then you need at least two mobile preferred ads and two non-mobile preferred ads in each ad group.

Image Ad Preferences

In “legacy” campaigns, most sophisticated accounts would segment their display advertising from their search ads, and their mobile display campaigns from their desktop display campaigns. Because these campaigns were already segmented by device, most marketers would just upload “mobile” ads to their mobile campaigns and desktop sizes to their desktop campaigns based upon Google’s sizes:

However, several of the sizes that are not traditionally considered mobile ad sizes can be shown on mobile devices:

Therefore, you will also want to specify the mobile preference of an image ad so that you can test your image ads by devices as well as your text ads.

An Easy Way to Determine Ad Types by Device

In the AdWords interface, it is not easy to see if you have a mobile and non-mobile preferred ad in each ad group. The easiest way to see this data is to use a pivot table and conditional formatting.

In this case, a simple pivot table was used to show the number of ads by device preference in each ad group; and then, conditional formatting was applied to highlight any cell that was less than 1.

If you wanted to make sure you were testing in each ad group, you could also highlight all cells with less than 2 ads using conditional formatting. This would allow you to see which ad groups need ads created so that you can test them.

Run Your Statistical Confidence Numbers As Normal

Once you have the ads set up and running by device, you can do your statistical confidence calculations and pick your winner — just make sure to segment the information by device.

Only use your mobile information to test your mobile ads and pick winners.

Only use your desktop information to test your desktop ads and pick winners.

Once the data is segmented by device, the way you run your numbers and pick winners will not change with enhanced campaigns.

A “Cheater’s” Way Of Testing

Creating thousands of new ads can be a daunting task — so, there is a shortcut you can use. However, please note that, as with any shortcut, there are some underlying weaknesses.

Instead of creating ads for every device type, if your landing pages have the same content (such as with responsive design) and if overall conversion actions by device are the same, then you can start with just ads on “all” devices. You can then segment the data by device type and run your statistical confidence by device.

Once you have a winning ad by device, then you can change the ad’s preference type of mobile if it’s a mobile winner and leave the desktop winners as all devices.

There are a few inherent weaknesses to this approach:

• You cannot customize the call to action by device
• When you “edit” your winning mobile ad, it must go back under review and the stats are “reset” for the ad

This isn’t an ideal long term solution; but, if you are trying to transition many campaigns and thousands of ads to mobile devices, it can be a way to start ad testing.

However, with a “good” transition, you will keep your mobile ads in your enhanced campaign by moving the mobile ads to your desktop campaigns (or vice versa) and using ad preference to keep them segmented.

Wrap-Up

Enhanced campaigns are a major change to managing AdWords. However, they do not change the underlying principles of ad testing. You must test ads — and a good ad test will not only examine the differences in multiple ads, it will also take into account segmented data such as the device where the ad was displayed.

By ensuring you are controlling your ads displayed by device type, you can be confident in your ad tests and ensure that you are keeping the best ad for your account.

Even with device segmentation, many of the previous columns on ad testing are still true – they just require a previous step – device ad control. You can still easily manage and test millions of ads and use cross ad group testing principles.

The maxim, “your data are only good until the data changes,” can be applied to ads, landing pages, placements and any data point within your PPC campaign.

The issue that needs to be examined, here, is the frequency of data changes and how that affects your strategy. Typically, ads do not need to be changed every few days. An ad or a landing page can perform well for long periods of time. The same cannot be said of bids.

Rarely do you have an optimal bid set for a keyword for a month straight. So, when you consider areas of your campaign where you can make long-term gains, they are not in bidding. CPA bidding is a short-term gain, but a necessary action; and when done right, it leaves the PPC manager free to spend more time focusing on these long-term gains and less time on bidding.

However, I often find a simple mistake with CPA bidding, or even with 3rd-party bid systems. Once CPA bidding (or a 3rd-party system) has been enabled, the PPC manager sits back and thinks his or her work is done.

For the purpose of this article, we will leave out all of the testing you should be doing regardless of your bidding methodology, and focus on making CPA bidding work for you.

I find that when CPA bidding fails, it does so for one of three reasons:

1. The campaign’s conversion data is sporadic by keywords and ads. An example is when you have thousands of keywords; but only 20% of them have received a conversion in the past 30 days; however, since all contribute to total conversions over the course of a year, you can’t really delete any.
2. “Best Practices” of account management are ignored because the bidding is being taken care of by Google.
3. It just doesn’t work for totally unknown reasons. I do see this happen on occasion, where everything is set up and managed perfectly, but for unknown reasons, the CPA bidding just can’t seem to get the bids correct.

Let’s look at four scenarios in which CPA bidding initially failed, but ultimately succeeded after applying some minor changes.

Scenario 1: Data Problems

This first example is one that amazed me. I was auditing an account that was using CPA bidding and discovered that the company had failed to set up conversion tracking on their mobile site. However, the campaign was set to all devices. It wasn’t immediately noticeable because desktop performance was high enough to ensure that CPA bidding had enough conversion data to keep running.

After using CPA bidding for three months, 25% of all traffic was still coming from mobile devices.

CPA bidding does take devices into account when setting bids. However, it rarely ‘gives up’ on a device; instead, it keeps trying to find a bid that will work. By just adding the conversion code to the mobile site, CPA bidding becomes much more effective.

The Lesson: Make sure all your tracking is set up correctly.

Scenario 2: Using Call Extensions To Create Goals

The second example features an e-commerce site. They were B2B e-commerce, so they did use the phone extension, as calls often converted into sales; however, they were all sales on the phone that were not put back into analytics to see the actual revenue per conversion.

When this company upgraded to an enhanced campaign, they liked the fact that they could count calls as conversions and thus, used the ‘report phone call conversions’ option in their account.

They continued to receive phone calls, but their CPAs climbed considerably for all e-commerce goals and were well above their target CPAs. While CPA bidding didn’t technically fail in this case (they were getting the calls, after all), the e-commerce manager was quite unhappy as the overall site e-commerce was declining, and there wasn’t any data to show them exactly what data points were generating the calls.

They disabled the option to report calls as goals. After the disabling, they still received calls (as they did before going to enhanced campaigns); however, their CPAs went back to their target goals, and all the conversions were actual e-commerce checkouts

The Lesson: If you are going to add additional conversions for CPA bidding, make sure you really want the optimizer working off of those goals.

Scenario 3: Keyword Expansion

The next lesson comes from a company that used CPA bidding for months. They were very much enjoying the bid system, and they had put so much faith into it that they just kept adding keywords and thought Google would figure it all out.

Every month, their CPAs went up; but not by enough that anyone was motivated to investigate. They just assumed it was bid pressure and kept adding more keywords.

After several months of expansion, it was time to give their quarterly report to the VP of Marketing. The CPA trend worried her, so she asked for a larger time frame for the CPA trend. Once she saw the CPA climbing for several months, she asked for a 3rd-party investigation.

The answer was quite simple. They were adding keywords, but they were not paying attention to the search queries of those keywords. Just by adding a few hundred negative keywords, the CPAs quickly returned to an acceptable amount.

The Lesson: You must still follow best practices of account organization, match type selection, query analysis, and adding negative keywords — even when using CPA bidding.

Scenario 4: Ad Copy Testing

The next example comes from a company that is great at landing page testing, but decided it was time to start doing more ad tests. So, they created a program for testing their ads, wrote lots of new ads, and put them live into their account.

Their CTRs almost doubled. But their conversion rates dropped nearly by half, and their CPAs rose more than 30%.

The problem? They were using Google’s default ad serving option: optimize for clicks.

If you are going to test ads in CPA bidding campaigns, you have two options:

• Control everything: use rotate indefinitely, watch the data, pick winners, delete losers, repeat.
• Know you’ll forget to end tests: in this case, if you are going to create multiple ads and then forget about them, use ‘Optimize for Conversions’ for your ad testing. With this method, Google will pick the ad with the best conversion rate and show it more frequently.

The Lesson: CPA bidding does not serve ads; it sets bids. If you are going to test ads — and you should — make sure you are using the correct ad rotation settings.

Conclusion

I find that more often than not, CPA bidding is highly effective. There are times when it fails, but that now seems to be the exception, even for low-conversion accounts.

Now, CPA bidding is great when you have a static CPA target for all keywords in each ad group; however, many e-commerce sites have a target ROAS instead of a target CPA. In that case, CPA bidding is rarely the best bid method to use.

Regardless, no matter how good CPA bidding is for you, if you don’t continue to follow best practices for optimizing your account, CPA bidding can often become ineffective.

Just because you have an automatic bidding system — either Google’s CPA bidding or a 3rd-party bid management system — that doesn’t mean you can stop working on your account. Those systems change bids based upon the system inputs. If you give them bad data, they will make bad decisions.

Using automated bid management is great. It gives you back the time you would have spent setting bids so you can make sure your account is optimized. However, you can’t abandon your account when you use such a system — you must still continue to follow best practices.

For mobile targeting, this is true, as the ability to target mobile devices is now gone. However, for the targeting features that are left, such as location targeting, you might not want to consolidate your campaigns just for easier management.

In today’s column, we will examine how locations affect your campaign structure and if you should change your structure to match the new enhanced campaign benefits.

Location Bid Modifiers

Most accounts do not have the same conversion rates by geography. In some cases, the changes are small; but in other cases, the changes can be quite dramatic.

In this instance, the CPA of San Antonio is double that of Philadelphia. Therefore, we would not want to bid the same for each of these locations. Before enhanced campaigns, in order to bid separately by location, we would need to create a campaign for each location and set bids based upon the keyword CPA by region.

With enhanced campaigns, this will not always be necessary. One of the great new features is bid modifiers based upon locations. With bid modifiers, you can automatically adjust your bid for each location being targeted.

For instance, we can set our keyword bids as normal based upon some global CPA numbers, and then tell AdWords we would like to bid 32% higher for the Philadelphia region and 39% lower for the San Antonio region.

Before you can set a bid modifier for each location, you must add them to your campaign targeting section. If you don’t add each location to your campaign targeting, then you will not be able to set a bid modifier by location.

The good news is that this is very simple. You set bids as normal and then automatically adjust your bid by region.

The main limitation is that this is a campaign-only setting. If you have some keywords that do better in San Antonio than Philadelphia, but overall San Antonio is worse so you’d want to use a negative bid modifier, you cannot exclude keywords from the bid modifiers nor have bid modifiers at the keyword level. Of course, having that level of control would be incredibly difficult to manage by hand, so using campaign bid modifiers is a nice middle step.

The bad news is that these changes just affect the keyword bids for the entire campaign. They do not allow you to adjust the budget or ads for each region. In some cases, you still want to make different campaigns for some locations.

If you are a national company that has never tried to manage bids or budgets by locations, this is a great feature to get you started examining how various locations affect your CPAs so you can start to bid them separately or even target the users differently by location.

Please note, the geographic bid modifier only works with CPC bidding, either manual or enhanced. As with all bid modifiers, it is not compatible with CPA bidding or budget optimizer. The only exception is that you can bid –100% (setting your bid to $0) to not show if the auction uses that bid modifier.

Controlling Budgets

Several years ago, one of the main issues with splitting out your campaigns by region for bidding purposes was that you might have a single budget target, and you didn’t care which region received the click and spent your money, as long as the correct bid was used and you didn’t go over your total budget.

The shared budgets feature fixed this issue for advertisers and created the opportunity to easily use multiple campaigns without fretting over how to split the budget between campaigns.

Some companies have budgets by region. This is common in areas where there are co-op marketing budgets involved, multiple franchise locations, or physical store locations. If you want to maintain budgets by region, then you still want to maintain separate campaigns by region as you cannot split a budget between regions with enhanced campaigns.

If your regions are large, such as the northeast, southwest, and so forth, then you can use bid modifiers within those regions to tweak your CPCs; however, your overall structure of keeping your regions separate for budget reasons is still sound with enhanced campaigns.

Geographic-Specific Ads

One of the main reasons to separate locations into various campaigns is to ensure that the ads speak to that particular geography. The most common instance of this is adding the region to the ad’s headline. However, it is also done to match offline promotions or test responses to offers by region.

If you have split out your campaigns for the purpose of using different ads by region, you will not want to reconsolidate your campaigns as you will lose your ability to specify specific ads by geography. So, if your main reason to use multiple campaigns is for ad serving, you will want to leave your campaigns separated.

Ad Extensions

The last major reason campaigns were split up by region was for extension usage. You might have different sitelinks, offers, or location extensions you wanted to use by campaign. As none of the extensions have a geographic ad serving component (except for the location extension), if you want different offers or sitelinks by region, you still need separate campaigns.

With location extensions, you can decide to bid differently for someone who is within the reach of your location extension. If you first add your location extension as a location target, you can then set a bid adjustment for someone in that radius.

If you have physical locations where you want the customers to come to your business, this is a welcome change as someone who is within a mile of your restaurant is usually worth more than someone who is 30 miles from your location.

Wrap-Up

Enhanced campaign bid modifiers make it easier to manage location-based bids if all your keywords have similar CPAs by region. The ability to set a bid adjustment based upon the user’s proximity to your location is also a welcome change. If you want a simplistic AdWords account, and yet have the ability to set different bids by region, the new enhanced campaign features are a very welcome change.

If you are an advanced advertiser who wants to change budgets, ads, extensions, or individual keyword bids by region, when you upgrade to enhanced campaigns, you will not want to consolidate campaigns just for location targeting purposes. You will still need to consolidate campaigns based upon device types, but you won’t do it for location purposes.

If you have segmented your campaigns by location, you can still take advantage of bid modifiers within the campaigns as locations often have sub-locations (states have metros, metros have cities, etc.) that will commonly have different CPAs by each region which you can micro-manage with bid adjustments. If you are using location extensions, then please take advantage of bid modifiers by location extension reach.

The launch of enhanced campaigns is one of the biggest changes Google has ever implemented, and it will change how AdWords accounts are created, structured and managed. While enhanced campaigns gave additional features to location based bidding, this new campaign type should not force you to reorganize most account structures based solely upon location targeting considerations.

If you haven’t heard about the changes, here is the quick, bullet-point list:

• The ability to set mobile-specific bids will be removed (you can do bid adjustments at the campaign level)
• The ability to target specific mobile devices and carriers will be removed
• The ability to specifically target tablets will be removed and bundled with desktop campaigns
• You can now control ad extensions by ad group
• You can now use ad scheduling for sitelinks
• You can do bid changes by geography (like mobile, this is a simple plus or minus percentage)

Some of these changes are excellent, such as ad group level ad extensions. Others will upset some marketers because they are going to lose lots of mobile targeting options.

Instead of getting on a soapbox and talking about how good or bad the changes are, I’m going to focus on whether or not you should upgrade immediately or hold off upgrading. Eventually, you will have to upgrade to Enhanced Campaigns, but you have several months before being forced to upgrade. Today, we’ll examine what accounts should be upgrading right away versus waiting to make the changes.

Who Should Wait A Long Time To Upgrade

1.  Sophisticated Mobile Accounts

If you are running sophisticated mobile campaigns, you will want to wait to upgrade. I have some accounts where I bid differently by device; device and carrier; and even some that are segmented by device, carrier and geography.

This type of granular control will be completely removed. For these types of accounts, you will want to wait and see if Google makes any changes to the targeting before you must switch to Enhanced Campaigns, and if not, you will want to really think through your upgrade strategy of combining campaigns together.

2.  Mobile Only Accounts

It is not uncommon to see small accounts only target mobile devices. These accounts often have small to medium spends, and they are focused on phone calls. When you examine their spends, they can be profitable by only spending their money on mobile campaigns, and they don’t even run ads on desktops.

In the new world of Enhanced Campaigns, you cannot only target mobile devices. You will set your bids at the keyword or ad group level as normal, and then you can choose to override that bid for mobile devices by decreasing your bid up to 100% (which means you will not be shown on mobile as your bids will be zer0); or, you can raise your bids up to 300%.

That means if you were bidding $15 per click on a mobile device, you must now bid at least $5 for desktop clicks and set your bid boost to 300%. You are going to spend some money on desktops; and therefore, your overall profits will probably decline in this particular instance. These accounts should wait to upgrade.

3.  Tablet Optimized Websites

You cannot target tablets differently from desktops at all. This means that you cannot set different destination URLs for tablets. So, if you have made a tablet optimized website, you will need to make sure that your site detects the tablet and redirects the user to the tablet site.

4.  Vastly Different Desktop & Tablet CPAs

I work on some accounts where tablet clicks are much more valuable than desktop clicks. I work on some where they are about the same. I work on others where tablets have been disabled as they are so much worse than desktop clicks.

With Enhanced Campaigns, you cannot treat tablets and desktops separately, including bid adjustments. Therefore, for accounts with vastly different desktop and tablet CPAs, you will need to start working toward blended bids before you upgrade.

Bid adjustments are only by mobile devices; not for tablets.

Phone Specific Apps

I do want to clarify one point of confusion. I’ve heard from app makers that they are going to have problems promoting their products; and to some degree, this might be an issue. However, you can make app ads that are only shown on an iOS or Andriod device (sorry, no windows targeting yet). So, for your app install, you can target just the device type.

However, if you also run ads for your app that go to your website to showcase how to use the app, those ads will show on any device type. So, if you are only using app ads, upgrading is not going to affect you. If you are using app and regular text ads, then you might wait to upgrade.

These are the types of accounts that should wait to upgrade. There are other account types that will benefit from account upgrades right away.

Who Should Upgrade Now?

1.  Accounts Doing Very Little Mobile Targeting

The downsides to the new Enhanced Campaigns are mostly around mobile. The upsides are bid adjustments and great control over extensions. Therefore, if you are doing very little or no mobile, there isn’t any downside to upgrading to enhanced accounts.

2.  Accounts Struggling With Geographic Bidding

Almost every account has different CPAs and conversion rates by geography. You can see this data in the dimensions tab:

In this account, the CPAs range from $45 to $91 in their top 9 converting cities by absolute conversions. Therefore, this account first did some segmentation by geography into high, medium, and low performing areas in order to set different bids by region. The keywords and ads are identical for each region – only the bids change.

When you make some broad statements that have many exceptions about geographic targeting, most accounts fall into one of a few types:

• Targeting a small area
• A different campaign for every geography to control bids (but not ad changes)
• A different campaign for every geography to control ads (and maybe bids)
• The campaigns are national, or large regions, and even though performance changes by region, you don’t bid separately by region

With the new structure, you can set bid changes by geography for the same keywords by only using one campaign and bid boosts.

Accounts that have struggled with taking advantage of geographic data will benefit from these changes and will see benefits in upgrading their campaigns.

3.  Accounts Segmented By Extension Usage

Ad extensions were campaign level only. Therefore, some accounts are segmented based upon extension usage. If you wanted different site links to appear for certain keywords and not others, then you needed to put these keywords in their own campaigns.

If you wanted one ad to use a location extension, but you didn’t want that same extension in another ad group in the same campaign, then you needed two campaigns. This caused some accounts to grow out of control just because of the extension usage.

The new structure allows you to control most extensions at the campaign or ad group level. Some extensions, such as social, are still only at the campaign level. You can designate some extensions as mobile-preferred and even set up ad scheduling for some extensions, such as sitelinks.

Conclusion

These are some of the more common reasons I’m seeing to upgrade or  hold off upgrading.

There are more reasons to upgrade or to postpone your upgrade. For instance, if you have several thousand campaigns, even if you aren’t doing any mobile advertising, you want to really dig into your tablet and desktop data, conversion rates by geography, keyword overlap, and more before you decide to upgrade and possibly combine campaigns. In that case, it’s not an issue of not wanting to upgrade, it is a matter of thinking through your upgrade plan.

In other cases, when you look at a desktop-only e-commerce site that can now change bids by geography and control extensions by ad group, there is no reason, except for planning, to hold off on the upgrade.

Once you are ready to upgrade, what I would suggest is not immediately upgrading your campaigns at that moment in time. Instead, make a new campaign (it can be paused; it doesn’t have to be live) so you can play with how the bidding changes will work and how the extensions will be controlled. Get some firsthand experience. Once you see how you can control the extensions and the possibilities for bid changes, then think through how you can take advantage of the changes.

Once you are ready to take advantage of the changes, or mitigate the risks in the case of sophisticated mobile advertisers, then feel free to upgrade to the new enhanced campaigns.

With mature accounts with lots of data, bidding isn’t too difficult. It can be as simple as last click attribution, or as complex as using multi-touch attribution models. However, the reason you have options is because you have the data. A new account doesn’t have any data. How can you effectively set bids based upon what you rely on the most – the data – if you don’t have any?

In this column, you’ll look at a few bid methods that can help get you started setting your initial bids.

Setting Bids Based Upon Estimated Conversion Rates

This model attempts to simulate traditional bid models by guessing first at your conversion rates and then using your typical bid formulas to set bids based upon your goals, such as CPA or ROAS. Estimating conversion rates can be very difficult. If you offer a free whitepaper, your conversion rates can vary from 1%-20% based upon your form design. Many companies like to use 2% for e-commerce.

However, it’s common to see e-commerce rates for less expensive items hit 5-10% and for more expensive items be around 0.1%-0.5%. If you have historical analytics data, you that to help you make some good guesses as to your PPC conversions. If you have worked in a vertical before, that can help as you’ll have some background to start with. However, all you are trying to do is reach a reasonable assumption of a conversion rate so you can use your regular formulas to set the initial bids.

So, do some educated guesses and research to come to an estimated conversion rate, and then use that rate to set the bids based upon your CPA or ROAS targets. The method is fairly straightforward. The advantage of this method is that you usually don’t lose too much money (and hopefully make some) when the account first launches.

The disadvantage is that sometimes you launch an account and the traffic is so low that you immediately have to redo all the bids. That brings us to the second bid method, ensuring that you get clicks for the brand new account.

Accumulate Lots Of Clicks To See What Works

In this model, you’re  looking for the most clicks possible so you can determine what is going to work and what will not work. By having some data, you can focus your future energy working in the correct places.

So, your goal is lots of data, clicks, and traffic regardless of how it converts so you can make decisions moving forward. This does not mean you still should not spend time creating you’ll organized ad groups – you must give the system good inputs to get good outputs and useful information. The end goal is data first and profit a distant second for the initial bids; later on those goals can change.

In this model, you can use the estimates from the AdWords Keyword Tool or from the Bing Ads Intelligence plugin to get some starting bid information and use that in the accounts as the starting bids.

What will happen as soon as you put those bids live on AdWords is that some of the keywords will automatically be ‘below first page bids’; even though that was the bid suggestion in the tool. You can then use bulk edit function to raise all the keyword bids to the first page bid.

A note of caution, whenever using a bulk edit tool to raise all keywords to first page bids – always put in a bid cap (upper limit or CPC bid limit in Google’s interface depending on the screen you are working with) so you don’t have a few keywords at $100+ bids. If you really just want lots of clicks; you can even go a step further and use the budget optimizer for the campaign bid.

I find that budget optimizer (AdWords will set my bids to help maximize my clicks…) setting is great for publishers or for just collecting lots of clicks regardless of the quality of the click.

However, as its goal is to get the most clicks possible, if you have a few broad keywords (especially if they are broad matched), those few words could get all your clicks so that your data is not evenly spread throughout the new campaigns.

In the end, with this bid method – you’re taking suggested bids from existing data sources and using them as your starting bids; so there is no guess work involved. The advantage of this method is that you will get lots of data. The disadvantage is that you might not make any money at all; so be prepared to lose some money while you determine what the bids should be based upon your target goals.

The Hybrid Approach: Traffic & Conversions

In this method, you want to estimate conversion rates so that you are hoping to make some money from the initial launch; but you also want to use the existing data from AdWords & Bing (using their cost estimations) to ensure that you will get some traffic.

Start by estimating conversion rates and determining your starting bids. Next, you’ll need to see if those bids are close to page one bids. If they are, then you can go ahead and set the bids live. If they aren’t, then you need to reassess your goals.

For instance, if you do the math and guess that you can start the bids at $1 based upon your estimated conversion rates; but the AdWords tool says almost all the clicks in the industry start at $5-$10; then you might have a problem to overcome. There are some simple questions you need to ask yourself:

• Can you realistically raise the conversion rate?
• Can you raise the target CPA?
• Can you raise the average order value?
• Do you have a business model problem?

Personally, I always go through this bid exercise even if I’m not going to use this bid method as it will point out business model issues. I’ve seen times where the target CPA isn’t possible in an industry and you need to reevaluate how you are making money, the value of a lead, your upsell opportunities, and lifetime customer values in order to be able to be competitive. It’s best to evaluate the business model and how the advertising needs to be executed before spending money.

The advantage of this method is that it will give you a realistic expectation of traffic levels and conversions. The downside is that it might scare you away from keywords that could work you’ll and it can be limiting if you don’t take a few chances with some keywords (which could be at a later date) to see if high bids and competitive keywords do work for the business.

The other downside is that this can be a lot more work prelaunch; but I’ve never thought this exercise was a waste of time. It’s good to have an overall idea of conversions and CPAs before you start.

Just Bid High, Build History, & See What Happens

Another starting bid method is to bid into high positions, ensure you build up a great history for Quality Scores and for the account, and then make adjustments after you get some really good data. This bid method is generally used by three types of people:

• Novices who are new to AdWords and heard bad advice
• People who engage in ‘ego bidding’; and tend to lose a lot of money doing this
• Skilled experts who are bidding this way for a very specific reason and have set aside a budget of money they will lose in order to establish the brand and ads in the search results

The only group that should be using this method is number 3, the skilled experts. The other two should change their starting bid method. This method is not for small budgets nor the faint of heart. There have been accounts we purposefully set aside $25,000-$100,000 as ”play the game money” just to establish a strong history and presence. The money can often be recouped down the road through the sheer volume of clicks that occur at the top of the page.

If you have a small budget, don’t try it. If you are new to AdWords or PPC in general – don’t try it. The reason it can be useful gets into some interesting quality score theory.

There are some of us that believe that Google does not normalize CTR for quality score purposes very well when examining the top versus the side of the page. This group does believe that Google normalizes CTR for quality score by position; but that there are some issues. For instance, among the ads in the top of the page it is normalized well among other ads in the top of the page. Among the ads on the side of the page, the CTR is normalized well for all the ads that are on the side of the page.

However, when comparing top versus side ads, the normalization often gives preference to top of page ads as it underestimates CTRs that occur on the top of the page, and thus giving some of these keywords higher quality scores than they deserve. It’s through top of page exposure that you end up with entire accounts that have 8-12% CTRs through ad testing and keeping most of the keywords (assuming they are profitable) at the top of the page.

Of course, this is only a theory; and one that cannot be proven or disproven without understanding Google’s actual formulas. However, it seems to be true from an outsider’s perspective. The advantage of this bid method is that you can build up a great history so that over time, it will cost you less to maintain these top positions that can bring in a significant amount of traffic. Before you ever try this, you must have very well segmented account and great ads – an exceptional account build is necessary to try this bid technique.

The disadvantage of this bid method is pretty obvious, it can cost a lot of money to bid this way and it will not always work. It is a gamble.

However, for those skilled in the game of PPC and have the budgets to work with – it is a good way to establish a presence. For many companies, playing a long tail or geographic strategy is a better idea than a high initial bid strategy. I add the information here in hopes that more people will realize it is not always necessary to overbid and to caution anyone before attempting to try this on their own.

The majority accounts do not need to start this way; but I commonly hear the advice so I wanted to address it and put it in perspective of other initial bid types. If you have comments on this bid method, or perhaps there will be another columnist who wants to write an article disproving this bid method – I welcome the input and debate (I don’t claim to be right – I just claim it’s a theory that has worked for me for many accounts).

Know Where You Want To Go

One of the tricks to bidding and creating the accounts is knowing how you want your PPC account to mature. If one of your goals is to get to a point where you can try CPA bidding, then you’ll first focus on getting as many conversions as possible, establishing a conversion history, and then letting Google do the work.

This means that you will start with a highly targeted narrow keyword set and try to get traffic and conversions immediately after account launch. If you are launching a new product, and your initial focus is to drive product awareness, then often you want lots of clicks and impressions across a wide variety of keywords, and then in a few months you’ll switch to a more ROAS focused approach. This account would use a lot more modified broad match and broader keywords to attain those goals than the account focused on conversions.

In the famous words of Lewis Carroll: “If you don’t know where you’re going, any road will get you there.” You need to know where you’re going, and setting initial bids is just the beginning of the journey. However, set the initial bids based upon the road that you do want to travel.

Conclusion

There are many ways to set initial bids; including ones I didn’t even mention such as the $1/$5/$10 method in which every ad group starts with a semi-competitive number just to see what happens or the ‘instinct method’ where you’ve been doing PPC for so long, you’re just good at guessing some initial bids and don’t even bother to look up any numbers before setting the first bid.

Personally, I feel the hybrid approach is the best method for most companies. It will help to ensure you can get some traffic and to see if you can hit your target CPAs with your keywords, bids, ads, and landing pages. When you first start accounts, you usually make few adjustments in the first week to month (depending on account size) as you are accumulating data to determine bids, negative keywords, tests, etc that you need to set bids that have a chance of giving you the data necessary to work with so that later on in the account’s history you can make data-driven decisions.

Picking one of these solutions should help you find a way to set initial bids so you can take your PPC account from the beginning of the journey to a place where you are making informed, data-driven decisions.

When CPA bidding first rolled out in 2007, you needed at least 300 conversions in the past month for it to work. Over the years, Google has improved the algorithms to the point in 2010 that you only needed 15 conversions in a campaign over the past 30 days to enable this setting.

However, I always found that no matter what Google’s minimum conversions, the tool failed more often that not if you didn’t have roughly 150-200% of the minimums needed – until very recently. Now, I’m seeing a different story with CPA bidding.

Small Account CPA Bidding Case Study

I was working on an account where most campaigns were averaging 15-20  conversions per month. The data was sporadic and inconsistent. One month, certain words would get a conversion and the next month, a completely different set of words would get a conversion.

There were very few words that would receive a conversion every single month; and the words that did have these consistent conversions were often higher than the target CPA for the account.

Typical Month

The target CPA was $65 per conversions. Only one campaign had exceeded this CPA. Every single other campaign was significantly higher than this goal. To turn this account around, I went through several steps:

Step 1: Build A New ‘Optimized’ Campaign

The first step is to take all the data and create a very granular, organized campaign that used the best features of the data from the past several years. This was to be a benchmark campaign of what was possible.

Due to some very high bids that were risky to try in a new campaign and items working ‘well enough’ in the other campaigns, some of the other campaigns were tweaked a little to show the difference between well-organized and the typical campaigns; but were left to continue running to mitigate any transition risk.

This is why many columns talk about organization, and they are right to do so; just going through this step increased the total conversions significantly (50 to 112).

Month 1 Data:

Tweaking some settings, such as adding negative keywords, removing poor keywords, finishing some ad tests, moving some budgets around, etc., resulted in the account more than doubling it’s conversions, and lowering the CPAs.

However, the ‘new campaign’ with the ‘proper’ organization immediately hit the CPA goals while bringing in an additional 18 conversions, which is a large increase since the account only had 50 conversions in the previous month.

Step 2: CPA Bidding

In the second month, some minor tweaks were made; but, the biggest change was turning on CPA bidding for a few campaigns.

Month 2 Data:

Once CPA bidding was enabled, the conversion rates went up by 0.7%, which is a nice, but not a huge increase. The CTR dropped a touch, which is not uncommon to see.

However, the total conversions increased by 40 with a $10 reduction in CPA. That’s what CPA bidding can often do for smaller accounts. No longer are the conversions hovering at the 15-20 range where you might not be able to use CPA bidding, but they have increased enough where Google does have more data to work with.

Step 3: Ad Rotate: Optimize For Conversions

I’m a huge fan of ad testing, and usually use one of the ‘rotate’ features for testing purposes. However, this was a small account, and I wanted to see how good the ‘optimize for conversions’ would be in a small account.

In addition, I had consistently heard from people who had tried these small CPA tests before that it was often working for a few weeks; but then, the volume dropped so much they had to stop using the biding option. In order to keep building the conversion numbers so that wouldn’t be a trap, I then enabled ‘Optimize for Conversions’ in the ad settings:

Now beyond that, other things were being done inside the campaigns, such as adding negatives, removing some very very poor performing words, testing extensions, and so forth; but, the largest change was the ad serving.

The ‘optimize for conversion’ setting had an unexpected result – it not only increased the conversion rates, it increased the CTR in a few campaigns:

Month 3 Data:

The ‘well organized’ campaign amazingly went from a 5.64% CTR to a 10% CTR with optimize for conversions. Other campaigns increased in CTRs as well; however, not to quite the same levels. This seems so strange to me that I’m still testing this setting in some other campaigns to see if this is somehow a  common side effect.

As CPA bidding is suppose to just set bids on keywords, and ‘optimize for conversions’ is suppose to just serve ads; it seems very odd to see a CTR difference of this magnitude.

The overall conversion rates went from 3.24% to 5.09%, with the ‘well organized campaign’ going from a 2.97% to a 4.99% conversion rate.  That’s a very nice increase since it only takes 30 seconds to change the ad rotation setting from one option to another one.

The other dramatic change was the PLA campaign went from a 5.77% conversion rate to a 11.30% conversion rate. That’s an amazing difference in a PLA campaign where very little work is being done on the management side.

The Results

This is the overall result of one good campaign (the other campaigns weren’t touched outside of some basic items such as adding negative keywords and manipulating the budgets) and conversion optimizer during a 90 day period:

• Conversion rates: increase from 1.94% to 5.09%
• CPA: decreased from $101 to $44
• CTR: increase from 3.21% to 3.46%
• Total budget: increased $4,600
• Total conversions: increased from 50 to 216 per month

Most of these campaigns are also limited by budget, so the next step is to open up the budgets and see with just budget manipulation if the total conversions can more than double again (at the same CPA). After that’s done, it’ll be time to reorganize some of the older campaigns, test serving the ads on more hours of the day, and of course, do some landing page testing.

I’ve now tested CPA bidding in a few smaller accounts, and I’m seeing similar results. Even with 15-20 conversions, conversion optimizer is working more often than not; and, if it works early on, then the total number of conversions often goes up causing it to be even better in later months as it has more data in which to work.

CPA bidding being successful for small accounts is a huge change from last year when it failed more often than not. No longer do the advanced tools such as CPA bidding have to be relegated to just large accounts (where it almost always consistently performs well) – small accounts can try some of these more advanced tools as well.

The total amount of time put into this account’s rise to success is roughly 20 hours over 90 days. Even if no other changes were made in the account to help conversions, the account is looking to spend about double in 2013 than in 2012, but with over quadruple the conversions. That’s a pretty good 20 hours of work; and, its mostly due to proper organization, an execution and testing strategy, and Google’s CPA Bidding option.

If you have struggling small accounts, test CPA bidding and ‘optimize for conversions’ ad serving, the results might surprise you.

• Writing new ads
• Turning on one of Google’s ‘optimize’ features
• Letting Google serve your ads
• Writing new ads
• Let Google serve your ads
• repeat…

However, I find this is a very common testing method. There’s a big problem with this method: there’s no delete. Just by deleting ads, you can increase your account efficiencies significantly.

I recently saw a few accounts where just by picking winners, their traffic and conversions increased from 30% to almost 300%. That’s right, hitting the delete button was the best optimization that could be done in the accounts.

How Google Serves Multiple Ads

First off, you must choose how Google is going to rotate your ads. My personal preference is rotate indefinitely as I’m a testing control freak. However, there are times that using one of the ‘optimizes’ is a good idea.

Now, if you have more than one ad in an ad group; and you are using Optimize for Clicks or Optimize for conversions; then Google will start to show a winner more often. You can see this under the % Served in the ads tab.

However, Google will never show an ad 100% of the time if you have multiple ads in an ad group. They will also show the other ads some percentage (even if its small) to make sure another ad shouldn’t be displaying more often based upon your settings.

Therefore, if you are just creating ads, and never deleting them, your losers are still showing (potentially a lot) if you have lots of ads.  Therefore, I wanted to show two quick examples of where deleting helped accounts more than any other change to their account.

A Quick Case Study

The first account averaged 19 active ads by ad group. Some ad groups had more than 50 active ads in them.

The account’s goal was simple, get the most clicks possible. They were a publisher and they monetized their site with CPM ads and paid content subscriptions. Because their bids were lower than their CPM take, every single click was profitable. Therefore, they wanted to get the absolute most clicks possible for their target bids.

When you look at the ad percentage served (this is ad group level), the absolute best ad was only being shown 14.88% of the time. The second best ad 4.10%, and the 3rd best 3.37% and so on. That means the top 3 ads in terms for CTR, their main goal, are being displayed about 22% of the time.

In this ad group, the CTRs ranged from 6.8% to 1.2%. Ads with under a 2% CTR were being shown roughly 30% of the time. Ads with a CTR higher than 6% were showing roughly 24% of the time.

So by deleting many ads, this single ad group almost tripled in total clicks. As every click was profitable, that’s a lot of money to be had just by hitting the delete button.

In this case, the goal was traffic, but it could just have as easily been conversion rates, Profit Per Impression, or another metric that’s important to your overall success.

Misaligned Ad Serving Goals

The other big issue that occurs is that your goal is conversion focused, but you are using Google’s default settings for optimizing for clicks. In that case, the ads with the highest CTRs will be shown more often and not the ads with the highest conversion rates or the lowest cost per conversion.

In this case, you can delete the losers, or even just be lazy and change the setting to show ads with the highest conversion rate the most.

In this account, the ad with the highest ad serving percentage, had one of the lowest conversions rates.  However, because it had the highest CTR, Google was showing it more than any other ad. The ad with the highest conversion rate was being served less than 10% of the time.

Just by hitting the delete button, this account raised its total conversions quite significantly. It was a very profitable day by just hitting the delete button.

If The Default Setting Isn’t Right For You – Change It

The default ad setting is to optimize for clicks. If you are looking for the most traffic, this is a good setting. However, if you are a testing guru and want to make sure that your ads rotate evenly so you can use Conversion Per Impression or other testing metrics to determine your winners, you will want to use the rotate evenly setting.

If you want the most conversions possible, and are not going to closely watch your ad tests, then use optimize for conversions.

Each setting has its place. If you are serious about testing, you will use rotate evenly the most. However, if you realize you want to be serious but you don’t have the time, then just make sure you are using an ad rotation setting that is in alignment with your overall goals.

Wrap-Up

You must test ads – that’s a PPC requirement for any account that wants to grow and improve.

Even if you have a large account, enterprise ad testing can be easy once you have a strategy in place.

However, most companies don’t have a good strategy in place for testing ads regardless if it’s a small account or a large one. It’s time to put a strategy in place, and when you do create it, make sure that ‘deleting losing ads’ is one of the steps in your testing workflow.

In today’s column, we’ll examine the most common testing techniques and why they are rarely successful, and then address how to test ads across large accounts.

Common Testing Techniques For Large Accounts

One of the most common is to create lots of ads. Turn on ‘optimize for CTR’ or ‘optimize for conversions’ and let Google pick the winners. The problem with this method is that losers are rarely deleted.

Even if Google is optimizing your ads, they will show your losers some of the time. This makes your ad serving sub-optimal as just by deleting losers, you can increase the overall account efficiency several points.

Another common testing method is to only test the head terms or the most expensive terms. This makes it so you are spending time testing where you are spending money, but most of your ad groups never get tested so the majority of your keywords never improve.

Test when you feel like it. This is often a workflow problem and just by creating a testing schedule you can improve your ad testing dramatically.

The vast majority of large accounts do not have an easy method to test all of their ads, and the problem is often identification of what needs to be tested.

The Initial Problem: Identifying Test Parameters

When most accounts are new, they are usually attempting to increase a single conversion type: sales, subscriptions, lead generation, etc. As accounts grow, they often end up with multiple conversion types. Each ad group should be driving users to a single type of conversion type.

However, the actual conversion type may vary between ad groups. Unless you have an easy way to understand the goal of each ad group, you cannot test ads that are focused around the ad group’s end goal.

In addition, not all keywords are created equal. Some keywords are trying to drive engagement at the top of the buying funnel. Other keywords have their success measured by direct conversions. Some keywords will be brand focused, others will have product names, and yet others will be generic or have other qualifiers attached to them.

Therefore, what we need is a system to easily label ads based upon their end goal, keyword types in the ad group, and other parameters of which you wish to test.

AdWords Labels

AdWords labels makes it very easy to identify the purpose of your ads and ad groups once you know their overall purpose. First, make a list of everything you need to know about your ads so that you can test and determine your winners. These labels will be your end testing segments.

Next, for each ad, you will want to label them appropriately.

An ad might have more than one label. You might have some ads that are: brand, newsletter, high funnel; and other ads that are product, e-commerce, non-brand. The labels should make it easy to segment your ads so you can analyze all brand ads, or only brand ads that have an end goal of an e-commerce checkout.

When you consider how you want to read the results and the types of ads you want to compare against each other, the types of labels you will apply becomes easier to think about, create, and manage.

Testing Ads At Scale

Once you have the labels created, then you can use simple pivot tables to analyze the ads. I created a video for a previous column in how to easily test ads across ad groups. While the video was based around analyzing small accounts, the concept of using pivot tables to analyze ads across ad groups also applies to large accounts. You can see the video in this column: Step-by-Step Instructions For Testing Low Volume Ad Copy.

Once you have your labels created and data for the ads, then you can simply analyze how ads are performing for a label type or label combination:

When you use a pivot table to analyze ads, it is best to use very consistent lines within the ads so you can easily analyze them at scale. For this type of ad  creation, I’d recommend using a tool such as the Mass Ad Creator.  These types of tools allow you to easily create tens of thousands of ads that can be easily analyzed by pivot tables.

When you use a pivot table in this manner, you will want to examine the ads that are doing the best so that you can keep them and delete the losers. In addition, you will also want to examine the data at the ad group level.

By creating a benchmark of ‘average’ (known as Grand Totals in this chart – the total of all conversions, but the average conversion rate, CPA, and CPI across these ads), you can see the ad groups that are below the account average for a label so you can address the ad testing in those ad groups individually.

Create A Testing Schedule

Since you might have tens of thousands or even millions of ads, you can’t just test ads once a month. You need to create a testing schedule based upon your labels. You can do this in a calendar or project management system.

By creating a testing schedule based upon your labels, you can make sure that you are testing all the types of goals and keywords throughout your account.

Conclusion

Ad testing is fairly easy in small accounts. With mid-sized accounts it can start to get complex, and with large accounts it can become very difficult unless you have a process in place to test, measure, and refine your ads.

By using AdWords labels, pivot tables, and a testing schedule ad testing can be simple even for massive accounts. It does take some organization and discipline to to use this methodology well. However, once you start to regularly test all the ads in your account – your paid search accounts will grow and become much more effective.

As accounts grow, offers change, websites change CMSs, accounts start to get out of shape.

AdWords is now over ten years old. Many accounts have a decade of changes and additions which have grown out of control and lose their focus.

In today’s column, I’m going to address some of the most common ways that accounts get out of control so you can get them back into prime shape.

Old Ad Tests That Are Still Running

So, we all know by now that you should be testing ads. Many people are good at setting up tests and even declaring winners every few months.

However, after a while, other job duties get in the way and those tests keep running indefinitely. This causes Google to eventually pick a winner for you. Optimization means you have control over your account – not Google.

Recently, I was looking at an account and this was how the advertiser did its ad testing:

• Turn on optimize for clicks
• Write ads
• Let Google serve ads
• Wait 2 months
• Write more ads
• Let Google serve ads and pick a winner
• Repeat

There’s a big step missing: deleting the old ads.

There were search ad groups with more than 40 active ads in them. I thought this was an anomaly, until I ran into another account that averaged 19 ads per ad group. While some display campaigns might have that many because of different image sizes and themes, this is a no-no for search.

Because Google doesn’t serve the winner 100% of the time, the advertiser’s winning ads were were being served 70% to 80% of the time. All the advertiser did was delete the losers (it took a long time to find them all) and its overall clicks and revenue jumped almost 15%.

Ad testing is essential and so is declaring a winner and removing the losers.

Outdated Offers

I recently did a search and saw an ad for a TV that mentioned a Memorial Day special. Memorial day was 5 months ago. Using special offers, pricing, and events in your ads is a great thing to test. But often these ads are short-term ads, and once the special has passed, they need to be paused until next year.

This is often the problem of putting prices in ads. If you use the API AdParamService, it you can easily update prices in ads. However, most accounts don’t use the API.

Therefore, if you are going to put prices and specials in your ads, make sure they are relevant. If someone sees a $99 price point in an ad and a $129 price on your page, your conversion rates will suffer.

Broken Pages

Sites change, pages get updated, 301 redirects get missed, and eventually you will send traffic to pages that don’t exist. I know one large account which is happy if more than 75% of its clicks go to pages that have content on them. Yep, they are happy when only 25% of the clicks are wasted.

It’s not hard to check your PPC accounts for broken links, but most account managers do not regularly go through this exercise unless there is a major site update. You should be checking all your destination URLs (ads, extensions, keywords) for broken links on a regular basis.

Negative Keywords

Some negatives are added to shape an account so the correct ad shows. Some negatives are added because the word doesn’t convert anywhere in the account.

There’s always a reason you added a negative, but can you remember them all?

I often see when ad groups are ‘optimized’ that the negatives are forgotten. Suddenly, you’re trying to determine why a keyword isn’t showing, and its because of the negatives you added.

Other times, you added a negative because you didn’t offer the product, and now you do, but no one bothered to remove the negatives. Unless you are diligent about checking all your keyword stats, you might miss the fact that some aren’t showing.

There’s a simple set of rules to follow with negatives:

• If you never want the word to show anywhere in your account, add it to a negative keyword list and apply that list to all your campaigns
• If you don’t want that word to show for a campaign, make it a campaign negative
• If you don’t want that word to show for just an ad group, then make it an ad group negative

Unfortunately, most negatives are added at the ad group level. This just forces another ad group to display for the bad query instead of removing yourself from the query altogether.

Auditing, organizing, and controlling your negative keywords can drastically make your life better when diagnosing  and fixing ad serving issues.

Negative keyword lists are underappreciated and underused. If you look at your campaigns, and almost all have the exact same number of negatives in them, then you usually have a problem.

This is usually indicative that negative keyword research was done once or twice and abandoned. In these cases, negative keyword lists can save you time, so you are more likely to add negatives when it’s appropriate to all your campaigns by just applying the same list in multiple places.

Duplicate Keywords

This is one of the biggest issues with large accounts which might have five or twenty ad groups that can show for a keyword.

Suddenly, your stats are very polluted because the same queries are going to different pages, the users are seeing different ads, and you try to start adding negatives everywhere. This can sometimes cause even more problems, as suddenly you aren’t showing for some queries at all anymore.

Take your search query data and put it into a pivot table. Then add the ad groups to the table and see how many different ad groups a query has shown from. In this account, the worst offending query has been shown from 140 different ad groups.

Sometimes You Have To Overhaul The Entire Account

Most people will do anything not to restructure the account. It is a lot of work. That’s why when you take your car into the mechanic and a complete engine overhaul is mentioned, many people balk at the price and drive away in a car that doesn’t work well.

However, if you let the mechanic overhaul your engine, when you drive away, your pocket will be lighter, but you will also remember how fun it was to drive your car when it was new.

That’s what a complete overhaul will do. You have lots of data to work from, so you can take all your data to determine your idea structure, match types, ads, extensions, etc.

The advantage of overhauling an account and making a completely new structure is you are doing it from years of data instead of instinct, like you do with a new account. The work is hard, but the results are usually worth the effort.

Tuning Up Your Flabby PPC

My fellow columnist, Matt Van Wager, had a great idea for a sessions at SMX: Pumping Up Your Flabby PPC Pecs. If you’re around SMX East, you will want to attend this session. I’ll be diving very deeply into negative keywords, and my fellow panelists will be giving other tips on how to take your PPC accounts and overhaul them so they work like new once again.

Yet, with all this inventory, many marketers fail with display marketing.

The major reasons are they either are trying to reach the incorrect goals or they don’t understand how all the targeting options work.

In this article, I’m going to walk through how to get started with display advertising so you can avoid some of the most common mistakes that cause marketers to fail with the network.

Display Keywords

Most marketers just use Google’s default option for display – add some keywords and see what happens. Often, these are a list of the account’s search keywords. This is a mistake.

For search, Google really cares about your match types for both positive and negative keywords. In display, Google ignores match types. They will use negative keywords to help them with the ad placement, but if you just import thousands of negatives from the search campaigns, often Google will not do a good job serving your ad.

Usually, you want just a few keywords in an ad group; and there will be times you will not even use negative keywords for display, which is a cardinal sin for your search campaigns.

In the past, Google favored a theme based approach to choosing display keywords. Over the past few months, they have been giving a lot more emphasis to individual keywords. This has made it easier to take your search keywords and run them on display, but it’s still not a perfect system.

So, a good starting place for display keywords is to take the broader search keywords (the 2-3 word variations, not the 6 word combinations) and duplicate them in a display only campaign. If you have a few negative keywords you really want to use – feel free, but do not import your thousands of negatives into the display campaign.

Keyword Segmentation

The biggest problem with most search ad groups is that there is no granular organization between the ads and the keywords. This is just as true on display.

When you are creating display ad groups, first determine the ad and landing page for each ad group. After that is determined, then use keywords that match both the ad and the landing page. If a keyword doesn’t match both, it needs to be in a new ad group. This segmentation is good for both search and display.

However, if you just target your display ads based upon keywords, not matter how good the keywords are, then you might find your ad on a large variety of sites. Some might bring you good results, others will fail, but you don’t really know if it’s the site’s traffic or the offer – your ad and landing page.

Placement Targeting

AdWords offers a lot of targeting options for display. One of them is known as placement targeting. With placement targeting, you can choose an ad placement on a site within the Google Display Network and only show ads on that particular site or ad slot.

Using placement targeting takes the guess work out of the main keyword problem: Is it the site or the offer that isn’t converting?

If you use a research tool, such as doubleclick Ad Planner to find placements where your ideal customer spends time online, then you can ensure your ads are only being shown to your top prospects.

The largest issue with placement targeting is some of the best sites have a large variety of traffic and customers. Targeting NYTimes.com or About.com will lead to a tremendous amount of impressions, many of which are not valuable for your offer.

With placement targeting, you can target a section of some sites, such as the business section on the New York Times; however, even that section has so many daily page views that most companies can’t afford to run an ad on every page view.

Therefore, what we really want to do is to choose placements where our audience spends time, but also layer-in a keyword filter.

Flexible Targeting

This is where the real magic of display targeting comes into play. With flexible reach, you can easily combine multiple targeting methods together so that you ad is only shown when a user hits certain targeting combinations. This option is still fairly new; but it will one day be the default option.

With flexible reach, you can set your targeting so that the ad is only display if a user is on a placement you choose and the article matches your keyword selection.

With the combination of display keywords and placements, you should be certain that the placement is not the problem if you don’t receive conversions – it’s a hand picked placement.

If you have segmented and chosen your top keywords, then the keywords should not be the problem. However, always check this by examining the actual URLs of the pages where your ads are being shown. If they are not appropriate, then you should refine the keyword list.

So now we’ve taken the variables of placement and keywords out of the equation. Therefore, if the offer doesn’t convert – its probably the offer.

Offer Testing

With the display network, you are not always reaching a user who is far down in the buying cycle. In some cases you will reach users far in the buy process, in other cases you will not.

Therefore, you need to test your offers between hard conversion activities, such as sales, versus soft conversion activities, such as white paper download and email subscriptions, so you can find what is going to work best for your display objectives.

Please note, as you become more sophisticated with display and add additional targeting options, such as remarketing, then you may be running different offers by targeting type or placement.

Before you can get to that point, you need to make sure that you can find the simplest of combinations that will allow you to attract new customers using display targeting.

Conclusion

The display network offers a tremendous amount of targeting options, control, and inventory. However, if you don’t find an offer that works across the display network, then you will end up wasting money and come to the conclusion that the display network doesn’t work.

This is rarely the case. It does happen on occasion that display advertising doesn’t work for a company. However, most companies can find success with display, if they first find an offer that works.

The best way to find what offer will work is to take out the ad serving variables, such as site quality and user interest. By using flexible reach and only targeting articles that match your keywords on high quality sites, you can remove the variables. Once those are removed, what you are left with is the offer.

Then, by doing some simple offer testing, you too can find success with display advertising.

Learn More About Display Targeting

SMX East is fast approaching. The day before SMX, I’ll be teaching AdWords marketing for a full day workshop. Part of that day will encompass display targeting. If you’re still trying to find display success, or you want to really ramp up your display campaigns, we will spending some time going over display and some of the fun things you can do with the network. Learn more about the SMX East AdWords Workshop.