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Larry Kim, Founder/CTO, WordStream

CONFIDENTIAL – DO NOT DISTRIBUTE

1
Today’s Agenda
• What’s a good Click-Through Rate?
• Why does CTR matter?
• Review: The Top 1% of PPC Ads
• What makes them tick?
• How can I replicate them?
• What does it all mean?

Larry Kim (@larrykim) #wordstream
Speaker Introductions
• Larry Kim
– Founder, CTO, WordStream, Inc.
– Been doing PPC & SEO for 10
Years!

– Provider of 20 Minute PPC Work
Week and AdWords Grader
– #1 PPC Expert According to PPC
Hero!

Larry Kim (@larrykim) #wordstream
Take Part in Live Blogging on Twitter / Google+
Include the hashtag #wordstream in your
Twitter tweets, Google+ status updates, etc.

Larry Kim (@larrykim) #wordstream
Let’s learn a little about you….

Larry Kim (@larrykim) #wordstream
Live-Poll Question
How Long Have You Been Using AdWords?
a)
b)
c)
d)

Less Than 1 Year
1-2 Years
3-5 Years
Over 5 Years

Larry Kim (@larrykim) #wordstream
Most of the Ad Testing Stuff You Read is CR*P

Your Doing PPC Wrong
• Platitudes
• Bad Advice
• Dumb Examples

CONFIDENTIAL – DO NOT DISTRIBUTE

7
The Ad Testing “Experts”
Are All Wrong
Warning: Lots of Data
Ahead!
Epiphany #1:
An Example
A/B Ad Test
Live Poll Question: Which Ad Wins?
a) Ad A
– 32,423 Impressions
– 453 clicks (1.4% CTR)
– Average Position: 2.8

b) Ad B
– 36,223 Impressions
– 760 clicks (2.1% CTR)
– Average Position: 3.0

Assumptions:
• Both ads were running during the same time period
(last 7 days), ads “rotating” evenly on the Google
Search Network.
Larry Kim (@larrykim) #wordstream
Trick Question! Both Ads Suck.
• Neither ad is worth declaring a “Winner”.
• Not even the 2.1% CTR in the 3.0 Avg. Position.
• Why?

Larry Kim (@larrykim) #wordstream
What’s a Good CTR?

Larry Kim (@larrykim) #wordstream
Survey Methodology

Larry Kim (@larrykim) #wordstream
• Even the “Winner” is a Loser!

Forest vs. Trees
CONFIDENTIAL – DO NOT DISTRIBUTE

15
Even the “Winning” Ad is a Loser!

Larry Kim (@larrykim) #wordstream
Epiphany #2:
What’s a Good CTR?
What’s a Good Search CTR? (Account Avg. CTR’s)

Larry Kim (@larrykim) #wordstream
But… Lots of Variance!

Larry Kim (@larrykim) #wordstream
Winners vs. Losers

Larry Kim (@larrykim) #wordstream
Junky vs. Unicorns

Percentile

Vs. Expected CTR

Name

Bottom 50%
Top 15%

Below Expected
CTR
2X Higher

“Junky
Advertisers”
Awesome
Advertisers

Top 5%

3x Higher

Top 1%

6x Higher!!

Super Awesome
Advertisers
Unicorns

Larry Kim (@larrykim) #wordstream
Unicorns?! (6x Avg. CTR!)
@larrykim
What Unicorns (Top 1%) Look Like

Larry Kim (@larrykim) #wordstream
Epiphany #3:
Why Unicorns Matter
(How AdWords
Works)
How Quality Score Impacts Ad Position

Larry Kim (@larrykim) #wordstream
How Quality Score Impacts Actual CPC

Larry Kim (@larrykim) #wordstream
What’s an Average Quality Score? Around 5.1/10

Larry Kim (@larrykim) #wordstream
CONFIDENTIAL – DO NOT DISTRIBUTE

29
Cost Per Conversion is Largely Based on QS

Larry Kim (@larrykim) #wordstream
The Impact of Quality Score on Cost Per Conversion

Larry Kim (@larrykim) #wordstream
Epiphany #4:
How is Quality Score
Really Calculated?
How is QS Really Calculated? Mostly CTR.

Larry Kim (@larrykim) #wordstream
Relationship Between CTR and QS?

Larry Kim (@larrykim) #wordstream
Epiphany #5:
It’s All Relative
What’s an Expected (or Average) CTR?

Larry Kim (@larrykim) #wordstream
QS Based on Your CTR vs. Expected CTR!

Larry Kim (@larrykim) #wordstream
Epiphany #6
Quality Score
Cracked.
Now What About
Those Unicorns?
Ad Text Testing

Hunting Unicorns

• Same Story – 20% of Ads Generate 92% of Spend
• 20% of Ads Generated 65% of Impressions
• But CPA, CTR, and Conversion Rates vary
@larrykim, @perrymarshall
1. Keywords With High Commercial Intent

Larry Kim (@larrykim) #wordstream
2. Dynamic Keyword Insertion (DKI)

Larry Kim (@larrykim) #wordstream
2. DKI Doesn’t Produce As Many Unicorns

Larry Kim (@larrykim) #wordstream
3. Ad Extensions Impact on Quality Scores

Larry Kim (@larrykim) #wordstream
3. Ad Extensions Impact on Click Through Rate

Larry Kim (@larrykim) #wordstream
Epiphany #7
How To Write
“Unicorn” Ads
4. Most Ads Suck. Create Emotional Ads.

47
Creating “Emotional” Ads
Example

Larry Kim (@larrykim)
Versus…

Larry Kim (@larrykim)
Epiphany #8
A Few Notes on
Effort…
Relative Abundance

Name

Percentile

Relative
Abundance

Vs. Expected
CTR

Awesome
Ads
Super
Awesome
Ads
Unicorns

Top 15%

1:6.7

2X Higher

Top 5%

1:20

3x Higher

Top 1%

1:100

6x Higher!!
Larry Kim (@larrykim)
Epiphany #9
You Need To Test
100 Ads To Find 1
Unicorn
You’re Not Testing as Many Ads as You Think…

Larry Kim (@larrykim)
Most Small Businesses are Lazy…

Larry Kim (@larrykim)
Epiphany #10
It’s Not as Hard As
You Think
85% of Impressions are From 5% of Ads

Larry Kim (@larrykim)
Epiphany #11
A Note on Mobile Ads
Calls are Worth Way More Than Clicks
• The calls from mobile traffic converted
at a 3x higher rate than clicks to a
website
• Mobile Ad Testing should
be based on call rate, not
CTR or Conversion Rates

Larry Kim (@larrykim)
Epiphany #12
What Does It All
Mean? How to Scale
Your PPC
A Quick Recap
1. Above Average CTR Keyword/Ads = Great
Success.
2. Below Average CTR Keyword/Ads = Train Wreck
3. So … Delete the bottom third of your account
and re-deploy that spend to remarketing

Larry Kim (@larrykim)
Average CPC’s by Industry and Network

Larry Kim (@larrykim)
Average Conversion Rates by Industry

Larry Kim (@larrykim)
Average CPA’s for Search & Display, by Industry

Larry Kim (@larrykim)
Summary / Key Takeaways:

• What’s a Good CTR?
• How is Quality Score Calculated and Why Does it
Matter in Theory?
• Review: Unicorn account vs. Junk Account
• What Makes a Unicorn Tick – 5 Common
Ingredients and Workflow To Create Them
• What Does it all Mean: How to Modify your PPC
strategy for best results.

Larry Kim (@larrykim)
Special Thanks
• Perry Marshall (@perrymarshall)
– Author of the most popular AdWords book in
the world.
– #1 author and world’s most-quoted
consultant on Google Advertising
– Published thousands of articles on sales,
marketing and technology
Grade Your Quality Score with The AdWords Grader!
•

A free, instant PPC audit in
under a minute!

•

Grades your AdWords account
performance based on the 8
PPC metrics that really matter

•

Compares how you’re doing
against other accounts of
similar size (monthly spend)

www.wordstream.com/google-adwords
Larry Kim (@larrykim)
WordStream’s
20 Minute PPC Work Week
• We find all the low hanging
fruit in your account
• You just review / approve the
findings.
• Quick. Easy. Powerful.
• 20 Minutes a Week can
improve your ROI on
AdWords by 20% or more!™

www.wordstream.com/ppc-free-trial
Larry Kim (@larrykim)
New: Leads & Landing Page Management Software

www.wordstream.com/ppc-free-trial
@larrykim
Special Offers! Would you like…
a) A FREE live demo of WordStream PPC Advisor
b) Get a 1-on-1 AdWords Grader walk-through with a
PPC expert
c) Nothing at the moment

Larry Kim (@larrykim)
Your Questions
Thank you for attending
WordStream’s webinar!
Benchmark your AdWords account today!
http://www.wordstream.com/google-adwords
Or contact us directly:
Larry Kim
lkim@wordstream.com
http://twitter.com/larrykim

Larry Kim (@larrykim)

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