Successful Software

One of the keys to success in Google Adwords (and other pay per click services) is to write good ad copy. This isn’t easy as the ads have a very restrictive format, reminiscent of a haiku:

• 25 character title
• 2×35 character description lines
• 35 character display url

Whats more, there are all sorts of rules about punctuation, capitalisation, trademarks etc. You will soon find out about these when you write ads. Most transgressions are flagged immediately by Google algorithms, others are picked up within a few days by Google staff (what a fun job that must be).

Google determines the order in which ads appear in their results using a secret algorithm based on how much you bid, how frequently people click your ads and possibly other factors, such as how long people spend on your site after clicking. Nobody really knows apart from Google, and they aren’t saying. The higher your click frequency, generally the higher your ad will appear. The higher your ad appears in the results, generally the more clicks you will get. So writing relevant ads is very important. This means that each adgroup should have a tightly clustered group of keywords and the ads should be closely targeted to those keywords.

There is no point paying for clicks from people who aren’t interested in your product, so you need to clearly describe what you are offering in the few words available. For example you might want to have a title “anti-virus software” instead of “anti-virus products” to ensure you aren’t paying for useless clicks from people looking for anti-viral drugs (setting “drugs” as a negative keyword would also help here).

I have separate campaigns for separate geographic areas. Each campaign contains the same keywords in the same adgroups, but with potentially different bid prices and ads. This allows me to customise the bid prices and ads for the different geographic areas. For example I can quote the £ price in a UK ad and the $ price in a US ad. Having separate campaigns for separate geographic areas is a hassle, but it is manageable, especially using Google Adwords editor.

Writing landing pages specific to each adgroup can also help to increase your conversion rate. It is worth noting that the ad destination url doesn’t have to match the display url. For example you could have a destination url of “http://www.myapp.com/html/landingpage1.html?ad_id=123″ and a display url of “www.myapp.com/freetrial”.

Obviously what makes for good ad copy varies hugely with your market. Here are some things to try:

• a call to action (e.g. “try it now!”)
• adding/removing the price
• different capitalisation and punctuation
• keyword insertion (much beloved of EBay)
• changing the destination url

But, as always, the only way to find out what really works is testing. Google have made this pretty easy with support for conversion tracking and detailed reporting. I run at least 2 ads in each adgroup and usually more. Over time I continually kill-off under-performing ads and try new ones. Often the new ads will be created by slight variations on successful ads (e.g. changing punctuation or a word) or splicing two successful ads together (e.g. the title from one and the body from another). This evolutionary approach (familiar to anyone that has written a genetic algorithm) gradually increases the ‘fitness’ of the ads. But you need to decide how to measure this fitness. Often it is obvious that one ad is performing better than another. But sometimes it can be harder to make a judgment. If you have an ad with a 5% click-through rate (CTR) and 0.5% conversion rate is this better than an ad with a 1% click-through rate and a 2% conversion rate? One might think so ( 5*0.5 > 1*2 ) but this is not necessarily the case. I think the key measure of how good an ad is comes from how much it earns you for each impression your keywords get.

I measure the fitness by a simple metric ‘profit per thousand impressions’ (PPKI) where, for a given time period:

PPKI = ( ( V * N ) - C ) / ( I / 1000 )

V = value of a conversion (e.g. product sale price)

N = number of conversions (e.g. product sales) from the ad

C = total cost of clicks for the ad

I = impressions for the ad

Say your product sells for $30. Over a given period you have 2 ads in the same adgroup that each get 40k impressions and clicks cost  an average of $0.10 per click.

• ad1 has a CTR of 5%, a conversion rate of 0.5% and gets 10 conversions, which gives PPKI=$2.5 per thousand impressions
• ad2 has a CTR of 1%, a conversion ratio of 2% and gets 8 conversions, which gives PPKI=$5 per thousand impressions

So ad2 made, on average, twice the profit per impression despite the lower number of conversions. Given this data I would replace ad1 with a new ad. Either a completely new ad or a variant of ad2.

PPKI has the advantage of being quantitative and simple to calculate. You can just export your Google Adwords ‘Ad Performance’ reports to Excel and add a PPKI column. Some points to bear in mind:

• Selling software isn’t free. You may want to subtract the cost of support, CD printing & postage, ecommerce fees, VAT etc from the sale price to give a more accurate figure for the conversion value.
• PPKI doesn’t take account of the mysterious subtleties of Google’s ‘quality score’. For example an ad with low CTR and high conversion rate might conceivably have a good PPKI but a poor quality score. This could result in further decreases in CTR over time (as the average position of the ad drops) and rises in minimum bid prices for keywords.
• PPKI is a simple metric I have dreamt up, I have no idea if anyone else uses it. But I believe it is a better metric than cost per conversion, or any of the other standard Google metrics.

To ensure that all your ads get shown evenly select ‘Rotate: Show ads more evenly’ in your Adwords campaign settings. If you leave it at the default ‘ Optimize: Show better-performing ads more often’ Google will choose which ads show most often. Given a choice between showing the ads that make you most money and the ads which make Google most money, which do you think Google will choose?

Text ads aren’t the only type of ads. Google also offer other types of ads, including image and video ads. I experimented with image ads a few years ago, but they got very few impressions and didn’t seem worth the effort at the time. I may experiment with video ads in the future.

The effectiveness of ads can vary greatly. Back in mid-December I challenged some Business Of Software forum regulars to ‘pimp my adwords’ with a friendly competition to see who could write the best new ads for my own Google Adwords marketing. The intention was to inject some fresh ‘genes’ into my ad population while providing the participants with some useful feedback on what worked best. Although it is early days, the results have already proved interesting (click the image for an enlargement):

The graph above shows the CTR v conversion ratio of 2 adgroups, each running in both USA and UK campaigns. Each blue point is an ad. The ads, keywords and bid prices for each ad group are very similar in each country (any prices in the ads reflect the local currency for the campaign). Points to note:

• There were enough clicks for the CTR to be statistically significant, but not for the conversion rate (yet).
• The CTRs vary considerably within the same campaign+adgroup. Often by factor of more than 3.
• Adgroup 1 performs much better in the USA than in the UK. The opposite is true for adgroup 2.
• Adgroup 1 for the USA shows an inverse correlation between CTR and conversion rate. I often find this is the case - more specific ads mean lower CTR but higher conversion rates and higher profits.

‘Pimp my adwords’ will continue for a few more months before I declare a winner. I will be reporting back on the results in more detail and announcing the winner in a future post. Stay tuned.

I offer both PayPal and GoogleCheckout as payment option on my pounds sterling payment page (GoogleCheckout only allows me to price in pounds sterling, unfortunately). As GoogleCheckout is effectively free to me at present[1] I put the GoogleCheckout button on the left in the hope of getting more payments through Google. But 70.5% of purchasers clicked on the PayPal button.

I have since then become a bit disgruntled with GoogleCheckout for their slow processing times, chargeback fees, lack of multi-currency support and use of anonymised email addresses[2]. So I swapped the button order in the hope of increasing the number of purchasers using PayPal. 69.3% of purchasers now click on the PayPal button.

From this I conclude that GoogleCheckout still has a long way to go to beat PayPal in brand recognition, positioning on the left may not be more prominent (although 1.2% may be statistical noise) and button order is less important than I thought. Or perhaps the PayPal icon is just more compelling. I wonder if GoogleCheckout have tested their icon against the PayPal icon?

[1] Google currently process £10 of payments free for each £1 I spend on Adwords.

[2] The user can opt to have their email anonymised at time of purchase. The vendor then recieves an email address like Miss-abc123xyz@checkout.l.google.com. Google forwards email from this address to the purchaser, until they choose not to receive further emails. In theory this protects the purchaser from vendor spam, but in reality it makes support more difficult. For example, the purchaser can’t retrieve their key from your online key retrieval system unless they remember to use the anonymised address (they never do).

I have just had my first charge-back through GoogleCheckout. I shouldn’t moan at one charge-back in 8 months use as my secondary payment processor - except:

• the credit card address was in the UK, the IP address was in the Netherlands and the email address was .ru (Russian Federation)
• the payment failed authorisation twice, before succeeding a third time

Despite the above, Google apparently just processed the payment automatically, without referring it for further checks. How many Google Phds does it take to write a scoring system that can figure out that this was a suspect transaction? To rub a bit more salt in the wound Google have debited a £7.00 charge-back fee on top of refunding the payment.

I guess Google must need the money.

I am a big believer in having more than one payment processor. I use PayPal as my main processor with GoogleCheckout and 2Checkout as alternatives (GoogleCheckout for pounds sterling and 2Checkout for dollars). But I haven’t been overwhelmed by GoogleCheckout so far. This is how long the last 10 payments for PerfectTablePlan through GoogleCheckout took to clear:

• 4 hours 5 minutes
• 5 minutes
• <1 minute
• <1 minute
• 22 hours 28 minutes
• <1 minute
• <1 minute
• <1 minute
• 1 minute
• <1 minute

That is quite some variation. I assume it is due to some orders being flagged for manual fraud checking. This is response I got from Google when I complained:

…for your protection, Google may review certain orders before passing them to you for processing. Some reviews may take slightly longer as Google performs more comprehensive analysis of the order to minimise your exposure to fraud risk.

Our specialists are working hard to address all orders in a ‘Reviewing’ state as quickly as possible. These reviews may take up to 24 hours…

So 22.5 hours appears to be acceptable as far as Google is concerned. But they managed to reply to my support email within a few minutes.

GoogleCheckout may be cheap (effectively free to Google Adwords customers at present) but keeping my customers waiting up to 24 hours for their licence isn’t acceptable to me. It makes me look bad. Go and hire some more people Google - you can afford it. Otherwise PayPal are going to wipe the floor with you as soon as you start charging comparable fees.

Despite the leisurely time they take over fraud checks they still managed to pass a payment with a postal address in Scotland, an IP address in the Netherlands and a Romanian email address. I am still waiting to see if I am going to be charged a £7.50 fee by Google for the privilege.

You can now find out what sites your Google content ads are appearing on, using the new ‘placement performance’ report. This will alllow you to spot under-performing sites in a content campaign. To exclude a site from your campaign click the ‘excluded site(s)’ link at the top of the appropriate campaign page.

My placement report for June shows that PerfectTablePlan has had 25,309 impressions and 0 clickthroughs from myspace.com. Does that make it officially the least cool software ever? ;0)

If you use Google Adwords you will want to read this article by Dave Collins. If correct (and I have no reason to believe otherwise) it is pretty outrageous. Not content to force up the price of bids artificially by invalidating keywords they are now apparently showing your ads for broad matches you didn’t bid on, i.e. extremely broad matches. This could in turn lead to a lower CTR and more invalid keywords.

Better start examining those logs and polishing those negative keywords…

Google has a free desktop tool for managing Adwords accounts. Obviously downloading all your data on to your desktop offers the potential to remove some of the latency inevitable in managing large amounts of data online. However the Google Adwords web app was sufficiently good and the desktop app sufficiently bad that it wasn’t really an improvement. It was buggy (if you tried to add a phrase as broadmatch when you already had it as exact match you got a blank wizard window), lacking in basic GUI etiquette (simple things like Ctrl+click and Shift+click selection didn’t work) and slow. I can’t have been the only developer to delight in that fact that the gods of Mountain View had feet of clay when it came to desktop apps.

Anyway they seem to have fixed some of the issues and the latest version (3.5.0) is reasonably useable. Some of the things that I prefer it for over the web interface include:

• adding new keywords to multiple campaigns
• looking for inactive keywords across multiple campaigns
• looking for keywords with low CTR or high conversion costs across multiple campaigns

I just wish they would add lifetime stats, as well as stats for the last 30 days, 7 days and yesterday.

I have been using Google Adwords since I launched PerfectTablePlan over 2 years ago. I started using Yahoo Overture (as it was then called) at about the same time, but gave up on it due to the lousy user interface and the poor return on investment. Always on the lookout for new ways to promote my product I recently decided to investigate the new-kid-on-the-block: Microsoft AdCenter.

My first impression is that Microsoft have copied Google Adwords. Badly. All the standard Adwords stuff is there: campaigns, adgroups, exact/phrase/broad match, negative keywords etc, they haven’t even bothered to change the terminology in most cases, but it feels clunky compared to Adwords. Wherever they have made a departure from the Adwords model it appears to be a change for the worse.

• Negative keywords appear to be associated with phrases, not adgroups or campaigns. I might have 100 negative keywords and I don’t want to record them separately for every phrase!
• You have to choose a single language for a campaign and you can’t change it. English-UK and English-US are counted as separate languages, so I have set up a UK+English-UK language campaign and a USA+English-US language campaign. Presumably people in the UK with their computer set to English-US won’t see my ads at all, but I can’t be bothered to set up another whole campaign just for them.
• It confusingly mixes together campaign and adgroup properties in the interface.
• The user interface is quite monochrome and poorly laid out compared to Adwords.
• Everything has to be approved before it goes live. It took over 12 hours in my case (with Adwords it would be live in minutes).
• It is set up so that you can’t store the password in the browser (in FireFox anyway) and times out quickly. Continually re-typing the password gets old quickly.
• I tried opening AdCenter in 2 browsers so I could compare campaigns. It didn’t handle this well.
• The minimum bid is £0.05. This automatically makes a whole swathe of keywords uneconomic for me.

But it gets worse. They rejected some of my phrases due to ‘Landing page content not relevant‘. One of the phrases was “seating plan” with a landing page The easiest way to create seating plans. How much more relevant can I make it? This sort of arbitrary interference was one of the things that made Overture so frustrating.

The number of impressions are much lower than Google, but there are also fewer advertisers, so my ads rank higher. Overall AdCenter clicks are currently running at about 10% of what I get through AdWords[1]. It is too early to say how conversion rates compare. But if the profit is only 10% of what I get through Adwords it might not be worth the effort to maintain.

It would be great to have a real contender to Adwords to keep Google on their toes. I’m not a Microsoft-hater and I really wanted to like AdCenter, but my first experiences are not favourable. To be fair, it is early days for AdCenter and I am still learning the ropes. I’ll let it run for a while before I make any decision about pulling the plug.

Microsoft have a reputation for bringing out a lousy version 1.0 and then continually improving it until it crushes all opposition, so it would be unwise to write them off this early in the game. But I think they have got a long way to go before they catch up with where Adwords is now.

[1] I have a lot less phrases in AdCentre than Adwords, but I do have all the most important phrases.

Just over a month ago I added GoogleCheckout as a payment processor on my site. This resulted in the much vaunted GoogleCheckout badge being displayed next to my Adwords Ads. I expected an increase in clickthough ratio (% of people who see the ad who click on it) due to greater visibility and a consequent decrease in conversion ratio (% of clickers who go on to buy) due to the greater visibility attracting more ‘tyre kickers’.

I have now looked through 2 months of data (a month before and a month after) and the exact opposite has happened. My Adwords clickthrough ratio has dropped by 10%, but the conversion ratio has increased by 20%. Perhaps the badge is actually putting off the tyre kickers by making it clear that the product isn’t free? It is hard to know how much of this is due to the badge and how much is due to other factors and I will be checking the stats again in another month. I would be interested to know whether other people have had similar results.

The moral of the story is: don’t assume, measure.

GoogleCheckout has only recently become available to UK-based businesses such as mine. On the 20th March I took my first payment for PerfectTablePlan using GoogleCheckout as my payment processor. I now offer GoogleCheckout as a payment processor in addition to PayPal and 2Checkout. Here are a few early observations on GoogleCheckout for anyone else thinking of signing up.

Sign-up

The online sign-up form refused to accept my company number, but wouldn’t tell me what the problem was. Thankfully Google support were quite responsive and told me I had to add a ‘0′ on the front of the 7 digit company number to make it 8 digits. There are obviously still some bugs to iron out. Google put a small amount of money into my bank account (which makes a pleasant change) and I had to say how much to prove it was my account. It took about 5 days to complete the whole process, most of which was waiting for the payment to appear in my bank account.

Fees

This is the biggie. For every £1 you spend on GoogleAdWords you can process £10 in sales for free through GoogleCheckout until 2008. Should you exceed your Adwords quota (or not use Adwords) you will be charged only 1.5% + £0.15 per transaction. By way of comparison, the fee on £20 sale is:

GoogleCheckout: £0.45 (£0.00 if within Adwords quota)

PayPal: £0.68 (rates may vary between different account types)

Plimus: £2.00

Over hundreds or thousands of sales, that is a big difference. To be fair the Plimus rates are lower for higher ticket items and they probably offer a lot more services for software vendors than GoogleCheckout or PayPal, but it is hard to see them continuing to charge 10% when faced with this sort of competition.

Currency

I can only set a price in Pounds Sterling through GoogleCheckout. This is a real pain. People like to be quoted a fixed price in their own currency (Americans especially). So I want to be able to set a fixed price in pounds, a fixed price in dollars, a fixed price in euros etc as I do with PayPal. But I can’t. Non-UK customers can still buy my software through GoogleCheckout, but the price will be something odd like $36.23 and will change as the exchange rates change. Consequently I continue to use PayPal as my main payment processor for non-UK sales.

Adwords logo

You can tie your GoogleCheckout account to your AdWords account. As well as getting free processing this gives your ads a little GoogleCheckout logo. It certainly makes them stand out, but it is too early to say yet what effect this will have on clickthrough ratios and sales for my business.

Google are pretty zealous about enforcing these badges. I put through a GoogleCheckout transaction on my own credit card and a few hours later the GoogleCheckout logo appeared next to my Google Adwords ads. I went to bed. Next morning I woke to an email from Google saying they had revoked the logo as they couldn’t find the GoogleCheckout payment page. Blimey, give me chance - I hadn’t published the changes on my site yet! I explained the situation and the logo was restored in due course.

Integration

I integrate with GoogleCheckout using e-junkie, which I also use for integrating with PayPal. This allows me to display a licence key and email a licence key to the customer on purchase completion. I had quite a struggle to get e-junkie to do what I wanted with PayPal due to a combination of my own quirky requirements and patchy e-junkie documentation. But, now that I have it working with PayPal, adding GoogleCheckout was very straightforward. Other people seem less than impressed by the GoogleCheckout API, but e-junkie has successfully shielded me from all that.

Note that the email GoogleCheckout sends you for each purchase is very sparse. It doesn’t even contain the purchaser’s name. You have to go to the GoogleCheckout website for that or get it through their API. Thankfully e-junkie have an option to send you an additional email, which contains copious details about the order.

User experience

I did a couple of GoogleCheckout test transactions with my own credit card. The whole process was fairly lightweight and painless, similar to paying with a credit card by PayPal. Customers are also given the option to save all their details for future purchases.

Email confidentiality

GoogleCheckout gives customers a checkbox option to keep their email address secret from the vendor. The vendor gets a made-up email address which Google then (in theory) redirects to the vendor. The customer can instruct Google not to forward further emails at any point. I can see why customers might find this attractive, but I also see it causing headaches for vendors. What happens when a customer emails you from their real address and asks you to resend their licence key 6 months later? Unless they can quote their transaction code (which they have almost certainly lost as well) it is going to be a pain to work out if they purchased a key or not. About 50% of my customers have gone for the confidential option so far.

Promotional opt-in

Customers also have a checkbox option whether they want to receive promotional emails. About 20% of my customers so far have opted in. I will be adding them to my newsletter mailing list in due course.

Fraud protection

It is too early for me to say how good the GoogleCheckout anti-fraud measures are.

Customer acceptance

I think it is very important to give customers a choice of Payment processor, so I have both GoogleCheckout and PayPal buttons on my pounds sterling purchase page. The GoogleCheckout buttons are in arguably the more prominent position, but so far 70% of customers have chosen PayPal. I am not sure why. Perhaps because PayPal is a more recognised brand than GoogleCheckout amongst my customers. Or maybe it is due to teething problems with GoogleCheckout - I had one customer phone me up yesterday to say he just got an hourglass when he tried to pay through GoogleCheckout.

Conclusion

At this stage I can only give first impressions. Overall GoogleCheckout doesn’t appear quite as polished as more established systems, such as PayPal, and only being able to set a price in a single currency is a pain, but it is very cheap. It will be interesting to see what effect their pricing has on other payment processors.

A final word of caution. If you use GoogleAdwords, GoogleAnalytics and GoogleCheckout then Google knows a frightening amount about your business. They could decide you are making too much money and increase your minimum bids on Adwords accordingly. Or they could use their vast cash mountain to put most of the GoogleCheckout competitors out of competition and then ramp up their rates. But of course Google won’t do that, because that would be evil…