Tag Archives: adwords

Twitter Demographics Are Bullshit

twitter demographicsI have been experimenting a bit with promoting my software using promoted tweets. You can target people based on their interests or the Twitter handles they follow. I have chosen the latter approach with the aim of getting people to a) click through to my website and b) retweet (in the hope of more click throughs).

The results haven’t been great, with only 25% of the ‘engagements’ I paid for resulting in clicks through to my website. Here is a direct comparison between traffic from AdWords and Twitter ads to my seating planner software website (data from Google Analytics).

AdWords search
campaign
Twitter sponsored
tweet
Bounce rate 43% 78%
Av. pages visited 3.10 1.48
Av. time on site 1:51 0:40

Ouch. Then factor in that the Twitter traffic cost me 2.5 times as much per click through as the AdWords traffic. Double ouch. But that’s fine. You have do lots of experiments to find out what works. Most of them won’t be successful. This experiment only cost me £150.

However I was a bit puzzled by the ‘interests’ report from Twitter. Here are the top 10 ‘interests’ of the people that were shown my sponsored tweet, as reported by Twitter ads.

twitter demographicsBear in mind that I was targeting various Twitter handles related to the events and wedding industry for Twitter users in the UK, USA and Canada. According to the report:

  • 72% of them are interested in ‘Politics’.
  • 69% of them are interested in ‘Hip hop and rap’.
  • 62% of them are interested in  ‘NFL football’.
  • ‘Weddings’ is way down the list at number 55 with 15%, between ‘Leadership’ and ‘Dogs’.

Hmm, something is a bit fishy here.

I ran some more campaigns to promote my UK training course for people who want to create commercial software products. The ticket price for my course is higher than for my seating planner software, so I thought it was worth persevering a bit more with Twitter ads. Here are the top 10 ‘interests’ for the 3 campaigns I ran.

twitter demographics twitter demographics twitter demographicsBear in mind that this time, I was targeting various Twitter handles related to software development, marketing and entrepreneurship for Twitter users in the UK. We love our comedy in the UK and most of us could stand to lose a few pounds. But I can confidently state that the vast majority of people in the UK know almost nothing about NFL (American) football and care even less. ‘Computer programming’ and ‘Startups’ were waaay down all 3 lists.

Twitters says:

We infer interest from a variety of signals, like the accounts users follow and the Tweets they engage with.

I emailed them to point out that the interests seemed to be highly suspect, but I didn’t a substantive reply.

I can only conclude that either Twitter isn’t doing a very good job of the targeting or (more likely) it really doesn’t understand the interests of its customers and is doing a very poor job at guessing. Consequently I would urge you to be very wary of paying for promoted tweets on the basis of ‘interests’.

5 things you can do to improve your AdWords profitability in the next 30 minutes

Lots of people set up AdWords campaigns and then leave them to run unattended for months at a time. Bad. Idea. I know, I know, you’ve got a million other things to. So I am going to give you a very short and very specific list of things you can do to improve your AdWords account. Right now. No excuses.

1. Check your ‘Geographic’ report for under performing countries

Different countries can perform wildly differently for the same keywords, ads and bid prices. This is particularly the case if you compare rich industrialised countries with developing countries.

  1. Choose a campaign and date range.
  2. Click on the AdWords Dimensions tab then select Geographic.
  3. Remove any geographic columns apart from Country/Region.

adwords geographic report

Are some countries performing considerably worse in terms of click-through rate, cost per click or cost per conversion? If so, depending on how differently the countries are performing:

  1. Stop targeting the under-performing countries; or
  2. Make a duplicate of that campaign for the under-performing counties, but bid less ( It is easy to duplicate a campaign in the free Google Adwords Editor); or
  3. Use a negative bid adjustment for the under-performing countries:

adwords geographic adjustments

2. Check your ‘Time>Day of the week’ report

Some products sell much better on certain days of the week. For example, B2B products probably sell better during the week than they do at the weekend. The opposite might be true for some B2C products. You can easily check this.

  1. Choose a campaign and date range.
  2. Click on the AdWords Dimensions tab then select Time>Day of the week.

adwords day of week reportAre some days of the week performing significantly better or worse than others? If so, you can schedule your bids to be more or less on different days of the week.

adwords bid adjustment schedule

3. Get rid of the dead wood

Keywords with low quality score and low click-through rates can drag your whole campaign down. You can easily set up filters to find the culprits.

adwords filteradwords filterAnd then pause or delete these keywords.adwords delete keywords

4. Add sitelink extensions

If your ad appears at the top of the page, you can optionally show sitelink extensions that hyperlink to particular pages. These increase the amount of screen real estate and text available to you and they don’t cost any extra. What’s not to like?

adwords-sitelink-extensionsTo add sitelink extensions:

  1. Select the appropriate campaign.
  2. Click on the Ad extensions tab and select Sitelinks extensions.
  3. Click the +EXTENSION button.

site link extensions

5. Check your ‘Search terms’ report for negative keywords

Unless you are only bidding on exact match, the queries that result in your ads being shown are not the same as the keywords you supply to Google. You need to use negative keywords to further control which search queries your ads appear for.

For example, if you are selling Windows backup software and bidding on backup software (as broad or phrase match) your ad may appear every time someone searches on mac backup software. This hurts you twice: wasted clicks (which costs you money directly) and reduced click-through rates (which reduces your quality scores and costs you money indirectly). You can avoid these issues, just by adding mac as a negative keyword.

To look for negative keywords:

  1. Choose a campaign and date range.
  2. Click on the AdWords Dimensions tab then select Search terms.

dimensions search terms report keywords

You will see a list of the searches that actually triggered your ads. Are there any searches there that shouldn’t be? If so, add the offending words as negative keywords, (either at campaign or ad group level).

Plug:  My Keyword Funnel AdWords tool can be very useful for sifting through large amounts of search queries to find negative keywords. Just paste in thousands of keywords from your search terms report and look at each keyword by frequency and context.

keyword funnel adwords tool

(This article was first published on www.keywordfunnel.com)

Exploit the long tail of Adwords PPC with Keyword Funnel

Adwords Keyword FunnelI released my new product Keyword Funnel today. It is a tool to help Adwords advertisers improve the profitability of their Adwords campaigns.

I have found the best way to get a decent volume of affordable conversions from Google Adwords is to use a ‘long tail’ strategy. For my Perfect Table Plan product there are a few ‘head’ keyword phrases that have high search volumes, such as “table plan” and “seating arrangement”. But these aren’t very well targeted (“table plan” might have been typed in by someone who wants drawing plans to make their own dining room table). Also lots of other people are bidding on these head phrases, pushing the bid prices up. This combination of poor targeting and high click prices makes it hard to make a profit on head keywords.

So I prefer to concentrate on ‘tail’ terms such as “table plan software mac” and “wedding seating arrangements program”. These are much better targeted, so convert a lot better. The clicks are also cheaper because less people are bidding on them. However the search volumes are much lower, so you need a lot of these tail terms to get a reasonable amount of traffic. At least hundreds, and preferably thousands. Hence ‘long tail’.

the long tail of Adwords PPCThe good news is that you can mine lots of different sources of data for these long tail keywords. For example you can extract keywords from your web logs, Google Analytics and Google Webmaster Tools accounts. Even though many searches are now listed with the keywords ‘not provided’ by Google, it still isn’t hard to come up with thousands of candidate keyword phrases. The bad news is that they aren’t in a usable form. Before you can import them into Adwords you need to:

  • Sort out duplicate phrases, foreign characters, capitalization and other noise.
  • Remove unwanted and negative keywords.
  • Group keyword phrases into tightly focussed adgroups.
  • Put the results in a form Adwords understands.

I tried to use Excel for this. But, marvellous tool though it is, it really wasn’t up to the job. So I wrote my own tool. This worked very well, but it wasn’t a commercial quality product. So I started again, from scratch 6 months ago. Keyword Funnel is the result.

Keyword Funnel allows you to add hundreds of keywords to new or existing Adwords campaigns in minutes, rather than hours. This makes long tail Adwords campaigns with hundreds or thousands of keywords a much more realistic proposition. It also allows you to set up new campaigns in a fraction of the time.

Keyword Funnel is available for Windows and Mac. It is priced at a one-time fee of just $49 (up to 2 Adwords accounts) or $99 (unlimited Adwords accounts). You can download a free trial from the website and it comes with a 60-day money back guarantee. The website is currently a little unpolished, but the software is well tested and robust. Any feedback is welcome.

Try Keyword Funnel now!

Adwords vs Twitter vs LinkedIn ads, a small experiment

I am running a course for people who want to create their own commercial software products. Promoting the course has been a challenge. How do you reach a programmer, sitting in his cubicle, dreaming about making a living from selling his own software? In particular, how do you reach ones who might pay to attend a weekend  course in the UK in March? Most of the attendees of the last course came via this blog. But I also want to try to reach people who have never heard of this blog. So I have been experimenting with paid ads via Twitter, LinkedIn and Adwords. Crucially, all 3 of them allow me to restrict my advertising to people in the UK. I thought the initial results were interesting, so I am sharing them here.

Adwords

Google Adwords allows you to show your ads alongside organic (non-paid) search results when people type relevant phrases. But it is hard to think of phrases my target audience (and only my target audience) might be searching on. Terms such as “software marketing” and “software sales” are too vague. In the end I came up with about 200 phrases, including  “sell my software”, “software startup”, “start a software company”, “name software product” and “sell software online”.

One of my Adwords ads (I tested several).

One of my Adwords ads.

But there just aren’t a lot of searches on these phrases. Bidding between £0.25 and £1 per click (depending on relevance) for UK searches over the last 47 days I have managed a meagre:

  • Impressions: 1.7k
  • Clicks: 20
  • CTR: 1.13%
  • CPC: £0.31

Looking at the Dimensions>Search terms report to see the phrases typed by the people who clicked, the clicks seem fairly well targeted. And my impression share is >25% for the majority of the adgroups, so I don’t think increasing my bids is going to make a big difference to the amount of traffic. Adwords just doesn’t work that well unless there are unambiguous phrases your potential customers are actively searching on. I haven’t tried display (content) ads, as these have never worked well for me in the past.

LinkedIn

I also tried running LinkedIn ads targeted at people who are based in the UK and list programming skills such as “Programming”, “SaaS”, “Subversion”, “Git”, and “C++”. The minimum bid per click is $2.00 (ouch), so I bid $2.05 per click.

linkedin-ad

One of my linkedIn ads.

The result over 12 days have been:

  • Impressions: 133k
  • Clicks: 54
  • CTR: 0.04%
  • CPC: $2.00
  • Leads: 2

That is a good number of impressions, but a horrible CTR. Looking at the breakdown of clicks by industry and job function in the reporting, the clicks seem fairly well targeted. A ‘lead’ is where someone expresses an interest and LinkedIn allows you to send them a message. But you don’t get their email address and it appears you can only message them through LinkedIn once.

Twitter

I paid to put a sponsored tweet in the timeline of Twitter users in the UK, based on who they follow. I picked the Twitter handles of 4 other people who blog about bootstrapping.  Note that Twitter claims they won’t show ads to all the followers of these Twitter handles, but to people who are interested in similar things to the people who follow those Twitter handles. That seems a rather hair-splitting distinction, but I guess it allows them to claim they aren’t exploiting the popularity of their customers directly. I bid a maximum of £0.75 per ‘engagement’ (click, retweet or follow). I didn’t include an image with the tweet as I couldn’t really think of anything relevant at the time (a classroom?). The text of the sponsored tweet was:

Sell your own software. Be your own boss! 2 day course, 22/23 March, Wiltshire, England. Full details at: http://successfulsoftware.net/software-business-training-course/

The result of this 1 sponsored tweet over 2 days has been:

  • Impressions: 5.8k
  • Clicks: 174
  • CTR: 3%
  • CPC: £0.29
  • Favorites: 7
  • Retweets: 2
  • Follows: 1

Given the small number of favorites, retweets and follows, it is hard to know how well targeted this was. I guess a 3% CTR implies it was fairly targeted. The fact that the CPC was a lot less than my maximum bid may be down to Twitter ads being a relatively new medium, without too much competition (yet).

The reports have left me confused. Twitter report 3,112 impressions and 106 clicks for followers of my own Twitter handle @successfulsw.

twitter-reportingBut:

  • I didn’t tick the Also target your followers check box, as it seems idiotic to be paying for tweeting to people that I can tweet to for free.
  • I don’t have 3k Twitter followers.
  • I direct messaged a few of my Twitter followers based in the UK and they said they hadn’t seen a sponsored tweet from me.

This was the response when I queried Twitter support:

Thanks for the information. We have investigated this issue and we can see that your handle is in your @handle section of your campaign, this is because implicit targeting was enabled (targeted followers with similar interest as your followers), that is why your handle is showing there. We have confirmed you have a nullcasted Tweet and this Tweet is not showing to your followers. We realize this may be confusing and we’ll work with our product team to improve how this looks on the user interface.

The reporting of the interests of the people that engaged doesn’t make sense either. It says that of the 5.8k impressions, 4.7k were to people interested in “Hip hop and rap” and 4.5k to people interested in “NFL football”. We don’t even play NFL football in the UK!

twitter reporting interestsThis was the response when I queried Twitter support:

I understand it’s confusing, and I’ll share this feedback with my team. What you’re seeing is a cumulative total of paid/earned/organic engagements. This total also considers secondary account signals eg a users prime interest is photography, and a secondary interest in baseball. I can assure you that you paid for primary interests only, and organic/earned and secondary engagements were not charged for.

I am still none the wiser about the “NFL football” result. It does make me wonder how accurate their ‘targeting by interest’ option is.

Conclusion

This is obviously only a very small experiment and it is hard to judge exactly what the quality of the traffic was like (I was sending traffic to a wordpress.com page and I am not able to measure detailed analytics, such as bounce rates or time on page). But I even these limited results are still illuminating.

I like Adwords, particularly the fact that it shows your ad to people at the point they are searching for a solution to their problem. It has worked pretty well for my table planner app over the last 9 years, despite bid price inflation. But Adwords is only effective when there are well defined phrases with reasonable search volumes you can target. That doesn’t seem to be the case for my course.

LinkedIn is a good way to target people according to their skills or job function. There are lots of different targeting options and the traffic volume was better than Adwords. But the clicks are very expensive. Given an industry standard 1% conversion rate I can afford to pay $2 per click to promote a £600 course. But forget it if you are selling less expensive products.

Twitter ads seem quite promising. There are lots of targeting options and you can get a lot of traffic quickly for a relatively low price per click [but see update, below]. I could have got a lot more clicks by targeting more Twitter handles and/or increasing my bid. But its not something you can leave running continuously like Adwords or LinkedIn. You have to keep sending new sponsored tweets. Also the reporting is confusing and of dubious veracity. Finally it feels slightly grubby to be targeting the followers of your peers and/or competitors so directly. But I think it shows promise. If you are going to try it, I recommend you do so soon. The law of shitty clickthroughs means that it is sure to be a lot less cost effective in a few years time.

**** Update ****

I noticed that the clickthroughs to the URL in my sponsored Twitter post was only about a third of the clicks reported by Twitter. When I asked Twitter about this they replied:

Twitter Ads measures engagements which we define as “clicks” within the Promoted Tweet Dashboard are defined as follows: clicks on the URL, hashtag, Tweet copy, avatar and username, or the expand button. It’s likely that the other analytics you are seeing are tracking link clicks.

So I am paying for someone to just click the Tweet copy (text)! The cost for a clickthough to my site is actually around 3 times the CPC reported by Twitter. That makes it around £1 per clickthrough, which is much less attractive.

Boostrapped.fm podcast

I was a guest on episode 21 of Bootstrapped.fm, the podcast of Andrey Butov and Ian Landsman. The discussion was very wide-ranging, touching on SAAS vs web, the Qt development environment, the royal wedding, A/B testing, capoeira, Adwords, the history of shareware, my new training course and lots more besides. I really enjoyed it. Boostrapped.fm also has a thriving discussion forum at discuss.bootstrapped.fm.

Upgrade your Adwords accounts before the 22nd July – or else!

google adwordsGoogle will automatically switch all Adwords campaigns to ‘enhanced’ on 22-July-2013. If you don’t do it before then, Google will do it for you. And you can be confident they will be thinking of their interests, rather than yours. The changes are mostly bad news for those of us that sell software for desktop computers. In particular you can no longer choose not to bid for clicks on tablet devices. I would like to have more control over how I bid on different platforms, not less, so I am not happy about the changes. However your choices are either to upgrade your campaigns to ‘enhanced’ or close your Adwords account.

You can at least bid less for clicks on mobile devices. If you are selling downloadable software that doesn’t run on mobile devices, I recommend you set your bid adjustment much lower for mobile devices. My own analytics data tells me that mobile devices only have one tenth the (measurable) conversion rate of desktop/laptop computers. So I have set my mobile bid adjustment at -90% for mobile devices. Presumably you can set it to -100% if you don’t want to bid for mobile clicks at all. I don’t understand why advertisers aren’t being given the same option for tablet devices.

Note that you can’t set a mobile bid adjustment for CPA campaigns. However Google should notice the lack of downloads and sales on mobile devices and adjust the mobile bids down for you automatically.

Upgrading is pretty straight forward and should only take a few minutes. More details on the software promotions blog.

The declining profitability of Google Adwords

Google Adwords used to be a great way to get targeted traffic cheaply (if you knew what you were doing). I think those days are well and truly over.

I have been using Google Adwords to advertise my table plan software since 2005. The following graphs show some metrics from my Adwords campaigns over that 8 years. The graphs show 12-monthly cumulative figures (e.g. each point represents the value for that month plus the preceding 11 months). Using cumulative data hides some of the noise, including the seasonal variations that are inevitable in a business related to weddings (more people buy my software when it is summer in the northern hemisphere), and makes the overall trends clearer.

Average cost per click (CPC)

Average cost per click (CPC)

Clickthroughs

Clickthroughs

Conversions (sales)

Conversions (sales)

Profit per month

Profit per month

The trends are clear and it’s not a pretty picture. Less, more expensive clicks = less profit. I can either pay more and more per click to maintain the same number of sales. Or I can continue to pay the same per click and get less and less clicks. Either way, my profit goes down. It isn’t a trend I see changing direction any time soon.

I think these long-term trends are mostly due to increasing competition. As more and more companies bid on Adwords for a finite number of clicks, it inevitably drives up the cost of clicks (simple supply and demand). It also doesn’t help that a lot of Adwords users are not actively managing their campaigns or measuring their ROI, and are consequently bidding at unprofitably high levels. Google also does its best to drive up CPC values in various ways (suggesting ridiculously high default bids, goading you to bid more to get on page 1, not showing your ad at all if you bid too low – even if no other ads appear etc).

Of course, this is just my data for one product in one small market. But the law of shitty clickthrus predicts that all advertising mediums become less and less profitable over time. So I would be surprised if it isn’t a general trend. Are your Adwords campaigns becoming less profitable? Have you found another advertising medium that works better?

Setting an optimal bid price for Google CPA bids

A couple of years ago I wrote up the results of an experiment comparing Cost Per Action vs Cost Per Click bidding in Google Adwords. At the end of the experiment I decided that I did trust Google CPA bidding, but the results from CPA bidding weren’t compelling enough for me to switch. So I stayed with my mature CPC campaign. Subsequently I spoke at length with Adwords guru David Rothwell and Adwords master practitioner Alwin Hoogerdijk. They convinced me that:

  • I hadn’t really given Google CPA enough learning time – the more data Google has the better it should be able to do. The mighty Google brain might even be able to spot and exploit patterns I would find very difficult to emulate (e.g. based on season, country, day or week or time of day).
  • I should switch from paying per sale to paying per download, as this would give Google an order of magnitude more data to work with.
  • CPA bidding would require a lot less of my precious time to manage.

So I switched back to CPA. This time measuring a conversion as a successful download and install (my table planner shows a help page in a browser on first run, this contains the Google conversion tracking script).

So now, instead of having to choose thousands of bid prices (one for each keyword and match type in each campaign), I had to choose a single bid price – what I am prepared to pay Google for a download. If I pay too little for a download: Google won’t show my ads much, I won’t make many sales and my profit will be low. If I pay too much for a download: Google will show my ads a lot, but the amount I pay for each conversion will be high and my profit will be low. In between their should be a ‘sweet spot’ that gives me optimal profit. But how to find that sweet spot?

Looking at analytics data I have a good idea at what rate Adwords traffic converts to sales. I chose a CPA bid based on this and then I randomly varied the bid up or down every 7 days (some days of the week perform consistently better than others for my product). The graphs below show the results. Each data point is 7 days of data. The black lines are linear trend lines. I deliberately haven’t put values on the axes, but the x and y axes are all linear, starting at 0.

The trends are pretty clear. Increasing CPA bid price:

  • increases the number of times your ads are shown
  • makes little difference to the click through rates
  • decreases the click to download and download to sale ratios

So higher bids means more sales, but also a higher cost per sale. But, of course, the really important metric is profit. So I worked out the average daily profit from Adwords traffic, which is the net sales income (gross sales minus sales costs, including payment processor fees and support costs) minus Adwords costs. Again each point is 7 days of data. The black line is a 2nd order polynomial trend line.

The data is quite noisy. But some data is a lot better than none and there does appear to be sweet spot about where the red arrow is. The curve is fairly flat meaning that I don’t have to be too precise in my bid price to get a near to optimal return. But if I bid twice the optimal price my profit will drop by about 35%.

In an ideal world I would have run all these different bid prices concurrently, instead of one after the other. But that just isn’t possible with Adwords at present (you can use Google Adwords experiments to split test bid prices, but only 2 at a time). Also I could have gathered a lot more data, used longer time intervals (7 days probably isn’t long enough for Google CPA to get into its stride) and bid a lot higher and lower, to make the trends clearer. But I wasn’t prepared to spend the extra time and money required.

If you are using CPA bidding you should be able to carry out a similar analysis on your own Adwords account to find your own CPA bidding sweet spot. If you are still using CPC, perhaps you should consider switching to CPA and let Google do some of the heavy lifting for you. You can switch any campaign that has 15 or more conversions per month to CPA bidding in the ‘Settings’ tab.

You can always switch back to CPC later. If you aren’t using Google conversion tracking, well you really should be.

A word of warning. Not all downloads are equal. You might think that download to sale rates would vary a lot less than impression to click and click to download rates (I did). But download to sale ratios can vary a lot between different campaigns, even for the same product. For example, my analytics data shows that downloads from Adwords display (=contents/adsense) traffic only convert to sales at around a quarter of the rate of Adwords search traffic. So display campaign downloads are worth a lot less to me than search campaign downloads and I set my CPA bids accordingly.

I showed a draft version of this post to Alwin Hoogerdijk of Collectorz.com collection database software, who first persuaded me to switch back to CPA and knows a lot more about CPA than I do. He had the following to add:

When using CPA bidding you should give Google more room to experiment. On search, this means using more broad match terms, or at least modified broad match. And less negative keywords (I removed a lot of my negatives lately). The idea is that Google will automatically find out what works and what doesn’t (again, this may take a lot of time).

On the Content Network it means being less trigger-happy with the site exclusions. Without CPA bidding, I would be more likely to exclude generic sites like Facebook, about.com, etc… But with CPA bidding, I tend to allow the optimizer to display on those sites and the find the right pages within those sites to show my ads on.

In my experience, the optimal CPA bid can vary (wildly) between products, campaigns, etc. . Content Network CPA’s in general tend to be much lower, for the same products. Strangely enough, content network visitor sign up (or downloads) are worth less than search traffic sign ups. Which wasn’t what I was expecting. Of course, content network traffic is less targeted in general so one would expect a lower sign up rate. But even if those visitors sign up, they convert less well to actual sales too. Tricky.

Is it worth advertising Mac software on Google Adwords?

I learnt a long time ago that people will happily click on totally irrelevant pay per click ads. For example, if you bid on “seating plan” I can assure you that a significant percentage of people searching for “boeing 747 seating plan” will happily click on your ad titled “wedding seating plan”. They won’t buy anything, as they aren’t interested in wedding seating plans, but you still have to pay for each click. You can stop your ad showing to these searchers by adding “boeing” and “747″ as negative keywords. Problem solved.

But what do you do if you are selling software that only runs on Mac OS X? The vast majority of searchers are running Windows. Indiscriminate clicks by them could quickly turn your Adwords ROI negative. In your Adwords campaign settings you can choose to only show ads on desktop computers and laptops. But you can’t choose the operating system.

As discussed above, putting “Mac” in the title is unlikely to be enough. You can’t use negative keywords, because the vast majority of Windows users searching for, say, backup software will type “backup software” not “Windows backup software”. You can just bid on searches containing keywords “Mac”, “Apple” or “OS X”, but will this be enough? My general advice to Mac only software vendors was to avoid Adwords, unless the ticket price of their software was in the hundreds of dollars. But, as my software runs on both Windows and Mac, I didn’t have any data to back this up.

Recently I got some data on Adwords clickthrough rates for a Mac only app (www.puzzlemakermac.com) by Hokua Software. They have kindly allowed me to share the data.

Initially they bid on generic keywords, such as “crossword maker” and ran ads such as the following with “Mac” displayed prominently in the title:

The results from analytics: 60% of the people clicking on the ads were on Windows and 40% on Mac.

Then Google banned them from the word “Mac” in their ads (it is possible to get this reversed with the express permission of Apple, but I don’t know how likely they are to grant this). So they switched to “OS X” in the ad, which hasn’t been blocked (yet).

The results from analytics: 73% of the people clicking on the ads were on Windows and 27% on Mac.

Then they restricted their bids to Mac targeted keywords such as “mac crossword maker”.

The results from analytics: 23% of the people clicking on the ads were on Windows and 73% on Mac. But there was a big drop in the number of impressions.

I think it is going to be almost impossible for anyone to get a return from Adwords when the majority of their clicks have no chance of generating a sale. So only bidding on Mac specific keywords seems to be the way to go. But there will still be a significant number of wasted clicks from Windows users. Also any Mac users who don’t use the appropriate keywords won’t see your ad. Consequently the return on time and money invested is likely to be a lot lower than Windows, cross-platform and web developers can expect. If you have a Mac only product with: a high ticket price product, well-defined keywords and limited competition, it might be worth trying Adwords. But otherwise it is probably better to wait and see if Google release OS targeting.

Of course, you could always use one of the free Adwords vouchers that Google are handing out like confetti (I get one every month in my PC Pro magazine) and try for yourself. This is how Hokua software got the results above. If you do, I would be interested to know how your results compare.

5 great ways to waste money in Google Adwords

google adwordsI have looked at quite a few Google Adwords accounts as part of a  1-day consulting package I do for other microISVs and small software vendors. I have also talked to a lot of people at conferences and on forums about Adwords. It clear that a lot of people are wasting a lot of money on Google Adwords, sometimes with really basic mistakes.

For example:

  • paying $1.50 per click to advertise a $20 utility
  • paying $1 per click for an expensive, English language only development tool in some of the poorest, non-English speaking countries in the world.

Ouch.

Below I list 5 great ways to waste money in Adwords. I have seen them far too often. I have considerable admiration for what Google has achieved. But I think Larry and Sergey are probably rich enough already. I would like to see a lot less people throwing money at them and getting nothing useful in return.

1. Don’t use conversion tracking

conversion tracking adwords

With conversion tracking you decide a goal to track (typically a customer buys your software) and put a small script provided by Google on the appropriate page (e.g. the ‘thank you for buying’ page). Google will then use cookie tracking to calculate the cost per conversion for your ads and keywords. It is that simple and you can set it up in a few minutes. I can’t understand why anyone wouldn’t use conversion tracking. With conversion tracking you will soon notice that some ads and keywords convert consistently better than others, often much better. Armed with this information you can optimise Adwords by changing bid prices and deleting under performing ads. Without conversion tracking it is pure guess work.

Conversion tracking isn’t perfect:

  • Adwords cookies time out after 30 days. If someone buys 31 days after they click your ad it won’t be tracked. And the cookie may be pushed out of the cache before 30 days.
  • If someone clicks your ad on one computer and then buys it on another computer (or even using a different browser on the same computer) the conversion won’t be tracked.
  • Some customers may have cookies disabled.

But imperfect data has to be better than no data. Obviously the 30 day limit on cookies is problematic if you are selling software with a sales cycle that is typically 30 days or longer (e.g. software with a 30 day trial). In that case you are probably better off tracking downloads, rather than sales. The fact that someone takes time to download your software, rather than bouncing straight out of your site, at least shows some interest. If you have stats which show your typical download to sale ratio (and you should) you can use this to work out what a download is worth, and set your bid price accordingly.

2. Don’t use negative keywords

adwords negative keywords

My own experiences with Adwords quickly showed me that people will click an ad, even if it isn’t at all relevant to what they are searching for. For example people searching for “747 seating plan” will click on an ad with the title “wedding seating plan”. It is the nature of the web that people are surfing rather than reading, and clicking on an irrelevant ad doesn’t cost them anything. You can avoid a lot of wasted clicks with carefully set-up negative keywords. For example, you can be sure that I have “747″ set up as a negative keyword.

Ways to find negative keywords include:

  • Generating ‘Search Query Performance’ reports from Google Adwords reporting
  • looking through your web logs/analytics for the sort of terms people are typing into search engines to find your site
  • using Google’s keyword suggestion tool
  • using Google suggest

There is also a useful list of negative keyword suggestions on Alwin Hoogerdijk’s blog.

3. Advertise in developing countries

adwords country selection
Over a billion people have access to the Internet. Many of them are in developing countries and aren’t realistically going to buy your software due to a combination of: cost (even $20 is a lot of money to people in many developing countries), payment issues (they may not have access to credit cards), language issues (your software isn’t localised for them) and cultural issues (there just isn’t much respect for intellectual property and copyright in many parts of the developing world). But that certainly won’t stop them clicking on your ads and you still have to pay for the clicks.

Start with wealthy countries where plenty of people speak a language your software has been localised into. If you really think you might be able to make a return in developing countries, then test it by creating a separate campaign that only runs in these countries and set your bids much lower (it is very easy to duplicate a campaign with Adwords Editor).

4. Bid too much

adwords bids

Lets use an example:

  • Your software sells for $30, of which you get $20 after subtracting ecommerce fees and average support costs.
  • Your typical visit to sale conversion ratio is about 1%.

That means you will only break even if you pay $0.20 per click through Adwords. Personally I find it hard to justify paying more than 50% of my profit to Google. So I wouldn’t bid more than $0.10 per click. If I couldn”t get any impressions at $0.10 per click I would try to either improve my quality score (e.g. improve my ads or delete keywords with low clickthrough rates) or find cheaper ‘long tail’ keywords to bid on. Paying $0.20 or more just to ‘get on the first page’ of Google is crazy (unless perhaps, it is a loss leader for market research purposes). You can’t make up on volume what you lose on each sale!

5. Don’t monitor your results

adwords reporting

Leaving your adwords campaign running for months on ‘auto pilot’ is ill-advised. Adwords is a constantly changing landscape. Google is continually changing the system and your competitors are coming and going and changing their Adwords campaigns and their products. So you need to continuously monitor how you are doing.  Google makes this very easy. For example, you can just set up Adwords reporting to email you a weekly summary of the number of conversions and the cost per conversion for each adgroup. A quick glance through this will let you know if things are going awry.

Conclusion

Adwords can be a very responsive, cost effective and well targeted form of advertising, if you take the time to learn the ropes and experiment. Below is a graph of my return on investment from Adwords for my table planning software over 5 years (almost certainly an underestimate due to the short-comings of conversion tracking, as discussed above). You can see that, after a few months finding my way, I was able to get a consistent ROI of around 4 or 5 to 1 and maintain this in the face of increasing competition.

adwords ROI graph

ROI = number of dollars in sales for each dollar spent on Adwords (1=break even).

Adwords is a complex system and the defaults are weighted in the house’s favour. In this article I have only touched on a few of the biggest mistakes I see. Google will give you plenty of rope to hang yourself and there are lots of other, less obvious ways to lose money. You really need to take the time to learn the system and experiment if you are going to have any chance of getting a decent return.

When I started with Adwords 5 years ago I read the Perry Marshall e-book on Adwords (beware – long copy!). I found it quite helpful. I assume they have kept it up to date. If nothing else, you will learn what it is like to be relentlessly marketed and upsold to. Google also has lots of free Adwords documentation and videos. If you go to conferences such as SIC or ESWC it well worth listening to Adwords specialists such as Dave Collins of softwarepromotions.com (formerly sharewarepromotions.com) talk about Adwords. There is also lots of useful information in the blogosphere. Start with a small daily budget and gradually increase it as you learn what works for you.

If you haven’t got the time or inclination to learn the system and experiment, pay someone who knows what they are doing to do it for you or stay well away from Adwords. Also bear in mind that Adwords works better for some products than others. If I was selling a $20 Mac-only product in a market with lots of more expensive competitors, I probably wouldn’t even bother trying Adwords.

** Update **

I used a deliberately provocative headline for this post, because I wanted to emphasize the fact that a lot of people are wasting a lot of money on Adwords. It seems to have worked in terms of traffic. But, judging by comments here and on Hacker News it has also confused some people. Sorry about that. To clarify, the sections heading are telling you how to waste money. To maximize your ROI you should do the opposite:

  • use conversion tracking
  • use negative keywords
  • only advertise in richer countries
  • not bid too much
  • monitor your results