‘A peer report card’ for your AdWords account

One of the most frequent questions clients ask me is: “How am I doing compared to my competition?” Owing to the fact that many clients don’t understand the intricacies of AdWords, the smart (and totally not facetious) answer is usually: “How long is a piece of string?”

The beauty of AdWords lies in the kinds of keywords you’re bidding on, how much you’re bidding, what match types you’re using to capture those words, what negative keywords you’re using, what kind of ad copy you’re writing and the landing pages you’re sending traffic to. Those are a lot of data variables that an account manager doesn’t usually have access to — it’s proprietary client information.

While looking out for the Jones’s isn’t the optimal strategy in the Pay Per Click space — knowing where you’re going wrong can save you time and a lot of un-pulled hair. Small and medium business owners especially don’t have the time or the inclination to run their own AdWords accounts — they prefer to concentrate on their own business practice and rightfully so.

US-based PPC company Wordstream recently launched its Performance Grader tool for free to AdWords users. It’s designed to help millions of small and medium advertisers on Google quickly figure out how they’re doing on AdWords compared to other advertisers within a similar spend bracket.

By allowing the performance grader access to their AdWords data, the performance grader acts as an AdWords data aggregator, allowing advertisers to compare their accounts to “the competition” in their budget subset. Where I’m seeing the obvious value in such a tool is that helps to educate advertisers on where the problem areas within their account are. It’s effectively a peer report card for their AdWords account.

The Performance Grader takes into account aspects like:

Effective use of negative keywords to control spend: Wasted spend is calculated by tracking the number of negative keywords that have been created in the account in the last 90 days and projecting how mow much money could be saved by adding additional negative keywords every month. Whilst this is a good metric to know, what this doesn’t take into account is the non-relevancy score of the negative keywords. You can have as many negative keywords in the account as you want, but it’s the quality of those negatives in the way that they target your traffic that is the key to having them.

Quality Score for text ads and the keywords targeted: Wordstream calculates this based on every single impression (time your ad showed) that you gained in your account. It tells you how you can improve your Quality Score but won’t do it for you automatically which is only half the work done.

Click-through rates on ads: CTR is an indication of how targeted your ads are. It compares how often your ads are seen vs. how often they are clicked on. The thinking behind this is that if your ad is seen a lot and clicked on very little, it’s obviously not relevant to what users are looking for. What this doesn’t take into account is that different types of keywords have different types of CTRs. Brand keywords, for example, typically have higher CTRs than product-type keywords but that doesn’t mean you should rely solely on your brand within the account.

Impression share for ads: this indicates how often your ads are showing. What this doesn’t doesn’t take into account is the effectiveness of that share of the impressions. Your account could be covering 90 percent of the available impressions and only harvesting a miniscule amount of the available clicks.

What excites me the most is the “PPC Best Practices” scorecard which indicates whether or not the account is opted into such aspects as conversion tracking, geo-targeting (essential for small and medium businesses) and usage of ad-extensions like site-links and business phone numbers.

Without having used this tool myself I can safely vouch for the education factor with regards to learning about best practices — where I feel the tool falls short is in the actual interpretation of the data and the application of the findings. The trend is there, but it’s early days yet.