Winning Results with Google AdWords Second Edition_1 potx

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Winning Results with
Google AdWords
Second Edition
About the Author
Andrew Goodman is founder and president of Page Zero Media, a Toronto-based search
marketing agency offering full-service campaign management for paid search as well as a variety
of related online marketing services for growth-oriented clients such as E*TRADE, Canon, Etsy,
Business and Legal Reports, Canadian Tire, and Torstar Digital. His blog, Traffick.com, has
framed many of the debates in the industry, dating back to 1999. A globally recognized speaker
(including an integral role in over 30 Search Engine Strategies conferences dating back to 2002),
he has served as Program Chair for Search Engine Strategies Toronto for the past two years.
His columns appear regularly in publications such as Search Engine Land, and his sound bites
frequently show up in major media, including The New York Times, The Globe and Mail, The
Washington Post, Fortune Small Business, Business News Network, and Marketing Magazine.
Andrew is also a cofounder of HomeStars, a dot-com startup in the home improvement space. He
served as VP, Strategy for HomeStars from 2007 through 2008.
For relaxation, Andrew enjoys inline skating in west end Toronto (sometimes into hostile
crowds of picnickers), extreme gardening, watching the Weather Channel, and long walks on
Cuban beaches. He shares most of these experiences with his wife, Carolyn Bassett.
About the Technical Editor
Matt Van Wagner is President and founder of Find Me Faster (www.findmefaster.com), a search
engine marketing firm based in Nashua, New Hampshire, and product architect for DEKE,
an ad simulator and quality control application for the Google AdWords DKI Ad function.
Matt is a member of Search Engine Marketing New England (SEMNE) and Search Engine
Marketing Professionals Organization (SEMPO), and is a courseware developer for the SEMPO
Institute. Matt writes occasionally about the Internet, search engines, and technology for iMedia
Connection, New Hampshire Business Review, and other publications. He has served as a
technical editor for Mona Elesseily’s Yahoo! Search Marketing Handbook. Matt holds a BS in
Economics from St. Lawrence University, Canton, New York, and an MBA from Rivier College,
Nashua, New Hampshire.

Winning Results with
Google AdWords
Second Edition
Andrew Goodman
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For Bill Gates
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Contents at a Glance
PART I The Paid Search Opportunity
1 How Big Is This Market? The Rapid Rise of Paid Search . . . . . . . . . . . . . 3
2 A $21 Billion Afterthought: How Google Entered
the Advertising Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
PART II How to Play the AdWords Game
3 First Principles for Reaching Customers Through AdWords . . . . . . . . . . . 71
4 Setting Up Ad Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
5 How Google Ranks Ads: Quality-Based Bidding . . . . . . . . . . . . . . . . . . . 133
6 Big-Picture Planning and Making the Case to the Boss . . . . . . . . . . . . . . 155
PART III Intermediate-Level Strategies
7 Keyword Selection and Bidding: Tapping into
Powerful AdWords Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
8 Writing Winning Ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
9 Expanding Your Ad Distribution: Opportunities and Pitfalls . . . . . . . . . . . 245
PART IV Winning the AdWords Game: Advanced Issues
10 Measuring Success: A “What’s Changed” Report . . . . . . . . . . . . . . . . . . . 267
11 Increasing Online Conversion Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283

12 Online Targeting 1995–2015: Fast Start, Exciting Future . . . . . . . . . . . . . 335
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367
vii
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Contents
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiii
PART I The Paid Search Opportunity
CHAPTER 1 How Big Is This Market? The Rapid Rise of Paid Search . . . . . . . . . 3
Targeted Advertising vs. Surplus Interruption . . . . . . . . . . . . . . . . . . . . 4
In the Beginning: Advertising on the Internet . . . . . . . . . . . . . . . . . . . . . 7
Mass Marketing Inertia: Why Do the Old Ways Persist? . . . . . . . 8
Google’s Unassuming, Yet Butt-Kicking, Beginnings . . . . . . . . . 9
Search Marketing Facts and Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Size of the Advertising Market . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Size of the Online Advertising Market . . . . . . . . . . . . . . . . . . . . . 12
The Growth of Search Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Search Engine User Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Types of Search Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Why Pay for Search Traffic? Isn’t It Free? . . . . . . . . . . . . . . . . . . . . . . . 22
Screen Real Estate, Location of Listings . . . . . . . . . . . . . . . . . . . 22
Some Ads Are More Relevant . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Post-“Florida” Fallout: Algorithmic Changes . . . . . . . . . . . . . . . 22
Control Over Message, Navigation, Timing, Exposure . . . . . . . . 25
Noncommercial Sites and the Organic Results . . . . . . . . . . . . . . 26
Organic and Paid Search Strategies: Not Mutually Exclusive . . . 27
CHAPTER 2 A $21 Billion Afterthought: How Google
Entered the Advertising Market . . . . . . . . . . . . . . . . . . . . . . . . . . 33
AdWords Gets Its Start . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

How to “Speak Google”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Google Responds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Predecessors and Competitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Major Predecessors in Search . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Major Predecessors in Paid Search . . . . . . . . . . . . . . . . . . . . . . . 44
ix
x Winning Results with Google AdWords
The Growth and Evolution of AdWords . . . . . . . . . . . . . . . . . . . . . . . . . 50
Early Version Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Google as Referee: Complications of Multiple Stakeholders . . . 52
How Google’s DNA Influences the AdWords Game . . . . . . . . . . 57
PART II How to Play the AdWords Game
CHAPTER 3 First Principles for Reaching Customers Through AdWords . . . . . . 71
Through the User’s Eyes: Profit by Understanding
Searchers’ Love Affair with Google . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Do People Really Look at the Ads on Google? . . . . . . . . . . . . . . 79
Why Users Love Google . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
More Thoughts on User Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Measurable and Nonintrusive: The AdWords Difference . . . . . . . . . . . . 84
Request Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Google Calls It “ROI Marketing” (Not “Spend and Hope”) . . . . 85
Fast Feedback Cycles and Rapid Evolution . . . . . . . . . . . . . . . . . 86
Online Advertising Pricing: Why Pay per Click? . . . . . . . . . . . . . 87
Self-Serve, Pay as You Go, and Self-Learning . . . . . . . . . . . . . . . 89
A Sales-Generation Machine That’s Yours to Keep . . . . . . . . . . . 90
Before You Start: Planning, Third-Party Tools, and a Reminder . . . . . . 92
Work Backwards: Assess Which Third-Party
Tools Will Be Needed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Real-Time Auction on Keywords and Phrases . . . . . . . . . . . . . . . 93
Billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94

Key Metrics and Terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Impressions, Clicks, and Clickthrough Rate . . . . . . . . . . . . . . . . 94
Cost per Click, Maximum Bid, Bid Discounter, Total Cost . . . . . 95
Ad Position, Bidding Wars, and Reverse Bidding Wars . . . . . . . . 99
Limit Vanity Searching Internal to Your Company . . . . . . . . . . . 100
Conversion Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Return on Investment (ROI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Account Basics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Structure: Accounts, Campaigns, Groups . . . . . . . . . . . . . . . . . . 102
Entering Basic Account Information . . . . . . . . . . . . . . . . . . . . . . 103
Key Campaign-Level Settings and Possible Opt-Outs . . . . . . . . . 106
CHAPTER 4 Setting Up Ad Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Why Grouping Keywords Makes So Much Sense . . . . . . . . . . . . . . . . . 116
Google’s Strange Advice on Ad Group Size . . . . . . . . . . . . . . . . 120
Getting Very Granular with Groups . . . . . . . . . . . . . . . . . . . . . . . 121
Organize, Organize, Organize . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Multiple Persons Managing the Account . . . . . . . . . . . . . . . . . . . 122
Post-Click Tracking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
Contents xi
Bottom-Line Performance (Ads Match Keywords) . . . . . . . . . . . 123
Avoiding the Horrors of Overlap . . . . . . . . . . . . . . . . . . . . . . . . . 124
Naming Campaigns and Groups . . . . . . . . . . . . . . . . . . . . . . . . . 125
You’re in Charge: Reevaluate Structure Every Few Quarters . . . 125
Writing Your First Ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
Editorial Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Responding to Controversial Editorial Disapprovals . . . . . . . . . . 127
Quick Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
Time Lags and Special Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
CHAPTER 5 How Google Ranks Ads: Quality-Based Bidding . . . . . . . . . . . . . . . . 133
Encapsulating the Concept of Quality-Based Bidding . . . . . . . . . . . . . . 135

Quality Scores Are Based on (at Least) Three Broad Types of Data . . . 135
Historical Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Predictive Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Opinion and Arbitrary Determinations . . . . . . . . . . . . . . . . . . . . . 137
Paid Search Ranking Formulas: Past, Present, and Future . . . . . . . . . . . 137
Paid Search 1.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
AdWords 1.0 and 2.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
AdWords 2.5 and 2.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
AdWords 3.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
How Ad Ranking Works: The Letter of the Law, and Beyond . . . . . . . . 139
The Goal Hasn’t Changed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139
Keyword Quality Score for Ad Ranking . . . . . . . . . . . . . . . . . . . 140
Keyword Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Landing Page and Website Quality . . . . . . . . . . . . . . . . . . . . . . . 142
Content Is Separate from Search . . . . . . . . . . . . . . . . . . . . . . . . . 143
Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
Big Hair and Mistaken Identity: Is Google
Thin-Slicing You into the Doghouse? . . . . . . . . . . . . . . . . . . . . 144
Case Study 1: Media Company, Slow “Quality
Score Digout” Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Case Study 2: HomeStars, Tighter Targeting
and Speculation on Website Quality Issues . . . . . . . . . . . . . . . 147
Addendum: AdWords 2.7—The Latest Development
in Quality-Based Bidding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
Fixed Minimum Bids Are Gone, Because Quality
Score Is Now Calculated in Real Time per Query . . . . . . . . . . 150
Keywords Are Never, Technically, Inactive . . . . . . . . . . . . . . . . . 151
“First-Page Bid” Offered as a Data Point . . . . . . . . . . . . . . . . . . . 152
Quality Score Detail Intact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
Glass-Half-Full Reaction: New Opportunities . . . . . . . . . . . . . . . 152

What Hasn’t Changed: Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . 152
xii Winning Results with Google AdWords
CHAPTER 6 Big-Picture Planning and Making the Case to the Boss . . . . . . . . . . 155
How Valuable Is Search Engine Marketing to Your Business? . . . . . . . . 155
Strategies for Small vs. Large Companies:
How Different Are They? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
What about Affiliate Marketing? . . . . . . . . . . . . . . . . . . . . . . . . . 159
B2B, Retail, Independent Professional, or Informational—
What Is Your Business Model? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Business-to-Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Business-to-Consumer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Professional Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Information Publishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163
Assess Your Sales Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
What’s Your Goal: Retail Sales, Leads,
Registrations, Buzz, Subscriptions? . . . . . . . . . . . . . . . . . . . . . 165
Cost per Acquisition, Cost per Order:
Two Brief Case Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169
Difficulties in Forecasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Forecasting Cost per Click and Click Volume . . . . . . . . . . . . . . . 173
Forecasting Clickthrough Rates and Conversion Rates . . . . . . . . 175
An Alternative to Forecasting: A $2,000 “Testing Budget” . . . . . 175
PART III Intermediate-Level Strategies
CHAPTER 7 Keyword Selection and Bidding: Tapping into
Powerful AdWords Features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
How Matching Options Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
Exact, Broad, and Phrase Matching . . . . . . . . . . . . . . . . . . . . . . . 181
CPCs on Different Matching Options . . . . . . . . . . . . . . . . . . . . . 185
Keyword Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
The Google AdWords Keyword Tool . . . . . . . . . . . . . . . . . . . . . . 185

Keyword Research Tools and Tips . . . . . . . . . . . . . . . . . . . . . . . . 187
Keywords You’re Already Using . . . . . . . . . . . . . . . . . . . . . . . . . 191
Examples of Unsold Keyword Inventory . . . . . . . . . . . . . . . . . . . 191
Benefits of Being the Only Advertiser on a Phrase . . . . . . . . . . . 193
Keyword Brainstorming: It’s about Them . . . . . . . . . . . . . . . . . . . . . . . . 195
Solve Your Target Market’s Problems . . . . . . . . . . . . . . . . . . . . . 196
Keyword Variations: Plurals, Verb Forms, and Misspellings . . . . 199
Going Narrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201
Keyword Progression, Initial Quality Scores, and Troubleshooting . . . . 202
Proceeding with Caution to Avoid Low Initial Scores . . . . . . . . . 202
Disapproved Keywords . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
Approaches to Bidding and Ad Position . . . . . . . . . . . . . . . . . . . . . . . . . 203
What Do We Know about Ad Position and Visibility? . . . . . . . . . 203
Do Your Bids Have a Sensible Purpose? . . . . . . . . . . . . . . . . . . . 205
Contents xiii
Set and Forget? Using Goal-Based Bid Management Tools . . . . 205
How to Use Powerposting to Bid at the Keyword Level . . . . . . . 207
Making Bulk Changes Quickly with the AdWords Editor . . . . . . 208
Software Saves Time with Keyword-Level Tracking . . . . . . . . . . 209
Dayparting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209
Dealing with Foolish (or Rich) Competitors . . . . . . . . . . . . . . . . 210
CHAPTER 8 Writing Winning Ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
Targeting and Testing: Key Principles of Web Advertising . . . . . . . . . . 213
Imagine the “Perfect Ad” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
Cater to People and Keep Yourself in the Game . . . . . . . . . . . . . 214
How Your Ads Look to the User . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
Impact of Media Type and Location . . . . . . . . . . . . . . . . . . . . . . 215
Fitting Big Ideas into Small Spaces . . . . . . . . . . . . . . . . . . . . . . . 216
Adopting the Right Tone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216
Addressing Multiple Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . 221

Maintaining Accuracy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224
Getting the Most Out of Your AdWords Ads . . . . . . . . . . . . . . . . . . . . . . 225
A Technique for Ad Refinement in Stages . . . . . . . . . . . . . . . . . . 225
Getting Help from the Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Six Rules for Better AdWords Copy . . . . . . . . . . . . . . . . . . . . . . 228
Some Ideas for Testing Ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
How Split-Testing Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Ideas for What Variables to Test . . . . . . . . . . . . . . . . . . . . . . . . . . 233
Tracking Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
Statistical Significance in Testing . . . . . . . . . . . . . . . . . . . . . . . . 241
Moving from Ad Content to Campaign . . . . . . . . . . . . . . . . . . . . . . . . . 242
CHAPTER 9 Expanding Your Ad Distribution: Opportunities and Pitfalls . . . . . 245
Getting the Most Out of the Keywords You Know . . . . . . . . . . . . . . . . . 246
Deal with Your Lowest-Quality Keywords . . . . . . . . . . . . . . . . . . 246
Two-Word Broad Matching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248
Expanded Broad Matching: Disable Only if Necessary . . . . . . . . 248
One-Word Broad Matching + Negative Keywords . . . . . . . . . . . 249
Advanced Technique: “Go for the Tail” . . . . . . . . . . . . . . . . . . . . 250
Building on Success: Hypothesize, Extrapolate, and Profit . . . . . 252
Upping the Bid and Movin’ On Up . . . . . . . . . . . . . . . . . . . . . . . 253
Content-Targeted, or Contextual, Ads: Take a Second Look . . . . . . . . . 254
Ads Appearing near Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254
Advanced Uses of Content Targeting: Current Affairs . . . . . . . . . 258
Trademarks as Keywords (“Competitor Words”) . . . . . . . . . . . . . . . . . . 259
Exporting Your Successful AdWords Campaign . . . . . . . . . . . . . . . . . . . 260
Google’s Main Competitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260
Google Ad Planner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
Offline Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
xiv Winning Results with Google AdWords
PART IV Winning the AdWords Game: Advanced Issues

CHAPTER 10 Measuring Success: A “What’s Changed” Report . . . . . . . . . . . . . . . 267
What to Measure, How to Manage: Skinny Summary . . . . . . . . . . . . . . 268
How Tracking Works . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268
The World Isn’t Perfect, and Neither Is Web Analytics . . . . . . . . 269
What You Need to Track: Metrics to Consider . . . . . . . . . . . . . . . 269
Measuring Success: “What’s Changed” Report . . . . . . . . . . . . . . . . . . . 270
Analytics as an “Industry” Has Exploded . . . . . . . . . . . . . . . . . . 270
Urchin Rules the High Seas . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271
AdWords Conversion Optimizer . . . . . . . . . . . . . . . . . . . . . . . . . 274
Quality-Based Bidding and Instability . . . . . . . . . . . . . . . . . . . . . 276
Marketers Are Using Analytics to
Test Sophisticated Theories . . . . . . . . . . . . . . . . . . . . . . . . . . . 276
Marketers Understand That “Analytics”
(Relevant Statistics) Live Right Inside AdWords . . . . . . . . . . . 277
CPCs Have Increased and Competition Has Intensified . . . . . . . 278
What Hasn’t Changed (But There Is Always Hope) . . . . . . . . . . . . . . . . 279
CHAPTER 11 Increasing Online Conversion Rates . . . . . . . . . . . . . . . . . . . . . . . . 283
Conversion Science Isn’t a Beauty Contest . . . . . . . . . . . . . . . . . . . . . . 285
What and How to Test Depends on Business Type . . . . . . . . . . . . . . . . . 286
The Discovery of Scent: God’s Gift to Interface Designers? . . . . . . . . . 287
Common Errors That Kill Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . 289
Error #1: Not Understanding What a Landing Page Is . . . . . . . . . 289
Error #2: Overloading the Landing Page with Information . . . . . 290
Error #3: Assuming That the Best Landing Page
Is the Home Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291
Error #4: Assuming That the Best Landing Page
Is a Bare Contact Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293
Error #5: Assuming That the Best Copy Is Brief Copy . . . . . . . . 294
Insights Leading to Principles: How Case Study Data
Leads Us to Conversion “Schools of Thought” . . . . . . . . . . . . . . . . . 296

Case Approaches: Tinkering for Dollars—It Worked! . . . . . . . . . 297
Are We Plumbers or Persuaders? . . . . . . . . . . . . . . . . . . . . . . . . . 297
Remove Barriers to Conversion (Unclog the Plumbing) . . . . . . . 299
Persuade, Convince, Use Psychology
(Persuasion and Storytelling) . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Testing Protocols: Best Practice; A/B/C; Multivariate . . . . . . . . . . . . . . 304
“Testing” Method #1: Be a Lot Better from the Start . . . . . . . . . 305
A/B, or A/B/C, Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306
Multivariate Testing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312
Contents xv
What Are Typical Conversion Rates? . . . . . . . . . . . . . . . . . . . . . . . . . . . 320
Retail Landing Page Design: Focus vs. Selection . . . . . . . . . . . . . . . . . . 321
Category Page vs. Single-Product Page . . . . . . . . . . . . . . . . . . . . 321
Ensure Keywords Are on the Landing Page . . . . . . . . . . . . . . . . . 324
Web Credibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325
B. J. Fogg and Stanford Research on Web Credibility . . . . . . . . . 325
Don’t Neglect Site Search . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326
Factors Outside Your Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327
Seasonality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327
Hot Sectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327
360-Degree View: Create a Good Conversion Environment . . . . . . . . . . 328
Leveraging Feel and Brand in Small Retail Operations . . . . . . . . . . . . . 328
Summing Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330
CHAPTER 12 Online Targeting 1995–2015: Fast Start, Exciting Future . . . . . . . . 335
Google AdWords: Emerging Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339
Google Projects to Watch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340
Google Chrome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340
Google Product Search and Google Checkout . . . . . . . . . . . . . . . 341
Orkut: The Cool Kids Moved On? . . . . . . . . . . . . . . . . . . . . . . . . 341
YouTube . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342

Google Labs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343
The Ecosystem: Google’s Competitors and Partners . . . . . . . . . . . . . . . 345
Google vs. Everybody Else . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345
eBay and Amazon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348
Portal Wars: AOL, Yahoo, MSN, IAC . . . . . . . . . . . . . . . . . . . . . 350
Think Small to Get Big: What Search Marketing
Will Look Like in 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352
The Revolution in Media Buying . . . . . . . . . . . . . . . . . . . . . . . . . 353
A Transparent World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354
The New Geography . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355
Conclusion: What about Peanut Butter? . . . . . . . . . . . . . . . . . . . . . . . . . 360
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367
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xvii
In a short time, Google has become one of the most famous companies in the world, with
its founders themselves transformed into huge celebrities. Little wonder. Millions of people
each day turn to Google for answers to their questions. And Google keeps delivering so well
that—yes—“google” is now a verb many people use to say they searched for something. It’s an
amazing consumer success story.
Google is also famous because those millions of people who google generate billions
of dollars in revenue for Google itself. For many searches, Google shows ads. Unlike most
advertising, these ads—delivered through the Google AdWords program—don’t interrupt what
you’re currently doing. They don’t get in the way of the TV show you’re watching, the next song
you want to hear on the radio, or the article that you were reading until forced to jump to the
back of the magazine, and they don’t become the junk mail you toss into the trash.
Google’s ads are gifts, solutions, answers to questions that people are expressly looking for.
They are the online equivalent of walking into a hardware store and asking for a picture hook
that will work on a hollow wall, walking into a dry cleaner to get a stain removed, or walking
into a hair salon for that desperately needed cut. No one feels a merchant has “interrupted” them
in situations like these. Instead, they likely feel grateful that they got help.

Amazingly, Google offers advertising that helps! Advertising that’s wanted. Advertising
that can make a consumer think, “Thank you!” Google’s ads can be perfectly targeted to an
immediate desire that someone is expressing. That’s why they convert so well for advertisers;
that’s why spending on search advertising continues to rise each year. Search is powerful stuff,
something no advertiser can afford to ignore.
This leads me to another celebrity: Andrew Goodman, author of this book you’re about to
read. Andrew is an AdWords celebrity. Indeed, like the star of a hit film, it might make sense for
people to refer to him with AdWords as part of his name: Andrew “AdWords” Goodman.
For as long as we’ve had Google AdWords, we’ve had Andrew Goodman writing about
the system and how it has evolved, giving advice for those wanting more out of it, and nudging
Google when it needed to make things better to benefit both advertisers and searchers. Receiving
his newsletters is always a delight, despite the fact I need to reserve ample amounts of quiet time
to digest the latest amazing insights he dispenses.
Though his work—newsletters, online forum discussions, conference speeches, e-books,
and here—the second edition of his “real world” book—Andrew has educated thousands of
people. On an ordinary street, he might not seem to have celebrity status. But for those who try
Foreword
xviii Winning Results with Google AdWords
to ferret out how the often secretive and complicated Google AdWords system works,
Andrew’s one of the A-List stars. Indeed, if there were Oscars of the AdWords world, he’d
have a lifetime achievement award.
But what’s there to explain about AdWords? Write a short ad, pick some words you
want it to show up for, decide the maximum amount per click you’re willing to pay, and
click Submit! Google would have you think that’s all there is to it—an almost fire-and-
forget process that starts delivering plentiful quality traffic.
Certainly that can happen in some cases. But AdWords has grown and matured over
the years, as Google has tried to maximize revenues while simultaneously protecting
searchers from seeing irrelevant ads. Quality Score has emerged as a secret weapon that
Google employs—in an automated fashion—to stop “bad” ads dead in their tracks. But
pity the person with a “good” ad that’s accidentally nabbed by the Quality Score arrest

squad. Getting out of the “bad quality jail” may be a costly experience.
Quality Score isn’t the only trap to avoid. Keyword lists can be too long—or
conversely too short! Writing good ad copy when you have a haiku-like maximum of
35 characters per line may sound like a joke. But ad copy does matter, and doing it right
pays off. Having the right landing page—what you show to those who click through from
an ad—also factors into success. And what is “success”? Have you defined your goals
correctly, and are you tracking conversions, when they happen?
That’s a lot to digest. For the newcomer, it might even sound frightening. But that’s
where this book comes in. Andrew has been guiding folks around the AdWords landscape
for years. You’re in good hands. Read on, and enjoy those winning results you heard about
in the book’s title!
Danny Sullivan
Editor-in-Chief, Search Engine Land
xix
Acknowledgments
In the three years between editions of this book, changes in the outside world—as drastic
as many of them have been—seem to pale in comparison to the rapid changes in our
no-longer-little world of search marketing and the business that flows from it. Growth
projections for every aspect of the business have been woefully understated, perhaps most of
all on the financial side. Google’s raw computing power may soon be required to calculate
its annual server and food budget. Should the domestic inflation rate pick up, Google’s U.S.
dollar revenues may soon need to be calculated not merely in gigabucks, but in terabucks or
petabucks. (I don’t know the difference, and this won’t be on the exam.)
Inevitably, then, I have incurred a number of new debts in the past three years, while
(I hope) paying a few debts down as well. Those I acknowledge here are mostly those who
didn’t appear in the first-edition acknowledgments. I’m grateful to all of these friends,
partners, mentors, and colleagues, old and new.
I had the privilege of again working with the ever-savvy, ever-patient acquisitions
editor Megg Morin. The entire McGraw-Hill crew has been thoroughly professional
and I deeply appreciate their talents and support. I have been consistently impressed

with technical editor Matt Van Wagner’s thorough, probing, invariably helpful technical
commentary; nearly as impressed as I was by his pitch-perfect operatic performance
lamenting the absence of Dana Todd in the Paid Search 101 seminar at the Search Engine
Strategies Toronto conference… complete with red wig.
Page Zero colleague and fellow writer and speaker Mona Elesseily has been remarkable
for her consistent drive and appetite for growth, change, and success milestones. In addition,
she has regularly provided vital no-kid-gloves copywriting advice for columns and business
development pitches, feedback on speeches, advice to smile even when I don’t feel like it,
and a lead-by-example campaign to adopt the West Coast lifestyle of green tea, sushi, and
yoga. What is more remarkable is that I am still walking around in spite of my rampant
disregard for nearly all of the above.
It’ll be hard to thank the many readers and collaborators who have come into my life
as a result of the first edition of Winning Results. I’ve had people tell me the book helped
them through decisions to change careers or launch their own agencies; unexpected and
flattering. At Fanshawe College, Liz Gray pioneered one of the world’s first college-level
courses dedicated to search marketing. It’s been a pleasure getting to know her, and her
students.
xx Winning Results with Google AdWords
Business and personal relationships have also been strengthened by author status that seems
to transcend Yet Another Agency Owner status. The growing list on this front is starting to
get away from me also, but I’m grateful for the growing bond with old and new friends in the
Authors Who Also Run Agencies Club; particularly, Bryan Eisenberg and Fredrick Marckini.
Mitch Joel is beginning to write a book, so he counts; more importantly, of late Mitch has been
perhaps the leading figure in knitting together disparate groups of digital marketers in corporate
Canada.
Along with Mitch and also too numerous to cover completely, other members of the Canadian
online marketing scene who have kept the conversation alive include Martin Byrne and Maor
Daniel at Yahoo, Eric Morris at Google, Ken Headrick at Microsoft, Sulemaan Ahmed at Apple,
Ken Schafer at Tucows, fellow search marketing agency owners Gord Hotchkiss of Enquiro and
Jeff Quipp of Search Engine People, and the list goes on at some length.

Moving south of the border, that long list grows even unwieldier. There is only space to
briefly thank a short list of those who have continued to knit the industry together in various
leadership roles (especially, convening meetings and conferences), who have taken time out to
rub elbows as we grab a quick coffee in a fluorescent-lit hallway, or close down another hotel bar
or Italian restaurant in places like London, Stockholm, New York, San Francisco, Toronto, and
other hotspots: Chris Sherman, Jill Whalen, Kevin Ryan, Jim Sterne, Christine Churchill, Danny
Sullivan, Mike Grehan, Ryan Carson, Greg Jarboe, Brett Tabke, Anne Kennedy, Ralph Wilson,
Larry Chase, Rand Fishkin, and the “rest of you know who you are” will have to do. Another list,
of people passionate about search technology, would begin with people like Chris Tolles of Topix
and Rich Skrenta of Blekko, and will have to stop there. I continue to think of Seth Godin as a
mentor, and thank him for keynoting Search Engine Strategies Toronto in 2007. Without naming
all 50,000 individuals, I’m inspired by anyone and everyone in our industry who has wielded a
PowerPoint slide in anger, contributed a pithy blog post, or applauded loudly in the back row of
a search conference keynote in recent years.
Without clients, there would be no book, because I wouldn’t know anything. I’m thankful to
all the Page Zero clients and seminar attendees whose campaigns have helped me and the Page
Zero team acquire a business education we wouldn’t trade for the world.
And who does the stellar work for the clients? Since I don’t work 100 hours a day (only
about 25), the fantastic Page Zero team has been a constant source of encouragement, innovation,
and support in the day-to-day problem solving that separates book learning from running an
actual business.
Over to Google; I’ve become overwhelmed with the sheer headcount in Mountain View
(and their dozens of other facilities around the world). I’ve had the privilege of interacting with
a host of great people. On the AdWords product side, Nick Fox stands out. In addition to patient
explanations of the complexities of Quality Score, Nick (like many Googlers) does a personable
job of outlining the principles of Google’s program to the general public. He, like many
Googlers, is often willing to shuck the strict bonds of public relations spin and to give frank
answers to advertisers’ questions. Also helpful has been Ariel Bardin, who has been involved
with, among other things, AdWords keyword tool development, direction of planning and beta-
testing new AdWords features, and Google Website Optimizer. Tom Leung is among several

others who have provided helpful perspective. Meeting Google salespeople from a variety
of global offices, including Germany and Sweden, has been fun and insightful. Diana
Adair and several others in corporate communications at Google are consistently patient,
professional, and helpful. The same may be said for their counterparts at Microsoft and
Yahoo. To pick one at random, I must thank Kristen Wareham of Yahoo.
A key point of contact for larger companies and agencies working with Google is
Google customer support. Today, Google employs a “team” approach to assisting large
or strategic clients, putting three or more support staff with distinct responsibilities at the
disposal of the client. Not only are Google staff helpful in the strictest sense of getting
things accomplished, they’re highly knowledgeable and have helped me understand many
details and nuances of AdWords and marketing in general. I’m grateful for the support of
Stefania Pifer and Rachel Greenberg, and their teams.
To find the time to write a book on top of working at least one full-time job, the
support and love of family are indispensable. Thanks again, Carolyn, Gary, Jean, George,
Norma, and the rest.
Finally, you may find it curious that I’ve dedicated this book to Microsoft founder
Bill Gates. This is meant to be thought-provoking, but not sarcastic. Google stands at the
cusp of what is tempting to glibly call “world domination.” More specifically, though, the
experiences of dominance and monopoly in a key technology field—similar to the path
forged by Microsoft—will become increasingly salient to Google’s decision-making and
identity going forward. With immense power comes an equal dose of responsibility, and a
recognition that long-term survival is impossible without a global network of partnerships
that creates a healthy business ecosystem, as opposed to a dominant player simply
“sucking all the oxygen out of the room.” On top of that, it’s worth noting that at the end
of the day, Bill Gates did not skimp, or pursue what anyone could characterize as a “pet
project,” when it came to putting his immense wealth to work for philanthropic purposes;
much of the emphasis is on eradicating African poverty and disease. Google’s founders,
for their part, have already shown keen interest in solving universal human problems,
such as clean power generation. Should Google grow beyond even Microsoft proportions,
the quick-and-dirty moral yardstick “don’t be evil” will be nearly impossible to live up

to except perhaps in relative terms. As prosaic as it sounds, when the history is written,
Google will ultimately be compared with Microsoft. There is always a risk that Google,
like Microsoft, will manage to negate a great deal of the good they do, but already balance
seems to be entering the equation. Exciting challenges lie ahead for Google, their global
partners, and the rest of connected society, who increasingly work and live in Google’s
shadow.
Acknowledgments xxi
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xxiii
Introduction
As with the previous edition of Winning Results, Chapters 1 and 2 are vital for newcomers
and analysts, as they put things into context. If you’re an impatient type or already up to
speed on the industry, feel free to skip ahead, though you’ll be missing some important
data. I look at the history of search advertising, and how it fits in with the attention
economy as a whole. In addition, I address the current economic proportions of various
types of related advertising, along with AdWords. In these chapters you’ll get some
opinionated characterizations as to what makes many other forms of advertising less
effective than AdWords.
Chapter 3 gives you a feel for what a searcher’s experience may be like. Here I attempt
to address some top-level principles of AdWords marketing as a lead-in to more tactical
chapters. I address some myths about searcher behavior, as well. In Chapter 4, I plunge
right into the meat of how the Google AdWords interface works and the vital early going
of setting up your account with campaigns and groups of keywords. In Chapter 5, I discuss
the all-important issue of how Google ranks ads on the page, with a new formula called
Quality Score that is a significant departure from their previous AdRank formula. If you
don’t grasp this chapter, then you won’t understand how Google thinks or, for that matter,
how customers think, and your volume and campaign economics will suffer. In Chapter
6, for the benefit of folks who have an organization to report to, I address the best ways
of making economic projections, planning related initiatives, and getting buy-in at your
company.

In Chapter 7, I drill down farther into the world of keyword research strategies and
tactics. I also cover another core determinant of success: bidding strategy. In Chapter 8,
I provide plenty of ideas for how to write and test ads; both quick tips and examples, and
suggested testing methods for those who want to move through intermediate to advanced
methodologies. In Chapter 9, I address the “high degree of difficulty” task of taking a
profitable campaign and fanning it out to increase total profit.
I discuss analytics, or “measuring success,” in Chapter 10. Like Chapter 11, this
chapter could have come much earlier in the book, philosophically speaking. I cover
what to measure and why, what you can do to pull valuable information easily out of
the AdWords interface, and the ins and outs of using core features of Google Analytics,
Google’s website behavior measurement tool. Chapter 11 could be a book in itself, and
xxiv Winning Results with Google AdWords
again in a philosophical sense you could easily cite it as the most important chapter in the book,
as it addresses the issue of converting website visitors into buyers, along with related issues like
web credibility, how to test landing pages, and the concept of information scent.
Finally, in Chapter 12, I take another crack at pulling out the old crystal ball to ask what’s
next, both for you the advertiser and for Google, in an increasingly competitive market for
consumer attention and eyeballs. Among topics barely on my radar when I wrote the first edition
of this book in 2005 are phenomena like social media and Google’s ownership of YouTube.