larry kim's keynote for the local social, richardson, tx, october 23, 2014

CONFIDENTIAL – DO NOT DISTRIBUTE 1

Hacking AdWords – Winning at PPC the Weird Way(and the Future of PPC Marketing)

Hacking AdWords – Winning at PPC the Weird Way(and the Future of PPC Marketing)

Larry Kim, Founder/CTO, WordStreamOctober 23, 2014

About Me

Larry Kim (@larrykim)• Founder & CTO of WordStream

• Commander of the Google AdWords Quality Score Rebellion

• Had a Kid 5 Months Ago (#ppckid)

@larrykim #LS2014

Today’s Agenda: Hacking AdWords

1. How AdWords Really Works

2. Winning at AdWords the Weird Way

– Killer Ads– Crazy Offers– Hacking the Google Display

Network

3. Key Trends Influencing PPC Marketing in 2015!

@larrykim #LS2014


Pick the Red or Blue Pill

Slides are Available For Download!

• http://bit.ly/thelocalsocial

@larrykim #LS2014

Rules of the

AdWords Game

Understanding the AdWords Auction


Why Does Quality Score

Matter?

Quality Score Impacts Ad Position

• AdWords is Like Real Estate: It’s all about Location!

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Cost Per Conversion Greatly Impacted by QS

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Impression Share vs. Quality Score


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Impr. Share 2x More Competitive on Mobile


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• Low QS means…– Lower ad positions– Low impression share (and even less on mobile)– Huge CPC penalties (+400% Tax)– Higher Cost Per Conversion (+64%)

Quality Score: Quick Summary

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So Get a HIGH Quality Score!

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How isQuality Score Calculated?

This is The Expected (Average) Ad CTR

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QS is Based on Your CTR vs. Expected CTR!

Above Avg.

CTR = Higher

QS

Above Avg.

CTR = Higher

QS

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But High QS Not Possible In My Industry!

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B2B Industry Quality Scores

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Finance Industry Quality Scores

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Ecommerce Industry Quality Scores

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But Google Says Don’t Obsess Over QS!

Larry Kim (@larrykim) #wordstream

Ignore This Garbage…

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What’s an Average Quality Score in 2014?

Avg. Quality Score Has Been Falling.

• Today, average score is 5/10. Previously was 7/10!

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So What To Do With My Keywords?

• If Your Keyword’s Quality Score is…

– 1 to 3: Delete Immediately

– 4 to 6: Fix / Optimize

– 7 to 10: Don’t Mess with Success

@larrykim #LS2014

“Low CTR” = Losing PPC Strategy

The High CTR Game for AdWords

1. Be Very Picky. Bid on Only the Best Keywords and Get HIGH CTRs.

2. Delete Junk Keywords (Bottom Third of your Account). Reallocate to Remarketing.

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How To WriteInsanely Great PPC Ads(The Key for High CTR)

•Ad A• 2,423 Impressions• 453 clicks (1.4% CTR)• Average Position: 2.8

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

Which Ad Wins?

Trick Question! They Both Suck

•Neither ad is worth declaring a “Winner”.

•Not even the 2.1% CTR in the 3.0 Avg. Position.

•Why??

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What’s a Good CTR?

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• Even the “Winner” is a Loser!


Your “Winning” Ad Might Be Crap

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How Great Can My CTR Be??

(You’d be surprised)

Click Through Rate Varies A Lot!!

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Some Ads Do 2x, 3x or 6x Above Avg!?

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Donkeys vs. Unicorns

Percentile Vs. Expected CTR

Name

Bottom 50% Below Expected CTR

Donkeys

Top 15% 2X Higher OK

Top 5% 3x Higher Great

Top 1% 6x Higher!! Unicorns

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@larrykim

Ad Unicorns?! (6x Avg. CTR!)

Ad Text Testing

• Same Story – 20% of Ads Generate 92% of Spend• 20% of Ads Generated 65% of Impressions• But CPA, CTR, and Conversion Rates vary

@larrykim, @perrymarshall

1. Keywords With High Commercial Intent

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Does Dynamic Keyword Insertion Matter?

What is Dynamic Keyword Insertion?

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2. Dynamic Keyword Insertion (DKI)

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2. DKI Doesn’t Produce As Many Unicorns

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Do Ad Extensions

Matter?

3. Ad Extensions Impact on Click Through Rate

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3. Ad Extensions Impact on Quality Scores

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How To Write “Unicorn” Ads

4. Most Ads Suck. Create Emotional Ads.

53@larrykim #LS2014

Creating “Emotional” Ads

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This Ad Does 6x The Avg. CTR

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Because Everyone Else is Crap…

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You Need To Test 100 Ads To Find 1

Unicorn.

Unicorns are Rare

Name Percentile Relative Abundance

Vs. Expected CTR

Pretty Good Top 15% 1:6.7 2X Higher

Contender Top 5% 1:20 3x Higher

Unicorns Top 1% 1:100 6x Higher!!

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You’re Not Testing as Many Ads as You Think…

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It’s Not as Hard As You Think

Most Small Businesses Aren’t That Active

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85% of Impressions are From 5% of Ads

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Insanely GreatOffers

What’s a Good Conversion Rate?

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Donkeys vs. Unicorns

Donkey vs. Unicorns

Distribution Point

Conversion Rate

Vs Average Comments

Average 2.35% Donkeys

Top 25% 5.31% 2x Good

Top 10% 11.45% 3-5x Unicorns!!

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“top 10% have a CVR 3-5x average” rule

Distribution Point

All accounts

Ecommerce Legal B2B Finance

Median Conversion

Rate

2.35% 1.84% 2.07% 2.23% 5.01%

Top 25% Conversion

Rate

5.31% 3.71% 4.12% 4.31% 11.19%

Top 10% Conversion

Rate

11.45% 6.25% 6.46% 11.70% 24.48%

@larrykim #LS2014

@larrykim

Landing Page Unicorns?! (3-5x Avg. Conversion Rate!)

The Great Landing Page Optimization Fairy Tale

• We Changed the: – Font Type– Spacing– Button Color– Image– Etc.

• We got a 5% Increase in Conversions!!*

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Typical Conversion Rate Optimization Test

• PTD- Premature Testing Dilemma (aka “Optimizatitis”)– The Early Lead Disappears!

– We want to believe our hard work paid off but we are often deluding ourselves…

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A/B Testing is Over-Rated

• Small Changes Result in Small Changes

• The x% Increase you think you got probably isn’t significant!

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Re-Arranging Deck Chairs On the Titanic

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Aim For 2-5x Increases Not 2-5%!

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What Do Landing Page

Unicorns Look Like?

1. Change The Offer

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The New Offer:

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How to Know if your Offer Stinks

• Average or Below Average Conversion Rates

• Ask Your Customer!

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2. Change The Flow.

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2. New Flow: Registration At End

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You Need To Try Out 10 Offers To Find 1 Unicorn

Donkeys Outnumber Unicorns

Name Percentile Relative Abundance

Vs. Expected Conversion Rate

Awesome Landing Pages

Top 25% 1:4 2x Higher

Unicorns Top 10% 1:10 5x Higher!!

@larrykim #LS2014

Larry Kim (@larrykim)

This is the same landing page with different spacing…

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It’s Easier Than it Seems

80% of Traffic Goes to 10% of Landing Pages

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The Bar is Very Low

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Hacking The Google Display Network

Quality Score Exists on Display Network, Too.


Higher CTR = Lower

CPC

Higher CTR = Lower

CPC

0.1% increase/decrease in CTR yields ~20% change in CPC!

The Hack: Create Display Ads withVery High CTR (Quality Score)!!


1. Push Ads To Your Offers

@larrykim #LS2014

Do a Conversion Path Analysis

Define audience segments using the pages that most often lead to a conversion event

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2. Push Display Ads to Your Content

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5% of Content = 50% of Social Media Engagement

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These Emotions Make People Click on Things

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Display Ads Should Look More Content…

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Don’t Settle For Average – Be a Unicorn Among a Sea of Donkey Advertisers!

PPC Marketing in 2015 and Beyond! 4 Key Trends.

1. CPCs for Paid Search at All Time High

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Apps are Stealing from Searches!

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High CPCs, No Growth in Searches (Yikes!)

• Only way to win is to be more picky in Paid Search!– Location/Time/Device/Demographic Bid Modifiers – New Demographic Targeting Options– Buy Fewer, More Valuable Clicks

• Growth Will Come From Display Ads That Have 10x More Inventory, 1/3rd Avg. CPC

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2. The Rise of Identity Based Marketing

Future of PPC More Like Email Marketing

Email Marketing

• Limit Number of Blasts To Reduce Unsubscribes

• 0.5-2% Unsubscribes Each Blast

• People Need To Opt Into Your List

• Tons of Unqualified Emails on the List

People-Based Marketing

• N/A

• N/A

• N/A

• N/A

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3. Google Taking Away All Our Toys!

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No More Device Targeting!

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Focus On PPC Strategy & Creative Instead

Type of Optimization

Impact of Optimization

Match Type Stratification

~10-30%

Device Targeting ~10-30%Ad Text Optimization

3-6x

Landing Page Optimization

3-5x

Focus Here!

@larrykim #LS2014

4. Convergence of Paid Social & Content Marketing

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5 Minutes before doing the only paid social session at the HubSpot Inbound Marketing Conference last month.

4. Convergence of Paid Social & Content Marketing

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Convergence of Paid Social & Content Marketing


Cross Functional Integrated Marketing Teams To Rule The Funnel From Top to Bottom

Summary: What Does it All Mean?

1. Be a Unicorn Among a Sea of Donkey Advertisers (Just Say No to Low CTR!)

2. Challenging Yet Exciting Future for PPC Marketing Ahead!

@larrykim #LS2014

Thank You!!

Slides: http://bit.ly/thelocalsocial@larrykim #LS2014