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Friday, January 30, 2009

AdWords Ad Serving: Optimize vs Rotate Evenly

I read all sorts of paid search blogs and forums. I have a few hundred in my reader and typically ad at least one or two new ones a week. A lot of those blogs include best practices, common mistakes to avoid and other tips for AdWords advertisers new and seasoned alike. A common tip/best practice that's often included is about ad serving and whether "optimize" or "rotate evenly" is the best setting to start with. By default, Google sets new campaigns to the optimized option.

The optimized ad serving option is typically dismissed by search marketers as a money grab for Google - Google optimizes based on CTR. A higher CTR means more clicks and more money for Google. More and more guides and best practice documents insist that the rotate ads evenly option is the better of the two and only an uniformed amateur would ever use the optimized setting. This is a perfectly logical argument. Search marketers - at least every one that I've ever met, optimizes to conversions and related metrics. A high CTR is nice but it won't pay the bills or bring in new business...unless of course you happen to be Google.

That said, I have to disagree with the assertion that "rotate evenly" is a best practice, should be a default account setting or is only used by the mis or uniformed. I typically start almost every new account/campaign with optimize as my default setting, and I do it on purpose.

I've found that the optimize setting does do a great job of serving the ad with the highest likelihood of receiving a click. In round 1 testing I like to take 2 - 4 ads that test various messaging elements and let the optimized ad serving setting show me with has the best CTR. Serving the ad with the highest CTR helps your quality score which in turn helps reduce your actual CPC which in the long run will have a positive impact on your campaign ROI.

After I let the ads run for bit under the optmized setting I take the top ad (in terms of CTR) and use that as the basis for my next round of testing. In round 2 I switch ad delivery to the rotate evenly option and typically test 1 or 2 ads (building on the ad elements that "worked") vs the "control" ad I established in round 1. I already know that the control ad from round 1 has a great CTR so now I can focus on finding the balance between CTR and cost per conversion, and I'm likely doing so at a lower CPC due to the higher quality score my high CTR ad earned in round 1 of testing. I feel that this method of testing gets my ads to where I want them faster, at a lower costs and with less effort. I might even make the argument that this method, not defaulting to rotate ads evenly, is really the best practice advertisers should follow.

That's my opinion, and you know what they say about opinions.

Have a great weekend.

Side suggestion for Google - you should add an ad serving option to optimize to conversion rate instead of CTR. I think some advertisers would love an option like that and we all know that more conversions at a lower cost = more budget dollars for paid search = more money for Google.


8 Comments:

At 1:07 PM, Anonymous Andrea said...

I agree with you totally. I use both, but optimized ad serving always gives us the best result. I changed our whole account over to the even rotation after reading a post on it and this quickly proved to be a bad idea.

 
At 4:25 PM, Blogger Gregory said...

People say a higher CTR increases Quality Score, resulting in lower cost per click, or for the same cost per click your ad will be shown higher on the page.

Have you noticed data showing how big of a factor this actually is?

If I'm getting 2% CTR, and swap in a new ad that gets a 4% CTR, as a general rule will that decrease my cost per click for the same position on the page by 1%, 10%, 50%?

If I leave the same bid in place, will the ad move up one position or many?

I know a lot of other variables affect this. I'm just wondering if you've commonly seen dramatic effects caused by changes in CTR, or whether the changes are mostly too small to notice.

 
At 4:36 PM, Anonymous Anonymous said...

Google are never going to add optimisation to conversion...

Our testing has shown that actually CTR and conversion move in oposite directions. On average across sample areas of a 2million+ keyword account - volume terms (within threshhold) with CTR below average deliver a 35% increase in conversion. This more than covered the so called benefits/savings against the CTR quality score.

 
At 4:33 PM, Blogger Les Miserable said...

I hate letting G pick the ad. Hate it. But I guess the benefits do flow through. But as someone pointed out, often they "pick a winner" too soon.

This comment was VERY interesting - "Our testing has shown that actually CTR and conversion move in oposite directions. On average across sample areas of a 2million+ keyword account - volume terms (within threshhold) with CTR below average deliver a 35% increase in conversion. This more than covered the so called benefits/savings against the CTR quality score."

I've long suspected that - high CTR doesn't necessarily mean conversions does it.

 
At 2:10 AM, Blogger ji said...

This post has been removed by a blog administrator.

 
At 1:46 AM, Anonymous Anonymous said...

This post has been removed by a blog administrator.

 
At 11:02 PM, Anonymous Russ said...

I'm suspect of any default setting in Adwords

 
At 7:57 AM, Anonymous Anonymous said...

Hi, Its great review about the well known in the market of SEO the Goggle Adwords is the important key for the website promoting companies it will so effective in the increasing the page rank of the site..with the help of the Google adwords..
Thanks & Regards
Alana Johnson
datarecoverysoftware.com

 

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