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 New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Sydney Toronto Copyright © 2009 by The McGraw-Hill Companies. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. 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Your right to use the work may be terminated if you fail to comply with these terms. THE WORK IS PROVIDED “AS IS.” McGRAW-HILL AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MER- CHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. McGraw-Hill and its licensors do not warrant or guarantee that the func- tions contained in the work will meet your requirements or that its operation will be uninterrupted or error free. Neither McGraw-Hill nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages result- ing therefrom. McGraw-Hill has no responsibility for the content of any information accessed through the work. Under no circumstances shall McGraw-Hill and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages. This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise. For Bill Gates This page intentionally left blank 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 This page intentionally left blank 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
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