5 ms·

How to waste money in Google Adwords

98 points by hermitcrab 17y ago

tbgvi 17y ago
Some good tips but pretty basic - if you don't know anything about AdWords and you're running ads then take a look. On that note, the #1 dumbest thing I've seen wasting money on AdWords is running an ad for a local business across the whole world. Oops :)
tptacek 17y ago
For what it's worth: this is a micro-ISV guy that patio11 respects (PerfectTablePlan is the Bingo Card Creator of wedding seating plans). This post was less sophisticated than some of what Patrick has written, but you can bet I now have his blog RSS'd.
- andrewljohnson 17y ago
  If that's less sophisticated than a usual post, count me in!
- patio11 17y ago
  In a very real sense, Bingo Card Creator is the Perfect Table Plan of bingo cards. I have a notebook from ~3 years ago somewhere listing audacious dreams for the future. It includes the line "I want to be like Andy Brice when I grow up." (Incidentally, I still have a year or two to go to catch up to where he was 3 years ago.) He's also forgotten more about AdWords than I'll probably ever know. (Note that if you were to graph my ROI on AdWords it would on a very good day hit one of the minima on his graph.)
steveklabnik 17y ago
I'm not sure why, but the negatives really threw me off. I kept thinking, "Wait, you _shouldn't_ do that?"
- tptacek 17y ago
  I had exactly the same problem, I read the hed, then the copy, then had to reread the hed.
- pbhjpbhj 17y ago
  Should definitely rewrite for clarity it's a mess. For example: "My own experiences with Adwords quickly showed me that people will click an ad, even if it isn’t at all relevant to what they are searching for. For example people searching for “747 seating plan” will click on an ad with the title “wedding seating plan”. It is the nature of the web that people are surfing rather than reading, and clicking on an irrelevant ad doesn’t cost them anything [...] you can be sure that I have “747″ set up as a negative keyword." He switches voice within the para and there's not much hint he's doing it.
  - hermitcrab 17y ago
    So how should that paragraph have been written?
    - pbhjpbhj 17y ago
      He's using the supposedly humorous "say the opposite to what you mean" method of blogging. He should just have dropped that right off the bat: My edit: "My experiences with Adwords shows people don't click an advert unless it's relevant to their search. For example, people searching for '747 seating plan' don't click ads for 'wedding seating plans'. People are not surfing the web, rather they are reading. Clicking an irrelevant ad is rare [...] thus I have '747' set up as a negative keyword." Where it says "clicking an irrelevant ad is rare" I'd probably say "following an irrelevant ad leads to virtually zero conversion rate". But I tried not to change the meaning with my edit. FTFY: how did I do? Edit: re-reading the original I can see now that he may not have been continuing his negative voice. He may have posted this para in the positive. It does work either way. So, is he saying people click irrelevant ads, or is he saying they don't?
      - hermitcrab 17y ago
bemmu 17y ago
Isn't it worth bidding up to 99,999...% of your profit, if it really already accounts for all costs?
- dagw 17y ago
  Well no. First of all conversion rates are random and average conversion rates are just averages. You want to give yourself some headroom for volatility and the fact that you simply miscalculated your conversion rate.
- URSpider94 17y ago
  No, and here's why. The goal of selling your software is to make profit, so that's what you maximize. Let's look at some examples for comparison. Alice and Bob are both selling software. Their per-copy expenses are $1. Alice advertises on AdWords for $.10 per click, and has a 10% conversion rate. So, her cost per sale is $2 ($1 cost + $1 AdWords). She sells each copy for $3, making $1 profit. She sells 100 copies per month, making $100. Bob advertises on AdWords for $.199 per click, and has the same 10% conversion rate. His cost per sale is $2.99 ($1 cost + $1.99 AdWords). He sells his software for $3 per copy, making $0.01 profit. Homework questions: how many copies per month does Bob have to sell to make more profit than Alice? Is it likely that an increase in AdWords bid from $.10 to $.19 will drive that kind of difference in click-throughs?
  - joelhaus 17y ago
    The goal is to reach your optimal profit point; where an increase in expenditures would result in a decrease of overall profits. For adsense, this requires careful/constant measurement/iteration. More here: http://en.wikipedia.org/wiki/Profit_maximization#Marginal_cost-marginal_revenue_method http://en.wikipedia.org/wiki/Profit_maximization#Marginal_co... Good article for the adsense illiterate though.
  - bemmu 17y ago
    I think we had a different interpretation of the situation, but let me know if I got something horribly wrong below, because I'd love to know before going out and doing the mistake in the real world. Note I said _bidding_ 99.999% of profit. If Alice makes $1 profit when she bids $.10, then even if she bids $1.10 she would still get all those $.10 clicks and make her $100 profit, but additionally would get some other profitable clicks as well. Does this make sense, or am I misunderstanding something?
jasonlbaptiste 17y ago
someone needs to build stuff that helps developers make money with their apps. we all cant be 37 signals or salesforce, nor want to be, but we all certainly want to sell our software.
callmeed 17y ago
Good stuff as I'm actually about to start some new AdWords campaigns. The 1-day consulting looks interesting too. Anyone use an AdWords consultant (or offer such a service) with good results?
- aarongough 17y ago
  The company I work for does Adwords setup/optimization. I'm not too involved with that side of things, but I know that previous clients have experienced as much as a 250% increase in their business volume after starting adwords campaigns with us (relative to their pre-online-advertising sales) If you're interested check out http://waldendesign.com/ http://waldendesign.com/
fnid2 17y ago
I'll start using Google adwords when they let me pay only for clicks that result in a conversion. They have the technology, put it to use. I'll come write it myself and then pay for the adwords, but I won't pay for adwords until they enable pay for performance for adwords.
- hermitcrab 17y ago
  They do (of sorts), see: http://successfulsoftware.net/2009/07/07/a-test-of-cost-per-action-cpa-vs-cost-per-click-cpc-in-google-adwords/ http://successfulsoftware.net/2009/07/07/a-test-of-cost-per-...
- netcan 17y ago
  They actually did start to role out this kind of thing. At first it was invite only, then available in certain circumstances (place, budget, etc.). I don't think it was very successful. They pulled some of the campaign types associated with these things. It was a sort of automated system for specifying what you would like to pay per conversion and Google guaranteeing that you won't be charged any more for it.. I thin Given your conversion rate performance, it could give you some ppc bid for the system to work with. Then it could "optimise" your system to get you as many conversions as possible at the price you specified. I think the problem was that they had to offer it to customers who were fairly sophisticated already. In the back-end it was really just converting it all back to pay per click anyway (I think). These advertisers were in control of their costs per conversion anyway. All the system really did was (potentially) save them time. But, you lose some flexibility which I think made it not worth much. I found that it performed less well then I could do myself. Now they offer automated bid management, which really does something fairly similar, it automates your campaign for conversions. What they cannot do under their system is offer you X conversions @ Y cost.
- Poiesis 17y ago
  You might find this writeup interesting, then: http://www.kalzumeus.com/2007/11/10/conversion-optimizer-adwords-done-right/ http://www.kalzumeus.com/2007/11/10/conversion-optimizer-adw... (I really need to stop reading so much and start producing...)
mikeyur 17y ago
6. Advertise on the content network (unless doing some branding w/ display ads) 6a. Advertise on content network w/o selecting specific domain names in your niche

98 points by hermitcrab 17y ago

tbgvi 17y ago

Some good tips but pretty basic - if you don't know anything about AdWords and you're running ads then take a look. On that note, the #1 dumbest thing I've seen wasting money on AdWords is running an ad for a local business across the whole world. Oops :)

tptacek 17y ago

For what it's worth: this is a micro-ISV guy that patio11 respects (PerfectTablePlan is the Bingo Card Creator of wedding seating plans). This post was less sophisticated than some of what Patrick has written, but you can bet I now have his blog RSS'd.

andrewljohnson 17y ago
If that's less sophisticated than a usual post, count me in!
patio11 17y ago
In a very real sense, Bingo Card Creator is the Perfect Table Plan of bingo cards. I have a notebook from ~3 years ago somewhere listing audacious dreams for the future. It includes the line "I want to be like Andy Brice when I grow up." (Incidentally, I still have a year or two to go to catch up to where he was 3 years ago.) He's also forgotten more about AdWords than I'll probably ever know. (Note that if you were to graph my ROI on AdWords it would on a very good day hit one of the minima on his graph.)

steveklabnik 17y ago

I'm not sure why, but the negatives really threw me off. I kept thinking, "Wait, you _shouldn't_ do that?"

tptacek 17y ago
I had exactly the same problem, I read the hed, then the copy, then had to reread the hed.
pbhjpbhj 17y ago
Should definitely rewrite for clarity it's a mess. For example: "My own experiences with Adwords quickly showed me that people will click an ad, even if it isn’t at all relevant to what they are searching for. For example people searching for “747 seating plan” will click on an ad with the title “wedding seating plan”. It is the nature of the web that people are surfing rather than reading, and clicking on an irrelevant ad doesn’t cost them anything [...] you can be sure that I have “747″ set up as a negative keyword." He switches voice within the para and there's not much hint he's doing it.
- hermitcrab 17y ago
  So how should that paragraph have been written?
  - pbhjpbhj 17y ago
    He's using the supposedly humorous "say the opposite to what you mean" method of blogging. He should just have dropped that right off the bat: My edit: "My experiences with Adwords shows people don't click an advert unless it's relevant to their search. For example, people searching for '747 seating plan' don't click ads for 'wedding seating plans'. People are not surfing the web, rather they are reading. Clicking an irrelevant ad is rare [...] thus I have '747' set up as a negative keyword." Where it says "clicking an irrelevant ad is rare" I'd probably say "following an irrelevant ad leads to virtually zero conversion rate". But I tried not to change the meaning with my edit. FTFY: how did I do? Edit: re-reading the original I can see now that he may not have been continuing his negative voice. He may have posted this para in the positive. It does work either way. So, is he saying people click irrelevant ads, or is he saying they don't?
    - hermitcrab 17y ago

bemmu 17y ago

Isn't it worth bidding up to 99,999...% of your profit, if it really already accounts for all costs?

dagw 17y ago
Well no. First of all conversion rates are random and average conversion rates are just averages. You want to give yourself some headroom for volatility and the fact that you simply miscalculated your conversion rate.
URSpider94 17y ago
No, and here's why. The goal of selling your software is to make profit, so that's what you maximize. Let's look at some examples for comparison. Alice and Bob are both selling software. Their per-copy expenses are $1. Alice advertises on AdWords for $.10 per click, and has a 10% conversion rate. So, her cost per sale is $2 ($1 cost + $1 AdWords). She sells each copy for $3, making $1 profit. She sells 100 copies per month, making $100. Bob advertises on AdWords for $.199 per click, and has the same 10% conversion rate. His cost per sale is $2.99 ($1 cost + $1.99 AdWords). He sells his software for $3 per copy, making $0.01 profit. Homework questions: how many copies per month does Bob have to sell to make more profit than Alice? Is it likely that an increase in AdWords bid from $.10 to $.19 will drive that kind of difference in click-throughs?
- joelhaus 17y ago
  The goal is to reach your optimal profit point; where an increase in expenditures would result in a decrease of overall profits. For adsense, this requires careful/constant measurement/iteration. More here: http://en.wikipedia.org/wiki/Profit_maximization#Marginal_cost-marginal_revenue_method http://en.wikipedia.org/wiki/Profit_maximization#Marginal_co... Good article for the adsense illiterate though.
- bemmu 17y ago
  I think we had a different interpretation of the situation, but let me know if I got something horribly wrong below, because I'd love to know before going out and doing the mistake in the real world. Note I said _bidding_ 99.999% of profit. If Alice makes $1 profit when she bids $.10, then even if she bids $1.10 she would still get all those $.10 clicks and make her $100 profit, but additionally would get some other profitable clicks as well. Does this make sense, or am I misunderstanding something?

jasonlbaptiste 17y ago

someone needs to build stuff that helps developers make money with their apps. we all cant be 37 signals or salesforce, nor want to be, but we all certainly want to sell our software.

callmeed 17y ago

Good stuff as I'm actually about to start some new AdWords campaigns. The 1-day consulting looks interesting too. Anyone use an AdWords consultant (or offer such a service) with good results?

aarongough 17y ago
The company I work for does Adwords setup/optimization. I'm not too involved with that side of things, but I know that previous clients have experienced as much as a 250% increase in their business volume after starting adwords campaigns with us (relative to their pre-online-advertising sales) If you're interested check out http://waldendesign.com/ http://waldendesign.com/

fnid2 17y ago

I'll start using Google adwords when they let me pay only for clicks that result in a conversion. They have the technology, put it to use. I'll come write it myself and then pay for the adwords, but I won't pay for adwords until they enable pay for performance for adwords.

hermitcrab 17y ago
They do (of sorts), see: http://successfulsoftware.net/2009/07/07/a-test-of-cost-per-action-cpa-vs-cost-per-click-cpc-in-google-adwords/ http://successfulsoftware.net/2009/07/07/a-test-of-cost-per-...
netcan 17y ago
They actually did start to role out this kind of thing. At first it was invite only, then available in certain circumstances (place, budget, etc.). I don't think it was very successful. They pulled some of the campaign types associated with these things. It was a sort of automated system for specifying what you would like to pay per conversion and Google guaranteeing that you won't be charged any more for it.. I thin Given your conversion rate performance, it could give you some ppc bid for the system to work with. Then it could "optimise" your system to get you as many conversions as possible at the price you specified. I think the problem was that they had to offer it to customers who were fairly sophisticated already. In the back-end it was really just converting it all back to pay per click anyway (I think). These advertisers were in control of their costs per conversion anyway. All the system really did was (potentially) save them time. But, you lose some flexibility which I think made it not worth much. I found that it performed less well then I could do myself. Now they offer automated bid management, which really does something fairly similar, it automates your campaign for conversions. What they cannot do under their system is offer you X conversions @ Y cost.
Poiesis 17y ago
You might find this writeup interesting, then: http://www.kalzumeus.com/2007/11/10/conversion-optimizer-adwords-done-right/ http://www.kalzumeus.com/2007/11/10/conversion-optimizer-adw... (I really need to stop reading so much and start producing...)

mikeyur 17y ago

6. Advertise on the content network (unless doing some branding w/ display ads) 6a. Advertise on content network w/o selecting specific domain names in your niche