How to use Split Run Testing Tactics to Reduce your Google Adwords Bill

By Scott Miller
Posted Sunday, September 19, 2004

Adwords is the name of Google’s pay-per-click advertising system. Adwords was designed by Google to provide highly relevant text ads alongside regular search results. This article is part of a series on improving Adwords ROI published by Vertster.com It discusses benefits of maintaining a high clickthrough rate, and provides instructions for systematically improving your clickthrough rates.

A Review: How Adwords Works

Advertisements shown on Google and the Adwords network are simple text blurbs, not unlike classified ads shown in newspapers. These text ads are referred to as Adwords Creatives. At only two lines of text, creativity may seem pretty limited, although you would be amazed at what can be done with words! The great thing about Google’s system is that you can create an unlimited number of text creatives, grouped together in an "Ad Group."

Adwords places advertisements by keyword targeting. The advertiser provides a list of keywords for the "Ad Group." This list determines which search queries will result in ads being shown. When a web surfer conducts a search for one of these words on Google, Ask Jeeves, America Online, or one of Google’s other partner sites, one of the advertiser’s corresponding advertisements is displayed.

If you have four different creatives in your ad group, they will rotate evenly. As times passes, Google keeps and compiles statistics on the performance of each creative. The primary statistic is the "click- through rate," which is a ratio of how many people have seen the ad (impressions) to how many people have clicked on it.

There are two main reasons for increasing your CTR:

1. Maximize your Exposure

If you are an aggressive advertiser and are maximizing the exposure you get on the Google network, increasing your clickthrough rate is the only thing you can do that will increase the traffic delivered to your site.

2. Save Money

The Adwords system is designed to reward highly relevant advertisers, and punish those that are less relevant. Relevance is determined by how many people click each ad. The higher the CTR, the more relevant the advertisement must be.

Because Google only makes money when web surfers click on ads, a highly relevant ad is clearly more profitable. Advertiser’s with high click through rates are rewarded, and given higher positions on the result page. A high CTR should be a top goal for advertisers who wish to save money- they will end up spending far less to maintain top positions and maximize their exposure in the process.

Testing multiple creatives and systematically eliminating the lower performing variations will allow you to fine tune and maximize your CTR.

The ability to run multiple creatives at the same time makes it easy to try different ideas and see which result in the highest CTR. Using this strategy, you should be able to substantially increase your clickthrough rate over time.

1. Start-Up

Set up a new ad group, and start out with three completely different creatives. Let your imagination run wild. This is the time for creativity and exploration. Try completely different customer appeals, different benefits, different headlines, etc.

You can use Vertster's free CTR Validity Checker (http://www.vertster.com/adwords-tool/) to determine whether or not they have run long enough. Attaining a level of statistical validity means that your creatives will continue to perform at a similar level in the future. Ultimately, one will emerge as the clear winner. If there is not a clear winner, let your group run for longer. Eventually, you should see a winner.

2. Improve the winner

Now you should delete all the creatives except the best performer. When you begin this step, you should only have one creative in this ad group.

Now create three different variations on the winner. Make small changes, things like word choice, abbreviations, etc. Also, create a fourth creative that is still different from the rest.

3. Watch for the Winner

Run these new variations until there is a clear best performer. Again, use the free CTR Validity tool. The 3 variations will likely be pretty close, but maybe not! Sometimes a small change can have a big impact. Check what your fourth ad did. Better? If it did better, go back to step two, and use this creative. Worse? Move on to step four.

4. Continual Testing

Congratulations! You have a control! The control is the element of a test that you have done in the past, and that you know works. Take your top performing variation from step three and create three ads, that are all the same. Now create a new fourth ad which is different. It could be a small amount different, or a completely new direction.

This one is your test. Your proven control should display approximately 75% of the time, and your test 25%. In three weeks, review your results, making sure to use the CTR validity tool. If the control still shows the best CTR, change your test ad. If your test is better, go back to step 2, using your test.

Conclusion

Using this technique, you should be able to significantly improve your Google Adwords results. At the very least, it will bring some method to your Adwords creative writing. Improving your clickthrough rate should be your number one priority, as it will result in lowered costs and improved positioning- bringing you more leads! Good luck!

Note: At time of publishing, Google released a new tool called "Campaign Optimizer." This purportatedly "favors" better performing Adwords creatives. However, our initial testing indicates it may be flawed- giving preferential exposure to ads long before statistical significance has been reached. This feature of Adwords is optional, although you do have to "opt out."

About the Author
Mr. Miller is the founder of Vertster, a powerful split testing and conversion measurement tool for web marketing communications. Learn more powerful strategies by visiting (http://www.vertster.com). Scott can be reached at 801-363-6200 or scott@vertster.com.