Because top positions typically receive better click through rates than lower, many people use average position as a KPI (key performance indicator) to measure campaign health, and seek to optimize it — either by trying to improve Quality Score* or raising the maximum CPC (cost per click) for the keyword. For some, raising the bid is easier than trying to figure out how to appease the Google Quality Score god.

*Quality Score is Google’s way of scoring the quality (clever name, hey?) of your ad and landing page relevance and attractiveness to searchers. If you’re interested in learning more about Quality Score, Craig Danuloff of Click Equations is writing a book about it and is dripping out chapters on his blog.

Click through rate (CTR%) is the most important part of Quality Score, according to Google’s own explanation of how it ranks ads (Youtube video). CTR% is followed by ad/landing page relevance and landing page quality. The video goes into detail on how ads with high Quality Scores are rewarded by higher positions and lower average CPCs.

It used to be common practice to crank up your bids when you first launched keywords so they would rank higher and get better click through, and turn them down once you established a good click through history. Today, Google calculates your click through rate at each position it tests your ad in, comparing it against other data it has for advertisers in those positions rather than an average across every position. So there’s no need to bid high – your focus should be improving that click through rate!

Tips for Improving PPC Click Through Rates

1. Find negative keywords. Add as many negative keywords as possible to reduce impressions for irrelevant or near-relevant keyword searches. Some negative keywords will be applied at the Campaign level, others at the Ad Group level. You can also find negative keywords by adding a broad match exposure filter.

2. Group keywords more tightly. Studies have shown click through is highest when the ad headline includes the exact keyword the searcher typed in (limited to 35 characters) — especially for brand / color / model number searches. So rather than having one big Digital Camera Ad Group with all your brands and models, you would have a Digital Camera group with only unbranded keywords, and Ad Groups for each brand, and model-specific Ad Groups for each brand.

Some keywords might be so popular / high converting they may justify their own Ad Group so you can write an even more specific ad, like “Ashton Kutcher Coolpix.”

3. Write better ad copy. Some tips include:

• Use keywords in your ad’s headline that match your keyword list (you might use Dynamic Keyword Insertion to accomplish this
• Write persuasive ad text including value propositions about your business or enticing calls to action
• Use numbers like prices and percentages
• Capitalize The First Letter Of Each Word. Don’t Laugh, It’s Proven.
• A/B test your ads

In this economy, you can’t afford sloppy PPC campaign management. Make sure you do everything you can to improve Quality Score before you ramp up bids on keywords. After optimizing for CTR%, look at improving landing page relevance, not just to please Google, but to convert more clicks to sales.

If you use the broad match type in PPC advertising, negative matched keywords are essential to keeping your campaigns under control. But are you using negative matches to their full potential?

If you’re new to PPC, the broad match type refers to bidding on a keyword like new york pet store and allowing the PPC system (like Google Adwords, Yahoo Search Marketing or MSN AdCenter) to match your ads to search queries that include this keyword, regardess of word order.

The way Google’s broad match type works can be broader-than-broad. It employs “Expanded Broad Match” which means your “new york pet store” ad could show for a search on “animal shelters in New York.” There is no opt out for Expanded Broad Match (not to be confused with the Automatic Match beta which is a little different) — it’s the default way Google does its broad match. The only way to prevent your ads for showing up for any search including animal shelters would be to add it as a negative keyword – either at the Campaign or Ad Group level.

For a pet store, especially an online pet store, adding animal shelter as a negative match should prevent animal shelters and shelter animal from appearing.

-animal shelter

But what about this situation: You sell books, music, DVDs, video games and software including Microsoft Office software. A hot seller is the Microsoft Office Home edition. You’re bidding on microsoft office home and checking your exact keyword referrals as per this hack, you found clicks for the following:

microsoft office home
home office
office space dvd
the office dvd
the office dvd UK
office software
ms office software
office home
home office
office home software

1. Office home and home office are completely different searches with different intents and landing page expectations. Broad match can trigger ads for any word order, and you can’t add -home office as a negative keyword and keep showing up for Office Home. Using -”home office” or -[home office] will help. Since you don’t sell home office furniture, it would make sense to apply the negative to the entire campaign.

2. You sell the movies “Office Space” and “The Office” series — UK and US editions. You don’t want to add “The Office” as a negative keyword at the Campaign level – it will prevent ads from appearing for relevant Ad Groups and keywords. Instead, you add…

-”the office”
-”office space”

…to your Microsoft Office Home Ad Group, and…

-”the office UK”
-”office space”

…to your The Office (US) group, and so on.

You may ask, if you’re bidding on Office Space and The Office DVD UK in other Ad Groups, why would you need to add negatives to other groups that don’t include those keywords? The answer is Quality Score.

Your Microsoft Office Home group may have a higher click through rate history, a higher bid or any other measure of relevance that makes up Google’s Quality Score (other PPC programs also use a Quality Score algorithm of their own). Or you may have reached your max budget in one Ad Group, so an ad from another appears.

I can’t stress enough how important it is to see the exact keywords that your broad match ads are triggering. If you’re not sure how, here’s a full tutorial to help you set up the right filters in Google Analytics. Even if you’re not using Google Analytics as your primary analytics tool, you should at least be using it for this. It’s the best keyword research tool to find the irrelevant “long tail” terms that are costing you money. I guarantee you’ll be shocked at some of the searches the Adwords system will match your keywords to.

You want to view the keywords by Ad Group. So when you’re in Google Analytics, follow this path:

Traffic Sources / Adwords / Adwords Campaigns / {select campaign} / {select Ad Group}

Unfortunately you can’t see all the keywords that trigger ad impressions, only the ones you pay for when the customers click. What’s more shocking than Adwords showing your ads for some keywords is that people actually click on them! I am amazed the Vancouver 2010 Olympic Store ads for 2010 Olympics gets clicked for searches like 2012 judo olympic tryouts!

In addition to constantly checking my Analytics reports, I also do proactive negative keyword research with the Google Keyword Research tool. Enter a keyword you broad match and let the keyword tool suggest synonyms. This will uncover some and not all of what Google considers semantically relevant – but the terms you’ll discover are likely the highest searched terms, so better to add negatives before your ad appears for them:

You really are never finished researching negative keywords.