If you’re starting with Adwords, it won’t be long before you wonder how the nuts and bolts of the pay per click (PPC) pricing mechanism fit together. What this video lacks in pizzaz, it makes up for in content. It’s 9 minutes of your life but if you’re a client using PPC advertising (or need to explain the Adwords fundamentals to a client) it’s a must watch.
The only small comment I would make is that I believe the price paid is actually 1p (or $0.01 in the US) higher than the bid that’s been beaten rather than exactly the beaten bid price as Hal says. See more detailed info on the Google Help page about what you pay on Adwords.
Adwords impression share is very useful for demonstrating how much of your target audience you’re covering. As a rule of thumb, impression share (IS) above 80% is usually regarded as good.
Take the following figures from a real Adwords account:
Impression Share: 93%
Lost IS (Rank): 7%
Lost IS (Budget): 0%
Exact Match IS: 100%
There can be a couple of reasons for the Lost IS due to rank; one of which is that the ads are being displayed on a partner site that doesn’t display as many ads as Google’s homepage so effectively the ad drops off the bottom. This is logical.
However, in the above example the advertiser is only distributing their ads on the Google search results page, so it will never be displayed anywhere other than on the Google.com/.fr/co.uk/com.au etc.
A second (and more relevant) reason for the Lost IS (Rank) is that the advertiser is missing opportunities to display ads against long tail terms. Let’s assume that the advertiser above is targeting the term “curly wigs” (phrase match type). They’ve set their CPC bid and daily budget high enough to display an ad to 100% of the people searching for “curly wigs”. But only 93% of the people searching for “curly wigs” plus a modifier e.g. “brown curly wigs” see an ad. This probably means that their website isn’t optimised for all the possible long tail terms (“curly wigs that make me look like Michael Knight just when he gets out of Kitt” anyone?).
The more content they add to their site, the more keywords they target and the more they bid the lower their Lost IS (Rank) will be. But at over 90% I reckon they’ve got the curly wig market pretty well covered!
