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Model of the Effectiveness of Google Adwords Advertising Activities

Conference Paper · September 2018

DOI: 10.1109/STC-CSIT.2018.8526633

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 98
Model of the effectiveness of Google Adwords
advertising activities
Grzegorz Szymanski
Lodz University of Technology
Faculty of Management and Production Engineering
Lodz, Poland
grzegorz.szymanski@p.lodz.pl
Abstract— Nowadays, some of the most popular forms of e-
marketing are activities in search engines. Pay Per Click is a type
of advertisement in the form of a banner or a link with the
description, recommendation or opinion of the client – displayed
in search engines. The main advantages are the payment model
based only on effects – clicks in advertisement. The aim of this
publication is an attempt to design an model for AdWords
advertising campaign. In order to achieve this goal, an analysis of
selected campaigns was carried out. Taking into account all
elements affecting the effectiveness of the AdWords campaign,
particular stages of design should include such determinants as:
selection of keywords, design of add descriptions with extensions,
implementation of excluded keywords, determination of a
schedule and geolocation, optimization and design of websites and
continuous optimization of campaign parameters. Proposed model
of AdWords campaign depends on two groups of factors. The first
one is strictly connected with the campaign’s parameters, while the
second one is related to the features of the promoted product and
the company itself.
Keywords—AdWords, PPC campaign, Pay per Click
I. INTRODUCTION
Nowadays, some of the most popular forms of e-marketing
are activities in SEM search engines (Search Engine Marketing).
The growing popularity of search engine advertisement is
caused by its high efficiency. Both website positioning and
sponsored links, displayed next to organic SERP results (Search
Engine Results Page) are one of the least invasive creatives of
online advertising. The share of SEM in online advertising
expenses over recent years has been steadily increasing. SEM
activities are based on the existing websites that currently
perform an advertising and information function about the
company. Thanks to its help, you can present the offer, price and
contact details. A website, next to the social medial profile, is
the basic tool for promoting the company on the Internet.
Websites are designed not only for the company, but also they
can be dedicated to a certain product, brand, event or even
individual employees. The aim of this publication is an attempt
to design an model for AdWords advertising campaign. In order
to achieve this goal, an analysis of selected campaigns was
carried out. Moreover, the most important factors influencing
the effectiveness of advertising activities in the area of
sponsored links were identified.
CSIT 2018, 11-14 September, 2018, Lviv, Ukraine
Piotr Lipinski
Lodz University of Technology
Faculty of Technical Physics, Information Technology and
Applied Mathematics
Lodz, Poland
piotr.lipinski@p.lodz.pl
II. PAY PER CLICK
Marketing activities in search engines (SEM) are most often
defined as a marketing process using SEO techniques (Search
Engine Optimization) and PPC advertisement (Pay Per Click) to
increase the popularity of the website [1]. Search engine
optimization is enabling a website to appear in top result lists
(especially first 10) of a search engine for some certain
keywords. There are many different factors that enable a website
to move up top results [2]. On the other hand, PPC can be
defined as a paid Internet form of advertising, settled after
clicking on the creative. PPC in search engines is called as paid
search and it constitutes one of many PPC models [3, p. 10–11].
This advertisement is also known as PPC Marketing, Pay Per
Click Advertising, Pay Per Click Search Engine Marketing, PPC
ads, cost per click advertising, as well as (more broadly) as
sponsored search. The most current definition of PPC indicates
that it is a small, usually text-based, advertising form (located in
search engines) that depends on keywords. Furthermore, it is
payable only for the user’s click. Taking into account the
popularity of search engines, business managers usually decide
on Google. Additionally, many other search engines introduce
functions and mechanisms inspired by Google, so SEM
optimization activities (presented as a leader of search engines)
are often effective in other solutions. Chinese people, as one of
the few nations, more often use their own Baidu search engine
(about 81% of users), while Russians use Yandex (47%). PPC
activities in the Google search engine function under the name
AdWords and their popularity is definitely higher than other
known forms of e-marketing in Europe (Table 1).
TABLE I. POPULARITY OF SEARCHING FOR DIFFERENT
ADVERTISING FORMS IN SELECTED COUNTRIES
Country
Searched form of
Russia Ukraine USA Poland China
advertisement
AdWords 21 26 24 33 99
E-mail 1 0 50 2 1
Social marketing 1 0 9 1 0
Product Placement 0 1 1 0 0
a.
The table presents the popularity of searches for particular forms of Internet advertisement in selected
countries on a scale 0-100, where 100 means the largest frequency of searches in a given country
In 2000, Google introduced an innovative advertising
program called AdWords. The main algorithm of this program
was dependent on keywords. A keyword in the SEM area means
the entire phrase that the user types in the Internet search engine
to find the information that interests him. A keyword is very
 99
rarely a single word – usually such a keyword consists of two,
three or four words. The basic essence of AdWords was to
support marketing activities through Google search engine.
AdWords presents an advertisement containing a link to
websites tailored to keywords [4]. Expenditure on advertisement
in search engines (Paid Search) constitutes the largest share of
online platforms and they maintain the annual growth in the
level of approx. 10%.
Pay Per Click is a type of advertisement in the form of a
banner or a link with the description, recommendation or
opinion of the client – displayed in search engines. The main
advantages are the payment model based only on effects, which
in the case of PPC are connected with clicks in the advertising
creative. The AdWords mechanism has a system of protections
against unethical competition activities, so-called “invalid
clicks”. In order to verify each click, the system identifies the
user’s IP, cookies and the frequency of clicks. The display of the
advertisement itself (regardless of its popularity and exposure
time, as well as the number of views) does not charge the
advertiser’s account.
The second important advantage is the ability to quick
launch of an advertising campaign. For experienced users, the
building of a simple advertising model takes less than an hour.
In the case of positioning the website, the effects are not so fast.
They are visible even after a few weeks. However, the launch
of the AdWords campaign depends only on the funds on the
account and the preparation of the basic elements of the
creative. An important advantage is also the possibility of
permanent optimization of the campaign. Constant monitoring
of current results allows for a quick optimization response that
increases the click-through rates and conversion rate. On the
other hand, it should be noted that an incorrect optimization of
the ad, relying on obtaining a low click-through rate (CTR),
automatically increases the fee per click.
The efficiency of advertising activities in search engines is
reliably characterized by the conversion rate (CR), which
presents the quotient of clicks in advertisement to the number of
persons, who have completed a specific task, e.g. the purchase
of a product. In turn, the Click Through Rate determines the
frequency of clicking on the advertisement by Internet users,
who have seen it. In the form of PPC advertising, CTR is used
to determine the effectiveness of keywords and the entire
campaigns. CTR is a number of ad clicks in relation to the
number of views. A high CTR indicates that users think that
given advertisements are accurate in terms of their searches.
CTR plays an important role in the Adwords advertising
ecosystem. Simultaneously, it is one of the important factors
affecting the results of quality for keywords and the entire
campaign.
Among the activities that increase the effectiveness of
advertisements in the AdWords system, it is possible to
personalize messages, both in terms of demographic data of
recipients and in the design of the advertising creative.
Identification of the Internet users’ behaviors and their
geolocation significantly increases the conversion rate,
especially for companies operating in the local area. The results
of tests point to the existence of noticeable differences between
the acceptance of personalized and general contextual
CSIT 2018, 11-14 September, 2018, Lviv, Ukraine
advertising. Personalized advertisements on Facebook are
observed more often by women than men. On the other hand,
men provide a higher ratio and conversion rate for Google
AdWords [5].
Another method for the increase of advertising quality is the
use of a more efficient project. The ad presentation algorithm is
permanently changed. Initially, AdWords was only an
extension of the Premium Sponsorship program. In 2003,
Google introduced the ability to display ads on external
websites thanks to the new AdSense program. In 2007, a
conversion optimizer has been launched. It defines important
CPC (Cost Per Click) rates to this day. A year later, the Planer
tool has been provided. It helped to search related keywords.
Moreover, the Adwords advertisements for mobile devices
were introduced. The latest and the biggest changes are
connected with a new interface, which was implemented in
2017. Furthermore, the change of place for the presentation and
the appearance of ads in Google were changed in 2017. A new
shopping tab has also been added. It operates more effectively
in the case of sales campaign. Moreover, the opportunity to
present opinions and recommendations of clients was made
available as an additional automatic extension displayed in
AdWords ads in the search engine.
The key shortcomings of PPC are short-term activities and
the need to optimize campaign’s parameters in order to maintain
high efficiency. The visibility of advertisements in the search
engine is closely dependent on the positive balance of the
advertising account and the adopted CPC rate. The use of a less
popular but more effective word brings benefits in the form of
less competition. This method is commonly known as “long
Tail”. Long Tail is a specific PPC model based on the
simultaneous promotion of many, longer and multi-word
keywords, which (in total) generates greater movement than
short, popular and commonly used keywords. In addition, the
selection of a long keyword enables to significantly reduce the
competitiveness (lower CPC), while simultaneous increase in
conversion rate (CR) and PPC campaign quality.
The existing studies indicate that SEO activities determine a
significantly lower CPA (Cost Per Action) than PPC. This
means more effective marketing strategies [6]. Although
effectiveness is one of the most important indicators for
evaluating PPC's activities, very often companies use SEM
activities to support their image or information campaigns.
III. PROJECT OF THE EFFECTIVE PPC CAMPAIGN
MODEL
Taking into account all elements affecting the effectiveness
of the PPC campaign, particular stages of design should include
such determinants as (Fig. 1):
x Selection of keywords.
x Design of add descriptions with extensions.
x Implementation of excluded keywords.
x Determination of a schedule and geolocation.
x Optimization and design of websites.
x Continuous optimization of campaign parameters
 100
Fig. 1. Model of the effectiveness of Google Adwords advertising activities
The selection of keywords depends on the adopted campaign
goal. Among popular goals, we distinguish campaigns
strengthening the brand, increasing reach or sales and enabling
the acquisition of the so-called Leads. Lead is a unit
(organization, enterprise or private person) that is interested in
the offer. During the selection of the right keywords (besides the
experience and knowledge of the company’s employees),
support tools like Google Planer or Ubersuggest are often used.
Keyword selection should be carried out carefully, because it is
the basis for the effectiveness of the action – especially in the
context of the conversion date and the campaign’s quality.
Sometimes, the addition of custom keywords can significantly
increase the number of potential clients, e.g. the addition of
words with spelling or typographical errors.
The second area of the proposed PPC model is the project of
description and extension of advertisement. Nowadays, the
description consists of the headline (30 characters) and the ad
text (80 characters). Both parts should encourage interaction and
at the same time they ought to meet the recipient’s expectations.
One of the key factors for the increase of efficiency is the use of
a keyword – both in the headline and in the description. This
action shows the recipient that this particular offer is an answer
to his question. It is worth to add in the description “Call to
Action”, i.e. an encouraging expression e.g. “Call”, “Click”.
Recipients usually tend to respond to clear instructions and hints.
The effectiveness of this activity is confirmed by the results
(Table II). They illustrate the real AdWords campaigns for a
company, which sells hearing aids. Furthermore, the headline
and the description should not contain language errors and they
should take into account the principles and rules of netiquette. It
is also valuable to use extensions that can have a very beneficial
effect – not only on the visibility of the advertising itself (its
volume is increased and the ad is visually distinguishes among
competitors), but also CPC rates and the conversion rate (CR).
There are extensions of sub-links, explanations and information
about the website. Moreover, there is a possibility to use
extensions of telephone and localization connections, which are
naturally mixed with the offer in the era of mobile devices. Other
interesting examples are price extensions. The display of a
specific product price enables to increase the client’s interest to
make a purchase decision. A new feature is the extension of the
opinion, which certainly stands out among search engine
CSIT 2018, 11-14 September, 2018, Lviv, Ukraine
advertisements and increases the credibility of the offer and the
enterprise through the authority of previous customers.
An important, but often underestimated determinant
affecting the effectiveness of PCC is an element of exclusion for
keywords. This solution enables to deactivate ads for keywords
that sound similar to the adopted keywords, but they point to
completely different products. Moreover, it is worth to limit the
advertisement in the case of the promotion of services, e.g.
through the removal of all street names in the city, expect for the
actual location of the enterprise. This helps to avoid unwanted
clicks of people, who are looking for a particular service, but on
a specific street. Almost every industry has a universal list of
words that should be excluded. Thanks to the possibility of
permanent observation of PPC campaign, lots of exclusions are
added on the basis of the analysis of the obtained results. It is
worth mentioning that in the area of keyword exclusion, you
cannot limit the parameters too restrictively, because it may turn
out that the company will lose potential clients.
Geolocation allows the display of advertisements only for
users located in the selected geographical locations. This feature
is very useful for companies operating on local markets that can
present the offer. Advertisements can be displayed, both on the
basis of the user’s location and location of interest, i.e. keywords
that indicate specific places, e.g. city names, streets, etc. On the
other hand, the AdWords schedule enables to activate ads at
certain hours or days of the week. Most often, campaign settings
force the display of advertising 7 days a week for 24 hours per
day. However, this is not always an optimal solution – for
example, if the company provides meal delivery services,
perhaps only advertising during the night hours will be an
effective action. Similarly, if a company has a poor quality
website and is more concerned about phone communication
during business hours, the PCC campaign should be use in
accordance with the schedule.
TABLE II. EXAMPLE OF THE “CALL TO ACTION” EFFECTIVENESS
Campaign Parameters
Text of advertising PPC Conversion
Average CPC
Cost
Lowest price guarantee, qualified
employees, free examinations, See!
0,74 7,36
Lowest price guarantee, qualified
1,17 10,26
employees, free examinations.
Different classes of hearing aids,
qualified employees, free 0,71 8,20
examinations, See!
Different classes of hearing aids,
qualified employees, free 1,04 10,67
examinations.
Hearing aids, the best prices! Free
1,71 13,09
hearing test.
Links from advertisements should be mandatory directed to
specific subpages or domains, so-called landing pages. Landing
page is a website, to which the recipient is directed in order to
initiate communication and conclude a transaction. The
recipient of the message, who decides to click, should be
redirected to a website with information closely related to the
keyword or description of the ad. For example, for the word”
babysitter”, a link should lead to the website with an offer of
childcare, not to the company’s homepage. In practice, effective
 101
landing pages are single pages that are focused on the
presentation of the offer in the form of Call To Action. These
websites are also used to obtain e-mail addresses, information
about the sales of products, as well as records connected with
trainings and events. Landing pages should be simple and
transparent in order to ensure that the user find information as
soon as possible. Professional AdWords campaigns very often
require the design of a set of websites for this one action. The
use of landing pages increases the conversion rate [7]. On the
other hand, the design of sets for different keywords enables a
more accurate CTR estimation [8].
The last important element of an effective PPC campaign
model is continuous monitoring and analysis of results. The
continuous monitoring is more important for more extensive
campaigns. Regular identification of all changes regarding the
effectiveness or changing trends enables to react in advance and
increase the competitive advantage. Monitoring and analysis of
results are also a change to detect unexpected errors, which can
often reduce the conversion or increase the cost of the entire
advertising campaign. During the tracking changes and finding
errors, the alert function from Google Analytics is useful. A
weekly change of conversion for individual advertising
creatives, dynamic CPC change at the level of a specific
campaign or advertising group and change of critical errors that
disable ads, should be included in the control of parameters.
Taking into account all of the described determinants, it is
possible to propose an AdWords advertising campaign model
that uses PPC. Six characterized factors are input data:
keywords, description, exclusion, geolocation, webpage and
optimization. Each of them is subject to detailed rules that have
a direct impact on the effectiveness and conversion of PPC.
These factors have different values – depending on campaign
parameters, such as: purpose, features of the advertised product,
coverage and specification of a group of recipients. All elements
are monitored and analyzed through the use of Google tools:
Planer, Google Analytics and AdWords. However, in order to
consider the proposed model as complete, it would be necessary
to add two additional input variables that significantly affect the
effectiveness of the campaign. The first factor is the quality of
customer service on the side of the advertised enterprise. Even
the most optimized advertising campaign will not be effective if
the company does not apply appropriate communication with the
client. The last factor is the optimal price of the promoted
product. Although the effectiveness of PCC advertisements is
relatively high, it is directly dependent on the price incurred by
the client. Determination of prices for products is one of the most
complicated elements of running a business. In order to choose
the right pricing strategy, it is necessary to test various solutions
and observe customers’ behaviors. In some industries, a strategy
of too high price can discourage a potential customer. However,
a low price can mean low quality of the product.
The presented rules are the basic conditions for the
optimization of the AdWords advertising model. Optimacy was
considered in terms of the effectiveness of advertising
campaigns, but has not been verified. The proposed model is
coherent and possible to implement in any company
implementing comprehensive AdWords campaigns. The
implementation of the proposed solutions and tools will allow
for a significant increase in the effectiveness of search engine
CSIT 2018, 11-14 September, 2018, Lviv, Ukraine
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marketing, especially in the SME sector, where the availability
of such models is currently relatively low. This should also
increase the number of potential customers and the profits of
companies.
IV. CONCLUSION
The conditions of the optimality theory for the Google PPC
model are quite strong and will often not apply. It was presented
that the proposed model enables to model any AdWords
campaign in the area of effectiveness, analyzed on the basis of a
set of indicators. The most important parameters, which
determine the effectiveness of PPC, are conversion rate (CR),
click-through rates (CTR), Cost Per Click (CPC) and the
Summarizing the above considerations and the results of
researches, it can be concluded that the proposed model of
AdWords campaign depends on two groups of factors. The first
one is strictly connected with the campaign’s parameters, while
the second one is related to the features of the promoted product
and the company itself. campaign’s general quality. The
characteristics of the impact of individual determinants refer to
the experience and analysis of the results of the actual AdWords
campaigns. The proposed model is the realization of the existing
regulations concerning the evaluation of the PPC system’s
effectiveness with the use of standardized criteria for their
assessment. Moreover, it should be emphasized that the
proposed model (due to its simplified form) reflects only the
basic features of a given solution and it may be a tool to improve
the design of effective AdWords campaigns. The next stage of
the model development will be the verification of individual
elements influencing the effectiveness of PPC campaigns. We
are aware of the fact that the most important feature is to match
the model to the purpose of conducted campaigns (not
necessarily effectiveness). Therefore, our future work will focus
on improving and adapting the individual elements of the model
to the comprehensive strategies of the enterprises. We also have
plans to develop detailed models describing each of the analyzed
areas of the proposed solution. The next area of the study may
be the verification of the optimality of the proposed model.
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