WordStream: SMBs Need to Act to Level the Playing Field

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WordStream.com – a popular digital marketing site — has published results from a large-scale study on SMB (Small to Medium-Sized Business) paid search and its results are instructive for small businesses thinking of buying clicks from Google and the other engines. Here are some highlights:

  1. SMBs do not consistently enable Conversion Tracking on their sites. Conversion tracking closes the marketing loop by directly tying ad spend to conversions, thus providing a way to determine actual campaign ROI. According to WordStream, only 46 percent of SMB marketers had enabled this tracking. Unfortunately, unless one understands what happens after a prospect clicks on a paid listing, it’s very difficult to compute what that click was worth. Fortunately, installing Conversion Tracking tags is something that SMBs (or their agencies) can get accomplished with minimal time and expense.
  2. SMBs are under-utilizing negative keywords. Negative keywords are powerful filters that limit the odds that your ad will be shown for an irrelevant query. While compiling negative keyword lists is a labor-intensive activity, deploying them results in markedly improved campaign performance. Unfortunately, WordStream found that few negative keywords are being added to the SMB accounts it monitors. As WordStream’s Larry Kim observes, “even if they don’t impact Quality Score, negative keywords are critical for high ROI because you’re eliminating wasteful spend (clicks from people who aren’t going to buy anything) and re-routing that money to more useful campaigns.”
  3. Quality Score and CTR metrics are rising. Google’s elimination of right-rail ad positions in February of 2016appears to have eliminated many low-quality paid listings that were formerly displayed in this area. One consequence of this change appears to be an improvement in average Quality Score. For SMBs, WordStream estimates the average SMB QS at 6.5, an improvement of 2.7 percent over 2015. Even a marginal improvement in CTR can provide major benefits, most importantly in terms of getting marketers a better Quality Score, which lowers effective ad costs in Google’s auctions.
  4. SMB CTR Gets a Boost From Expanded Text Ads. Google added Expanded Text Ads (ETAs) earlier in 2016. They provide marketers more room to “sell and tell” within Google’s traditional text ad format. Instead of a single headline field with a 25 character limit, two fields are available that can accommodate up to 30 characters. Description fields also expand from two lines – each offering 35 characters — to a single field accommodating up to 80. According to WordStream, ETAs are capable of improving CTR by up to 400 percent.

The Takeaway for SMBs

WordStream’s data validates the intuitive proposition that SMBs as a group find themselves at a structural disadvantage when facing competitors whose budgets are less constrained, hence more able to avail themselves of agency services, fee-based 3rd party bid management tools, and/or adequately trained internal resources. The good news is that WordStream’s data suggests that SMBs able to do just a bit of heavy lifting can put themselves in a much better position by leveraging ETAs, negative keywords, and making full use of conversion tracking. Doing so will reduce the “large marketer advantage” traditionally enjoyed by deep-pocketed competitors, thus leveling the playing field.

You can survey the complete WordStream.com SMB data study here:
http://www.wordstream.com/blog/ws/2016/09/20/adwords-ad-data