Many Myths about adwords surround advertisers. But, they are not limited to innocent advertisers who have little knowledge about adwords, what it can achieve and what it is not, they are equally prevalent among Qualified Professionals. I would rather focus on myths held by professionals, which they hold during the learning phase.
1) Content Network is Garbage:
A lot of bashing has taken place about content network, mostly by people who never had time to experiment with them with full dedication. If you are victim of this myth, start creating a content campaign separate from search, keeping in mind the content traffic. Result will automatically incline your thought and resources towards this realm. It has evolved so much now, that search traffic and returns would seem tiny & far less responsive to your efforts.
2) Exact & Phrase Keyword Matches are the best.
Too many of the Adwords Gurus have preached against Broad Matches. Again experiment all of them. Broad Matches do deliver good results and you must expand the reach of your keywords to the full extent, don't limit them up to the phrase if they have the potential to go beyond that.
3) Placement Targeting is the substitute for content targeting
Placement targeting should not be used as a substitute for content targeting. In fact, General Content Targeting(Keyword Triggered) when suitably fine tuned can find good context from entire network, rather than one which is restricted within a closed domain.
4) SEOs can genearate free traffic, so Pay per click method is useless for w/s having good SEO
SERPs of Google are not Ads and Ads have their own power. When suitably written they can attract more qualified traffic and hence lead/conversions than SERPs which only displays robotic indexed pages. Also, SEO work can't go beyond Search which now is a tiny fraction of internet traffic.
5) CPM based advertising is costly and a useless feature in Adwords.
Cost per Impression basis of advertising can beat returns from cpc based ones in some circumstances. When you find highly relevant traffic directed to a page, either because of event or context, it makes sense to place your ad on CPM basis. It only improves Conversion rate. Give it a try, you will soon lose this myth.
6) DKI are the best/worst Adtext Solution.
DKI may give you great result, but only when you put it along with static adtexts. Experiment them well along with some static adtexts before concluding or generalising about it.
7) High CTR is the main objective of the campaign and a good measure of its performance and relevance.
In fact they are useless, and expensive if not matched by proportionate increase in conversions.
8) Higher Conversion means higher ROI.
Conversions are not always good leads. You should track the loopholes and close all the holes from where junk leads/ conversions flood in watering your ROI.
9) Parked Domains are useless and should be blocked as soon as possible.
You should never block parked domains, for they are the cheapest contributors to conversions. Track them well and try to buy some of them they may revolutionise your entire business.
10) Adwords Optimization is limited to Adwords Account and can't go beyond that.
Adwords optimization should go up to landing page at least. You can stretch it even beyond that, because with more features and expanding reach of Adwords it is soon likely to become Business Control Dashboard, so always try to look beyond the accounts only.
Check how many of them you are holding, if you could free yourself even from some of them, they will simply add to your client and your ROI.
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