Interview with Martin Röttgerding - Marketing Festival 2014
Kentico’s marketing team is gearing up for the 2014 Marketing Festival in Brno, Czech Republic being held on the 1st and 2nd of November. In preparation for this big event, I have prepared an interview for one of the conference’s most well-renowned experts – Martin Röttgerding.
Martin Röttgerding is a seasoned online marketing expert who has been with Bloofusion
Germany GmbH for nine years now. Recently voted as one of the Top 25 Most Influential PPC Experts by PPC Hero, his primary focus is on Quality Score and Product Listing Ads.
We are really looking forward to hearing him speak at Marketing Festival 2014! We hope you will find Mr. Röttgerding’s answers to be as insightful as we did.
1. How did you get into PPC and what do you like about it?
When I started out at my agency, Bloofusion, I did both SEO and PPC for clients. One day, we agreed that I was going to take over the PPC side entirely. Frankly, I found SEO much more interesting at that time, but I took the chance nonetheless.
It took me a while until I fully realized how PPC works and what quality score actually is good for. After that, there was no stopping me.
2. What would you recommend to people who are new to PPC?
Try to understand how things work, and why they work that way. Be aware that when it comes to the details, there’s a lot of misinformation out there. Always question assumptions and try things out for yourself.
3. In your opinion, what are the three most important metrics in PPC?
In general, it comes down to your goals. Ideally, there’s just one metric – profit – and that’s it. More often you have two metrics that determine how well you are doing: One metric you want to maximize and a constraint related to costs. Those can be revenue and ROI, conversions and CPA, clicks and CPC, or just one of those in combination with costs, if you’re on a budget.
For the account as a whole, two metrics are usually enough. Depending on the situation, other metrics can be interesting, but most of them are useless when looking at the big picture at the account level. Things like CTR or conversion rate, for example, can be helpful when looking at things in detail, but those are useless metrics for the account overall.
4. Is there anything a website can do to lower the price of clicks?
The website itself… yes, but very little. Most people will think about the landing page component of quality score, but I think there is very little you can do in this regard. We can argue whether the landing page can actually help with quality score or not, but this would be purely academic: either it doesn’t matter, or it makes one percent of QS. If you’re thinking about optimizing your landing pages, do it for your users, not for quality scores.
Quality score is about whether people will click on your ads, so the actual question would be: What can your website do to make people click on your ads more often? People will click on your ads more often if they recognize it and maybe have already heard good things about you. So the advice is the same that our SEO team would give: Become a brand.
5. Could you give us one of your top PPC tips?
Try out real-time bidding for your campaigns. Google’s Conversion Optimizer may not come across as impressive as other tools, but we’ve seen great results even for long-standing campaigns.
6. What PPC or other tools do you use?
I believe that the combination of the AdWords Editor and Excel is the most powerful one for PPC. Aside from that, most tools we use we’ve built ourselves.
There’s one really cool tool that I’d like to mention: the Usability Booster for AdWords. It makes some subtle changes to the AdWords interface and adds a few extra buttons when it comes to negative keywords. A current beta version also changes the color scheme to make statistics easier to read. The tool is being developed by a German colleague, Holger Schulz, and can be found on his agency’s website at http://www.internet-marketing-inside.de/AdWords/usability-booster.html
7. What are your favorite PPC topics and why?
Right now, Google Shopping is one of my top priorities. For many of our clients, this channel contributes a major share of revenue. We’ve developed a very advanced strategy that we constantly refine. That’s what I’ll talk about at Marketing Festival.
Then there’s automation. I often play with the AdWords API and sometimes AdWords Scripts to support daily tasks at the agency. I’m really looking forward to hearing Russel Savage speak about this.
And of course, there’s quality score. I haven’t published anything recently, but I follow everything written about the subject and it can be hard to shut me up about it.
8. You wrote in your blog, “Visible Quality Score is now nothing more than expected CTR + ad relevance + landing page experience. Don’t put too much faith into it”.
There are a lot of people who view Quality Score in a different way than you. Would you change anything about the conclusion you arrived to in 2013?
No, the conclusion still stands. Let me explain…
There’s a fundamental difference between visible Quality Score – the little number from 1 to 10 next to your keywords – and the number Google actually uses for the ad auction. To be clear: These 1-10 numbers are not what Google uses to determine ad positions and CPC’s. They aren’t even close to the actual thing. You have probably seen calculations where doubling visible Quality Score lead to a 50% CPC discount – many people believe that, but it’s nonsense. A ten is not twice as good as a five. It just doesn’t work that way.
The thing Google uses to determine ad positions and CPC’s is something else. Despite all the legends that have been built around Quality Score, Google is still a business and needs to make money. They make money whenever someone clicks on an ad, so they need to consider two factors: how much money they make per click AND how likely it is that such a click occurs. The first factor is simply the bid, the second one Google has chosen to call Quality Score.
Auction Quality Score is click-through probability, also known as expected CTR. Some people believe that auction Quality Score is something about 70% expected CTR plus ad relevance plus a little landing page quality. For the sake of this argument, both views are fine.
Let’s go back to visible Quality Score. If you look at the status bubble next to a keyword, you will find this number along with Google’s evaluation of its three components: expected CTR, ad relevance, and landing page experience. Those components come in three different forms: average, below average, and above average.
Since 2012, if all three of these components are average, the keyword’s Quality Score is six. One average, one above, and one below, that’s a six, too. Two average and one above, that’s a seven. In this, all components are equal, which contradicts the undisputed fact that CTR is of paramount importance for the ad auction. This alone is enough to prove that there’s a big difference between visible Quality Scores and the actually important auction Quality Scores. So don’t put too much faith into visible Quality Score.
9. In your opinion, how much have Ad Extensions (Sitelinks, Phone Number, Callouts, Reviews Location) impacted Quality Scores?
That’s a tricky question that should have been answered by a blog post I’ve been putting off. Let me try…
As I said, for Google it’s important to consider the probability of someone clicking an ad – a concept that Google has decided to call Quality Score for marketing reasons. The old model of the ad auction looked like this: Ad rank = bid x Quality Score. This was nothing else than bids and click-through probabilities multiplied to arrive at the expected revenue per impression. For example, if the bid is 1.00 and the probability of a click is 10%, then the expected revenue from showing the ad is 0.10. In this model, Google would just have to calculate expected revenue for every ad and then give the best spot to the ad that makes the most money.
Now, ad extensions certainly have a big impact on the likelihood of a click. Many of them improve click-through rates by more than 10%. However, the tricky thing is that many are only available on top positions. Using the simple model as described above leads to some problems.
Basically, you would need one ad auction for the top positions where all extensions are taken into account, and then another for the rest. Then one problem is that the click-through probability for the last ad with extensions would be much higher than the next one’s. This would mean low CPC’s for this advertiser since she only has to pay enough to meet the next advertiser’s ad rank – which is much lower. This would be nice for the advertiser, but not for Google.
I don’t know how exactly Google has solved this issue (yet). There’s no doubt that ad extensions play a big role in the ad auction, but the mechanism is not as simple as the old one where higher CTR meant lower CPC. Using ad extensions increases your CTR and your chances to get top positions for your ads, but you won’t be rewarded with the CPC discount you’d expect under the older model.
10. What are your plans for the next two years?
Two years – phew, I don’t know. By then I may be deep into the technical details of the next big thing again. Or I may have made the transition to the management side entirely. In any case, I’ve got a feeling that it won’t be boring.
11. Could you tell us a little bit about what you’ll be speaking on at Marketing Festival 2014?
I’ll be speaking about a new architecture for shopping campaigns that will give you a new layer of control. I don’t want to give it away just yet… just let me say that you haven’t heard or read about it before and if you’re using shopping campaigns then you’ll probably want to apply this right away.
12. How do you think product listing ads will develop in the future?
I think the format will continue to be very important for retailers in the foreseeable future, but it will get harder as more and more retailers compete for limited space.
So far, many advertisers have experienced Google Shopping as an easy to handle system. After all, it runs more or less by itself, offering little control to advertisers. For a long time, this was a comfortable situation. After all, everyone had to deal with the same limitations and not being able to control certain details also meant less work.
With more competition and higher CPC’s, advertisers will need to take better control over their shopping campaigns. Google is offering more features for advertisers to set themselves apart, like special offers or the Trusted Stores badge.
There’s a bright future for Google Shopping, but it won’t be as easy as it used to be.
13. Have you ever been to Brno before?
No, not yet, but I’ll arrive early so I hope to see some of the city before the festival starts. As I don’t speak Czech, I’m grateful for the English guide in Brno that Marketing Festival provided. See you there!
We are also looking forward to seeing you all at Marketing Festival 2014. Don’t be shy, come and meet the Kentico team!