This is a guest post by Xurxo Vidal. Xurxo is a co-founder and search marketing strategist at Bloom Search Marketing – an agency specialized in paid search campaigns, SEO, Google Analytics and conversion improvement. We are lucky to have him here today to talk about optimizing Adwords campaigns. You can find more of Xurxo’s writings on his company’s blog.

You’re spending your hard earned cash to advertise your products and services on Google, so finding out how well your campaigns are working is critical to your success with AdWords. Today I’m going to cover some of the key reports available to you to track your campaign’s performance and identify problems and opportunities so you can maximize your ROI. You’ll find these by clicking on the “Reports” link under the Reporting tab in your AdWords account.

It’s easy to get overwhelmed by the amount of data that’s available to you in the reports so it helps to first define your business goals (Sales, leads, downloads, branding/visibility, etc.). Once you’ve done this you can figure out what metrics you need to look at that will give you insights into reaching those goals more quickly. Also you may want to exclude keywords and ads that have zero impressions (meaning that they’ve haven’t been displayed yet and have no actionable data).

The reports I’ll cover in this two part post are:

  • Keyword Performance Report
  • Ad Performance Report
  • Geographic Performance Report
  • Search Query Performance Report
  • Placement Performance Report

Keyword Performance Report

In this report you’ll be able to drill down to the keyword level and see which keywords are generating the most impressions, clicks and conversions (provided you installed the AdWords conversion tracking code – You can find the instructions to do so here:) as well as other key campaign metrics you can use to make improvements. You can filter to only see keywords that match specific criteria like keywords with a cost of greater than $50 or with greater than 200 impressions. This way you get to critical information faster so you can take action.

If you export the report to excel, you can sort and filter the data further. Often you’ll need to look at two or more metrics at the same time to really see how a keyword is performing.

For example you might see that one keyword is generating sales at a profitable cost per sale ratio, but the impressions are high, CTR is low (Note: A high number of impressions is relative, but usually we’re talking about at least a few hundred impressions and a low CTR generally is anything less than 2% but varies from sector to sector). What this means is that over time this keyword will drag down your quality score and become increasingly expensive to maintain your ad positions on.

Here are some additional ways to slice the data in the keyword performance report so you can find problems and opportunities:

  • Sort by cost (largest to smallest) first and look at conversions, conversion rate, cost per conversion. These metrics will reveal what your most costly keywords are doing for you. Are you getting sales or just clicks? You may not have the right keywords in your campaigns or you may not be sending the traffic to the most relevant pages on your website.
  • Sort by impressions and look at your CTR (Click Through Rate). What you’re looking for here is keywords with a high number of impressions in your campaign and a low CTR. A low CTR on high impression keywords over time will lower your quality score and force you to pay more for your traffic overall. Here’s why: Bid x Quality Score = Ad Rank, so to maintain your ads in the same position, the lower your quality score, the more you’ll have to pay relative to your competition and CTR is the single most important factor Google uses to calculate your quality score.

Fixing A Low Click Through Rate

There are several things you can do to fix a low CTR:

  • Review your negative keyword list and make sure you include keywords you don’t want traffic for. A good way to find these is by using the Adwords Keyword tool to see what people are searching for and if these are relevant to what you’re offering. Also the Search Query Performance Report which I’ll cover in a bit can reveal untargeted traffic to exclude from your campaigns.
  • Do you have too many loosely related keywords in one adgroup? For example: “dress shoes”, “running shoes”, “women’s shoes”, “men’s shoes”. These belong in separate adgroups where you can write compelling ads for each keyword variation that potential customers will find more relevant.
  • Split test two ads per adgroup. You’ll want to have two ads running against each other all the time so you can find a clear winner – one that delivers a higher CTR and conversion rate so you continuously work to get more traffic and conversions at a lower cost. Once you identify the winning ad, pause or delete the losing ad and test a new variation. (Just remember to rotate your ads evenly when doing this so Google doesn’t skew the results – here’s some info on how to do that:)

Ad Performance Report

This report shows you performance metrics on your text ads. It comes in handy when you’re running ad text split tests as I described above. Here are a few ways to use this report:

  • Look for ads that get a high number of impressions and a low number of clicks yielding a low CTR. You may have some opportunities to write better ads to get more people to click and visit your site.
  • Sort your ads by conversions from largest to smallest to spot winners – in other words ads that are driving sales, leads, downloads, etc. for you. You should do this monthly or weekly depending on the amount of data you have.
  • Test new variations based on the winning ad. You can try testing one variable at a time such as changing the headline or one of the two lines of text.
  • Now do the opposite – sort your ads by conversions from smallest to largest. If you spot ads that have high CTRs and low conversion rates or a high cost per conversion, then your landing page may need some work to convince people to take the desired action more often.

Geographic Performance Report

The Geographic Performance report shows you where your ads are being shown and how they are performing in specific geographic areas. You can see this information at three different levels: The Account, Campaign and Adgroup levels. If you’re advertising nationally or globally you’ll find this report very useful. It can even offer insights if you’re advertising more locally, but actionable data is highly dependent on the amount of traffic you receive so you may have to run the report using a longer date range so you have enough data to spot any clear opportunities or problems.

How to use this report to your advantage:
When you first run the report, you might want to do so at the account or campaign level to see at the highest level in which geographical regions your ads are performing the best.

Once you’ve run the report you may discover that some of your campaigns are clearly performing better in some countries, states or cities. With this information you could do a few things:

  • Build out new campaigns targeting higher performing geographical areas and bid more aggressively in those markets. Since your conversion rates are stronger in those markets you can afford to pay more per click. Conversely once you split up your campaigns by geography, you can also reduce your bids in your original campaign(s) if the conversion rate(s) drop.
  • You can use the AdWords Editor, a free tool from Google, to quickly duplicate your original campaign by copying and pasting it and then change the targeting to the new area you want to target. Just remember to exclude the areas that you build new campaigns for from your original campaign to avoid any overlap.
  • Write ads for those specific geographic areas to increase the CTR and conversion rates once you’ve built out new campaigns targeting stronger performing areas. Even if you are a national advertiser, you might find it lucrative to write ads that cater to smaller local markets that generate a proportionately higher demand for your product or service.
  • Google’s quality score is being calculated in different markets by how well or poorly your ads perform in them (CTR-wise), so targeting markets individually and writing ads directed at those markets help you keep your costs down while giving you and edge over your competition. Start with the larger markets where your performance is stronger and work your way down.


    • Disclaimer: Be careful not to spread yourself too thin by over segmenting your markets. You’ll want to make sure there is enough search volume in a market to justify targeting it on its own and writing ads specifically for it.

    Up Next

    Use these reports wisely and you’ll be well on your way to increasing your ROI with AdWords. Don’t miss part 2 coming up next where Xurxo talks about the

    • Search Query Performance Report
    • Placement Performance Report

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