If you’re a Google Adwords advertiser, you might be paying more than you really need to for your Google Adwords campaigns. If you’re not savvy, Google is likely charging you an “idiot tax” for being less relevant than they want you to be. Andrew Goodman recently wrote about this in Badly-Managed AdWords Accounts — Worse for You Than for Google in which he discusses how a poorly managed Adwords account can often generate less ROI than a TV or Radio advertising campaign and the core reason for this is Google’s “Idiot Tax”.
What is Google’s Idiot Tax?
It’s where Google dings the quality score of your listings and forces you to pay more per click than you normally would have to pay. How can you tell if Google is charging you an idiot tax?
You know Google is probably charging you an idiot tax if…
- You look under the Quality Score column of your keywords list and it shows a number between 1 and 4. Don’t see a Quality Score column? Click ‘Filters and views’ > ‘customize columns’, check off ‘Qual. Score’ and click the ‘Save’ button.
- Your AdGroups contain only 1 ad.
- Your CTR (Click Through Rate) is really low.
- Your AdGroup contains tons of keywords.
- Your AdGroup contains very broad keywords.
- Your account doesn’t have much history.
Feel free to add your own to the list in the comments.
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If you are bidding for top spot, a recent study showed conversion rate is the same regardless of ad position.
Jamies – That’s very interesting. Got a link for that study?
Also, does CTR rate stay the same? If not then it might still be worth trying to outbid others and increasing your cost per conversion. I’d like to see this study also.
Found the link: http://adwords.blogspot.com/2009/08/conversion-rates-dont-vary-much-with-ad.html
It is less a study and more a report from Google’s Chief Economist.
Thanks! That’s very interesting. I’ll have to look at my own campaigns and see if this analysis holds up. It’s definitely believable.