This presentation was originally presented at Hero Conf London by Martin Rottgerding.

1. Debunking Ad Testing
Martin Röttgerding
Head of SEM
Logo Here

2. Learner Outcomes
• Ad testing best practices don‘t work
• What actually happens when you follow best practices
• What you should be doing instead

3. Martin Röttgerding
• Head of SEM @ Bloofusion Germany
• Blogger @ PPC-Epiphany.com
• Judge @ SEMY (German Search Awards)
• Dad @ Home
Who’s Talking?
@bloomarty

4. First off: No Worries
• I’m not a mathematician.
• This is not a math lecture.
• I brought some data, though.
iStock.com/digitalgenetics

5. In the Beginning: Optimize for Clicks
% Served Impressions Clicks CTR
Ad 1 96% 12,323 594 4.82%
Ad 2 4% 536 37 6.90%

6. Alternative Approaches
• Gut feeling
• Rules („wait 100 clicks, then decide“)
• Statistical Significance (usually: 95%)

7. Statistical Significance in a Nutshell
Impressions Clicks
Ad 1 200 10
Ad 2 200 20

8. Statistical Significance in a Nutshell
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16%
CTR
Ad 1
Impressions Clicks
Ad 1 200 10
Ad 2 200 20
Ad 2

9. Statistical Significance in a Nutshell
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16%
CTR
Ad 1
Impressions Clicks
Ad 1 200 10
Ad 2 200 20
Ad 2

10. Statistical Significance in a Nutshell
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16%
CTR
Ad 1
Impressions Clicks
Ad 1 200 10
Ad 2 200 20
Ad 2

11. Statistical Significance in a Nutshell
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16%
CTR
Impressions Clicks
Ad 1 2000 100
Ad 2 2000 200
Ad 1 Ad 2

12. Pros and Cons
• You have the power.
• You know what to do.
• You look good.
• It doesn‘t work.

13. Waiting for Significance
Problem #1

16. Is it significant yet?
no
no
no
no
no
no
no no
no yes
„We are 95% certain that this ad is better than the other one.“

17. An Experiment
• 576 ad pairs
• Rotated evenly
• Left untouched for 12 months

18. Analyzing the Data
• Script to evaluate the data
• Calculate level of significance for each day
• Visualization:
– Ad 1 reaches statistical significance (95%)
– Ad 2 reaches statistical significance (95%)

19. The Result (a small part)
statistically significant
no longer significant
still significant…
waiting for significance

20. The Result (zoomed out)

21. The Result (zoomed out)

22. Results
• Most tests reached a significance level of 95% at some point
Minimum total Impressions Tests to reach significance Still significant in the end
1,000 55% 13%
10,000 62% 12%
100,000 81% 11%

23. Not looking at all the pieces
Problem #2

24. So this is what we see…
Impressions Clicks CTR
Ad 1 2,000 200 10%
Ad 2 3,000 240 8%

25. How we tend to think of CTR
CTR
Your Ad

26. What drives CTR?
CTR
Ad
Network
(Google vs. Search Partners)

27. Search Partners?

28. Search Partners

29. Segmented by Network
Impressions Clicks CTR
Ad 1 2,000 200 10%
Google
Search Partners
Ad 2 3,000 240 8%
Google
Search Partners

30. Segmented by Network
Impressions Clicks CTR
Ad 1 2,000 200 10%
Google 1,000 180 18%
Search Partners 1,000 20 2%
Ad 2 3,000 240 8%
Google 1,000 220 22%
Search Partners 2,000 20 1%

31. Also possible…
Impressions Clicks CTR
Ad 1 2,000 200 10%
Google 1,000 180 18%
Search Partners 1,000 20 2%
Ad 2 3,000 240 8%
Google 1,000 220 22%
Search Partners 2,000 20 1%

32. Also possible…
Impressions Clicks CTR
Ad 1 2,000 200 10%
Google 1,000 180 18%
Search Partners 1,000 20 2%
Ad 2 3,000 270 9%
Google 1,000 220 22%
Search Partners 2,000 50 2.5%

33. How common is this?
Based on a study of 6,500 ad pairs, compared with an AdWords Script
• Overall winner loses on Google • Overall winner loses on
Google & Search Partners
32.74%
12.23%

34. Quick Win: Ignore Search Partners
• Well…

35. What drives CTR?
CTR
Ad
Network
(Google vs. Search Partners)
Slot
(top vs. other)

36. Same thing with slots
Based on a study of 6,500 ad pairs, compared with an AdWords Script
• Overall winner loses in the top slot • Overall winner loses on top & other
18.46%
6.30%

37. What drives CTR?
CTR
Ad
Device
Ad positionNetwork
(Google vs. Search Partners)
Slot
(top vs. other)

38. CTR by avg. Position (Google top)
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0
Avg. Pos. CTR

39. Exact Positions‘ CTR‘s (Google top)
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0
Avg. Pos. CTR Exact Pos. CTR
18.05%
13.64%
12.05%
10.09%

40. Interpolated CTR‘s
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 4.0
Avg. Pos. CTR Exact Pos. CTR interpolated Exact Pos. CTR
18.05%
13.64%
12.05%
10.09%

41. What happens at the impression level…
• This is just a glimpse into impression level data
• How would you assess the following scenarios?

42. Scenario 1
Your ad
User clicks on this ad
… and never scrolls down

43. Scenario 2
Your ad
user clicks on this ad
…after 0.2 seconds

44. Scenario 3
Your ad
user clicks on your ad
… and on all other ads as well

45. Scenario 4
user clicks on your ad
… after spending 35 seconds
reading all search results
Your ad

46. How would you evaluate these?
• 4 impressions
• 2 clicks
• CTR: 50%

47. Ignoring Feedback
Problem #3

48. What drives CTR?
CTR
Ad
Slot
(top vs. other) Device
Ad positionNetwork
(Google vs. Search Partners)
Ad Auction
Ad ranking

49. CTR
The position feedback
• Positive feedback
• No loop:
position effects do not affect QS
Ad position
Ad Auction
Ad rankingHigher CTR
Higher
Quality
Score
Better
Position
Higher CTR

50. The impressions feedback

51. The impressions feedback
• Negative feedback:
• No loop:
low relevance impressions
evaluated separately
Higher CTR
Higher
Quality
Score
More less
relevant
impressions
Lower CTR
CTR
Ad Ad Auction

52. CTR Feedback
CTR
Ad
Slot
(top vs. other) Device
Ad positionNetwork
(Google vs. Search Partners)
Ad Auction
Ad ranking
mostly invisible

53. Thinking you are better motivated
than Google
Problem #4

54. Google doesn‘t
understand my
business Google
doesn‘t care
Ad testing isn‘t
important enough for
Google to get it right

55. The AdWords business model
„How much would you give us if we gave you the click?“
„How much would you give us if we showed your ad?“
Sell ad clicks
Sell ad impressions
Convert bids
No control over clicks
Advertisers want clicks

56. The ad auction
• 𝐴𝑑 𝑅𝑎𝑛𝑘 = 𝐶𝑃𝐶 ∗ 𝑄𝑢𝑎𝑙𝑖𝑡𝑦 𝑆𝑐𝑜𝑟𝑒
• = 𝐶𝑃𝐶 ∗ 𝐶𝑇𝑅
• =
89:;
8<=>?:
∗
8<=>?:
@ABCD::=9E
• =
89:;
@ABCD::=9E
= „How much would you give us if we showed your ad?“

57. Getting CTR wrong…

58. The concept itself
Problem #5

59. Conflicting Mindsets
Have a dedicated ad for everything.
Find the best ad and use only that.
[keywords]
?
?
?
?
?
?
?
?

60. Example: Location Context
• Are they out or at home?
• Are they moving or standing still?
• Are they at a familiar place?

61. Example: Search History
• Have they searched for this before?
• Did they interact with ads?
• Did they interact with organic results?
• Have they seen our ad before?

62. Example: Personality
• Do they take their time to read the entire ad?
• How do they respond to
– discounts
– reassurances
– testimonials

63. Testing for Things We Can‘t See?
• Manually: Impossible
• Otherwise:

64. What should we do?
So…

65. New Mindset
• You don‘t have control over ad testing. Let it go.
• There can be multiple winners.
• Use Google‘s optimized ad rotation by default.

66. Let the Machines Do Their Job
• Google is well motivated
• Google is really good with data and algorithms[citation needed]
• Let Google decide which ads to show

67. Provide Meaningful Ad Variations
• Create ads for client personas
• Try out different USP‘s
• Big stuff first

68. Know Google‘s Limits
• CTR & conversion rate
• Historical data
• Semantics

69. Keep an Eye on the Machines
• If necessary, force data collection
• Rotate at adgroup level
• Consider the cost of even rotation
• Alternative: Add the ad again
iStock.com/RichVintage

70. To Sum Up…
• No more micromanaging ad tests
• Focus on messaging and supervising the machines

71. Thank You!
• Agency Blog: Die Internetkapitäne
• Advanced AdWords Blog: PPC-Epiphany.com
@bloomarty
Martin Röttgerding
Head of SEA
Bloofusion Germany GmbH
martin@bloofusion.de