We run extensive pay-per-click search-ad campaigns for many clients, and — like other SEM consultants — have learned how to tweak our campaigns to get the best results. For one thing, we rarely use the “broad match” option, in which Google shows ads for virtually any one of the keywords in a given phrase. It just hasn’t worked for us, in terms of high clickthrough rates (CTRs) and lower ad spends.

Google has expanded the broad-match option, to include related — but not identical — words and phrases that their algorithm identifies with the phrases selected by the AdWords customer. We immediately thought that a bad idea, as research and experience have shown that CTRs increase when selected phrases are used in the ads themselves. Hence, letting Google select its own search terms to match with our ads would, we believed, lower our ads’ CTRs and increase our clients’ overall costs.

A new SearchInsider column by Tim Daly of SendTec has validated our concerns. Tim’s company ran some specific tests, changing all their chosen phrases to “exact match” — the opposite of “broad match” — and tracked the results. They found their CTRs improved and costs went down, proving that “shotgun”-style broad match was less efficient than “rifle”-style exact match.

Here’s a quote from Tim’s article:

Curious about the effect that this natural extension of the broad match is having on advertisers, we conducted a test to find out. The foundations of the test: Change all keywords in a relatively small campaign to exact match and see what happens to performance data. After just one week, we evaluated impressions, clicks, click-through rates and cost-per-click — and what we found was astonishing. Impressions decreased by 24.38%, yet clicks only decreased by 15.68%, thus resulting in an 11.36% increase in the click-through rate. Since the click-through rate plays an integral role in the Quality Score algorithm, the average cost-per-click decreased 23.77%. Most interesting, the performance changes were instantaneous, suggesting that expanded broad match negatively impacted Quality Score and Ad Rank.

So, what does this all mean?

In summary, these results suggest that Google’s expanded broad match is potentially serving less than optimal ads, lowering click rates, increasing cost-per-clicks and negatively impacting your Quality Score. Because some marketers are blind to Google’s ad serving, bid changes are being made to the wrong “broad matched” keywords, causing changes to Google’s Ad Rank. As a result, the wrong ad gets served and advertisers may then unknowingly pay more than they should for the ad placement. In worst case scenarios, Google may be sending traffic to the wrong page on your Web site given the ad it chooses to service — which in turn could negatively impact your conversion performance.

Thanks, Tim!

SEOmoz has just posted version 2 of Search Engine Ranking Factors. It’s a compilation of opinions from 37 top industry practitioners/writers, regarding what factors are most important for Google in determining visibility rankings. The factors are broken into three categories:

1) Top 10 Positive Factors
2) Most Controversial Factors
3) Top 5 Negative Factors.

This is a great best-practices list to review and think about, especially when coming back to refresh the optimization of older sites. It’s good to see that the Top 10 Positive Factors are all ones that we’ve been recommending to clients for years, and implement whenever possible given a site’s design and sales/marketing purpose.