Visibility

Search marketers focus heavily on cost-per-click, clickthrough rates and quality scores, but many fail to monitor one of the most important metrics in search advertising: ad coverage.

For marketers that have typed in a favorite search phrase on Google only to discover their ad was nowhere to be found, coverage can help. Coverage tells marketers exactly when their ads do and do not show up.

Ad coverage is the percentage of time an ad appears when someone searches for the specified, targeted terms. For instance, if 100 people search on a marketer’s keyword phrase and that marketer’s ad appears 60 times, then the ad coverage for that phrase is 60 percent.

Coverage is rarely discussed in any online forum, but it is one of the key differences that separate great campaigns from mediocre ones. Ad coverage is the Rosetta Stone that unlocks the key to the latest search engine algorithm. Ad coverage identifies problems in a campaign that the marketer would not otherwise know existed. Most importantly, ad coverage often helps marketers double or even triple search traffic.

This article outlines three reasons marketers need to monitor the all-important statistic of ad coverage.

Low Coverage = Lost Opportunities

The following chart examines the advertising landscape at the keyword level and plots ad placement over a three day period for the popular search phrase, “anonymous surfing.” The left-axis shows ad coverage, while the bottom axis shows the average position of each advertiser. It is generated using statistical sampling of keywords, taken round-the-clock from various points throughout the country and so conveys a true picture of what search engine visitors truly see.

At the top of this chart are five advertisers who appear virtually every time someone searches for this phrase on Google. Below them are another six who appear less often (35-70 percent of the time). At the very bottom are the unlucky marketers who appear only once in a blue moon.

The advertiser located at position 2.0 receives only 2.7 percent of the available search impressions, despite the fact that he is likely bidding more than any of the other advertisers appearing for this phrase. The marketer behind this campaign probably thinks this is a low-traffic keyword, because he sees few impressions on his campaign reports. Little does he know that he could likely increase his traffic by 3,700 percent if only he was aware of this coverage problem.

Figure 1 While a few advertisers capture virtually every impression, others (who are bidding just as much) capture only a small percentage of the available inventory.

Many marketers think that increasing their bids will give them more traffic. There is some truth to this, because higher bids tend to increase an ad’s position on the search results pages, and higher positions translate to higher clickthrough rates. Marketers could typically increase traffic by 20, 50, or even 100 percent by increasing bids as a result of the improved ad placement. However, this pales in comparison to the types of gains advertisers regularly achieve by simply identifying and fixing their coverage problems.

Low Coverage Shows Where Marketers Overpay for Traffic

The chart below demonstrates another example, this time for the phrase, “search keyword.” This chart shows that AdGooroo has a coverage of 100 percent. By referencing campaign statistics, it is apparent that AdGooroo gets an average 1.6 percent clickthrough rate on about 1,200 impressions per day. AdGooroo pays $1.07 average cost per click (CPC) and gets about 19 clicks per day, for a daily average spend of $20.54.
 
Figure 2 This chart shows the average placement of all advertisers for the keyword, "search keyword," over a three day period.

The advertiser below AdGooroo at position 2.0 (let’s call them XYZ.com) bids roughly the same amount, but it gets a coverage of only about 3 percent. One could assume that XYZ.com’s ad performance is roughly the same as AdGooroo’s, and they are getting 0.57 clicks per day (about 17 clicks per month) for an average daily cost of $0.61.

XYZ.com shows up at only three percent coverage due to a number of well-entrenched advertisers (including AdGooroo) who can’t be easily dislodged. In order to dislodge an established competitor, XYZ.com would need to establish a substantially higher clickthrough rate. This is very difficult to do when the ads appear so infrequently.
XYZ.com could reduce their bid for this keyword. Although this will drop their average position on the search results page, it often increases coverage because XYZ.com will be facing fewer dominant competitors. In the chart shown above, there appears to be a gap around position 5.0, so that’s a good place to aim for.

Assuming this strategy works, and XYZ.com drops their bid to $.50, their average position drops to 5.0, their coverage increases to 100 percent, and their clickthrough rate drops by 40%. Here’s what their keyword performance looks like now:

Average position: 5.0
Average CPC: $0.50
Coverage: 100 percent
Impressions: 1200
Clickthrough rate: 0.96 percent (40 percent lower)
Clicks: 11.5(= 1200 impressions × 0.96 percent clickthrough)
Daily cost: $5.75 (= 11.5 clicks × $0.50)

XYZ.com now pays 54 percent less for each visitor, and they increased their traffic by more than 2,000 percent.

If a marketer has a dollar to spend, should they spend it all to get one visitor to your site? Or would it make more sense to pay a quarter for each of four visitors? Should they consider a dime each for ten visitors? The answer is obvious. This is the edge that ad coverage offers marketers.

The current dogma leads marketers to believe that they should bid as much as they can comfortably pay. However, this is only true once their ads are appearing most (or all) of the time. With coverage, marketers can understand the right time to drop bids, not raise them.

Coverage provides unprecedented transparency into the search engines

As useful as ad coverage is to a search marketer, it offers a level of transparency into search campaigns that the search engines do not currently provide. Without coverage statistics, most marketers fly blind. A dizzying array of factors comes into play when the search engines decide which ads to show, including:

o    Remaining budget available for the day
o    Overall competitiveness of the targeted keyword phrase
o    Clickthrough rate of an ad relative to that of a competitor
o    Assessment of the overall quality of the marketer’s landing page
o    Similarity of the keyword phrase to the ad copy and landing page
o    Historical performance of competitors for each keyword phrase
o    The latest algorithm “tweak”

With all of these factors in constant flux, there is simply no way to tell from standard reports alone whether any glaring holes exist in a search campaign. Conversely, advertisers achieve great success by augmenting their standard reporting with ad coverage charts such as the ones shown below. These charts allow marketers to instantly identify any problems in their campaigns and quickly rectify them - often within 24 hours.
 
Figure 3 Keyword comparison charts give campaign managers a way to quickly zero in on keywords with low impression share.
These are just three of the many ways in which coverage can help search marketers, but coverage can also diagnose other common campaign problems, such as keyword matching and ad quality issues. While coverage was once difficult, if not impossible, for marketers to track manually, automated data analysis tools now help marketers get a major leg up on the competition. Analysis and benchmarking without this indicator is ill advised. Coverage is a necessary metric to gain a comprehensive understanding of keyword performance, as well as a holistic and accurate depiction of the competitive landscape.