The only problem?

You wasted a good chunk of that $50 billion on advertising that didn’t convert, didn’t show ROI, and wasn’t intelligently conceived. Ideagility founder and CMO Rahm McDaniel wants to change that.

“Our typical customer sees their overall spend decrease by double digits,” he told me. “And their conversion rates increase by double digits.”

Source: Ideagility

Conversion rates

The big boys, companies like WalMart and PC Mall and Amazon, spend millions of dollars on Google AdWords. So they have whole teams of brainiac advertisers constantly tweaking campaigns, editing ads, A/B testings copy, and generally doing everything you don’t have time to do. Which is why pay-per-click management software like Ideagility’s AgileBid makes sense: it makes the software do the work for you.

“Big companies tend to view little companies as small, stupid versions of themselves,” Ideagility’s CEO Ron McDaniel says. “Google has built this amazing advertising platform … but the learning curve of Adwords is too high for most business that do $1000/month on Adwords to be worth their time.”

Managing a PPC campaign is labor-intensive. You set up multiple ads, choose keywords that you’re targeting, and then iterate daily via multivariate testing to optimize three key metrics: click-through rate, conversion rate, and return on investment. Some keywords are worth more, because they convert at a higher rate and convert into higher-paying customers. Some keywords stimulate huge click-through, but poor conversion. Failing to optimize means failing to win: paying Google too much for advertising that does not efficiently accomplish your objectives.

So McDaniel, who built the software for AgileBid for his own use initially, created software to optimize AdWords spending regularly, repeatedly … forever.

“If you can make a 10 percent improvement on your bid process every day — which is what humans don’t do well — then that’s where the largest returns come from,” he told me.

Here’s how it works.

After initial set-up, AgileBid is constantly active moving dollars out of areas of negative returns, into areas of positive returns. Most of the keywords that you’re able to think of when setting up a campaign are the exact same keywords your competitors thought of, so they’re expensive, may not convert well, and don’t have great ROI. AgileBid is constantly looking for new, related keywords, and unexplored opportunities.

AgileBid spends about 20 percent of your budget on that testing. The hidden gold it uncovers in out-of-the-way keywords and ads is what drops your spend and boosts your conversion rates by double digits. That means if you’re spending $1000/month, you could reduce your ad budgets to $800 and still get better results.

Source: Ideagility

Ideagility dashboard

AgileBid isn’t for everyone, McDaniel is quick to clarify. Other PPC automation tools such as WordStream, Kenshoo, Marin, and Acquisio offer more features and more customizability. But that’s just the opposite of what AgileBid was intended to do.

“We’re like a 4-hour work week tool,” McDaniel says. “The problem isn’t that people don’t have enough features … what our customers have told us they don’t have time to mess with that stuff. So we give our clients a look at what’s happening, but not a lot of knobs and dials to turn.”

The results are impressive.

McDaniel says that the big AdWords spenders like Amazon, PC Mall, Overstock.com, Costco, and Macy’s average about 2 to 3.5 percent conversion rates. (That’s pretty good — I’ve personally managed PPC campaigns, and a single percent is generally considered par for the course.) AgileBid’s customers — typically small businesses without huge, well-known brands — convert at an astonishing 3.37 percent.

In other words, better than NeimanMarcus, Overstock.com, PC Mall, and Costco, and almost as good as Amazon.com and Macys.

In other words, impressive.

photo credit: faith goble via photopin cc

On that earnings call, CEO Larry Page said he was “very, very optimistic” that Google’s mobile revenues would be going up, that Google was “working to simplify our ad system,” and that, although he didn’t have anything to announce immediately, the company was making “rapid progress in that area.”

Now we know at least part of what he was talking about.

Source: WordStream

The old way of adding mobile devices, all of which is going away

Today Google very quietly announced new AdWords API features supporting “enhanced campaigns.” By ‘enhanced,’ Google means mobile. And despite the quiet launch, it’s the biggest change to AdWords in the last five years, according to one key member of the online advertising ecosystem.

“This is a huge simplification to how advertisers manage and track mobile advertising campaigns,” Larry Kim, CEO of search marketing firm WordStream, told me today.

The problem in the past was that AdWords was desktop-centric. Building a successful mobile marketing in the past essentially forced advertisers to create multiple campaigns if they wanted to target different cities and devices effectively, massively increasing complexity to the point that only about 5 percent of AdWords users were actually using the services’ advanced features.

The key difference today is that mobile is now baked in by default.

With the update, Google is adding the ability to simply and quickly set up geo-targeted advertising campaigns via new bid adjustment features: spend more close to your locations, spend increasingly less in farther and farther locations. In addition, mobile devices can be easily be managed in the same campaign that targets desktop searchers, with an option that very simply and easily increments or decrements your standard ad price.

“They’ve re-thought the whole way of setting up campaigns,” Kim says. “Now, you just have one campaign, and in that campaign you can bid differently depending on whether the person is on mobile or desktop. You can use the ‘mobile bid multiplier’ to, for example, bid 50 percent of your desktop bid, or 125 percent of your desktop bid.”

To turn off mobile, advertisers will have to turn the bid multiplier for mobile devices to -100 percent … effectively shutting it down. On the positive side, the multiplier can be turned up to 300 percent of your desktop bid for high-value keywords in the right location at the right time.

Google says it’s done this because now “instead of having to cobble together and compare several separate campaigns, reports and ad extensions … [advertisers] can easily manage all of this in one single place.”

The new features, Kim says, address the two biggest stumbling blocks that small businesses and startups have with AdWords: it has not been easy to create successful campaigns, and the conversion and reporting tools have not made it super-easy to see return on investment.

“I think they’re the two biggest hurdles in mobile advertising adoption, and this means a lot more advertisers will adopt Google AdWords,” Kim told me. “Now you don’t have to be a full-time search marketer to do this anymore … and you’ll see more ROI from mobile searches.”

photo credit: Stuck in Customs via photopin cc

Google is best known for its web search product, which has completely overturned how we research and find answers. But the search itself is only the basis upon which its golden empire has been built. Advertising based on search, as well as banner advertising on websites touches nearly every industry. It even created the jobs of the search engine and display marketers, whose responsibilities include understanding Google AdWords and Adsense, as well as navigating the strategy behind bidding and maintaining ad campaigns.

In 2011 the industry which used Google’s advertising the most was the finance and insurance industry with $4 billion handed over to Google. State Farm topped the charts at a whopping $43.7 million spent. The most common search term in this industry with the highest cost per click was “self-employed health insurance,” which charged advertisers around $43 for every time someone clicked their advertisement.

The retail and general merchandise industry holds second place for most spent on Google ads, with Amazon leading at $55.2 million spent. You would think that number would be so high to accommodate Amazon’s recent debut of the Kindle Fire, but the most commonly search for keyword in the retail industry was actually “Zumba dance DVD.” If we learn anything from common keywords it’s that the economy is down, so people are self-employed and want to dance at home for exercise.

Travel and tourism came in third with $2.4 billion spent on Google advertising. Jobs and education came in fourth, and home and garden in fifth.

Check out the infographic below for more on who contributes to Google’s huge wealth.

Rich man image via Shutterstock

It is a cardinal rule of advertising that you present the user with one call to action. Clicking on a +1 next to an AdWords ad makes no sense at all – it is already hard enough to get people to click on an ad without adding confusing paraphernalia around the unit.

A store selling futons in San Francisco that pays for a targeted ad to people in the Bay Area searching for futons wants people to click on the ad, not the +1 next to the ad. The Google +1 AdWords implementation is an obstacle to conversions with very little upside. Google Instant is already impacting click through rates by automatically populating search results as users type, and Google +1 is going to make the problem worse.

Google is clearly attempting to mimic the popular Facebook ad feature where people “Like” a Facebook page. However, in Facebook, Liking a page is essentially opting in for newsfeed updates — the Facebook equivalent of a mailing list opt-in — which is why marketers are willing to pay for ads that incent users to Like their Facebook page. Google +1 offers no such benefit. In addition, while users are happy to “Like” Disneyworld, chances are they are not going to like “25 percent on futons today only!”

Granted, the +1 feature will help Google better rank search results by involving crowdsourced humans instead of algorithmic computing, which have been increasingly gamed by search marketers. However, it seriously begs the question, why isn’t Google simply ranking results based on what people are clicking on? If a user clicks on one link and doesn’t come back to click on other results, that indicates they have found what they are looking for.

Google +1 is a great step forward for Google as it is finally admitting that perhaps humans can be smarter than machines when it comes to detecting relevant content. But Google has already nailed how people like ads: By clicking on them.

Peter Yared is the vice president of apps at Webtrends, which acquired Transpond, a social-apps developer he founded.