How Ad Impression Share Affects Your PPC Account Performance
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How Ad Impression Share Affects Your PPC Account Performance

Last updated on November 11, 2016 by Jacob Baadsgaard in AdWords Advertising
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As the CEO of a PPC marketing agency, I’ve had the opportunity to audit a lot of PPC accounts. Most of these accounts have elements that are working… and elements that aren’t.

Unfortunately, those dysfunctional elements do a lot more than just waste your PPC budget. They actually reduce the effectiveness of the elements that are working.

How? Lost impression share (IS).

Okay, so parasitic account problems kill account performance in a lot of ways, but one of the biggest problems is lost impression share.

Are you paying for the wrong ad impressions?

Every click comes with an opportunity cost — if you’re paying for one click, you’re not paying for another click.

And, once your budget is spent, you can’t pay to play in the PPC auction.

Now, if most of your ad impressions and clicks are producing conversions, that’s not a big deal. The problem is, most companies spend their PPC budget on search terms that never produce conversions.

In fact, the average AdWords account wastes 76% of its budget on search terms that never convert.

As a result, advertisers don’t have enough budget left over to truly capitalize on the search volume for their converting search terms.

Essentially, they are wasting most of their impressions on the wrong keywords.

Diagnosing the problem

So, how can you tell if you’re getting impressions on the right keywords? To begin with, we need to take a look at where your budget is actually going.

Tracking conversions

First off, you need to have good conversion tracking in place. If you aren’t tracking conversions, you can’t tell if you’re getting impressions on keywords, search terms, or ads that produce conversions or sales.

And, it’s not enough just to track “some” or “most” of your conversions. You need to track calls, chats, purchases… everything!

If you’re thinking, Oh, well, that doesn’t really apply to me, I’m already tracking everything, you may want to double-check yourself — only 29% of paid search advertisers are actually tracking all of their conversion actions.

Sit down, make a list of everything you want people to do after they click on your ad and then check and see if you have a good system in place for tracking all of those actions.

Hopefully, you’re already in that 29% bracket, but if not, get your act together because it’s worth it!

Checking your data

After you’ve got the right conversion tracking in place, you’ll need to wait a few months to accumulate a good amount of quality conversion data.

Once you have that data, it’s time to dive into the details.

Set your date range for the past 3-6 months and click on the “Keywords” tab.

Now, click the Filter drop-down menu and “Create filter” for “Conv. rate < 2%” as follows:

This picture shows marketers how to use AdWords to filter keywords by a specific conversion rate.

This should produce a list that looks something like this:

This picture shows marketers how much wasted ad spend can cost your campaigns' ROI.

As you can see, this particular account had wasted over 11% of their ad spend on just five poorly-converting keywords. Clearly that’s a problem, but let’s take a look at how that wasted ad spend affects your converting keywords.

Go back to your filter and change it to “Conv. rate > 2%”. Next, click on Columns > Modify columns and make sure that “Search Impr. share”, “Search Exact match IS” and “Search Lost IS” are selected:

adwords-impression-share-columns

Now your list should look something like this:

This picture shows marketers how to calculate impression share and determine lost impression shares.

Can you see the problem here?

In this particular client’s case, they have a keyword that is converting 8.28% of the traffic it generates and yet, it’s only getting one-third of the available impressions—even when someone types in that exact keyword.

The question is, why? There are actually a couple of problems here.

1. Search Lost IS (rank)

If you look at the far right column, you can see that all of these keywords are losing a lot of impression share because their bids are too low. They aren’t getting seen!

For keywords that are converting well, this is a big potential problem. Why would you spend money on keywords that don’t convert very well, but not bother to spend enough to get your best keywords seen?

That being said, you do have to balance the increase in CPC with the increase in impression share. Most of the time, it’s worth it to bid higher on your good keywords, but you’ll need to determine what cost-per-click works for your business.

2. Search Lost IS (budget)

This number is a bit harder to track down. If you note which campaigns your high-performing keywords are in and go back to the Campaigns tag, you can view the Search Lost IS (budget) for that campaign (just add it as a column).

In this client’s case, that keyword with an 8.28% conversion rate was part of a campaign that was losing 77% of its impression share to budget limitations.

And where was that budget going? Paying for clicks on all of those poorly performing keywords.

Talk about a missed opportunity!

Fixing the problem

Whenever possible, you should aim to have a 90% or better impression share for your high-converting keywords. After all, if a keyword is profitable for your business, why wouldn’t you want every possible click and conversion from that keyword?

Now, you may be wondering, what actually happens when you stop spending money on the wrong impressions and instead push that money towards the keywords that matter?

Let me show you!

In the case of our client above, we stopped bidding on their useless keywords and focused their budget on what was working.

Here’s what happened... the blue dot right before the lines intersect is where we stopped bidding on useless keywords:

This graph shows marketers how to determine how many lost conversions you get when losing impression shares in AdWords.

Almost overnight, the client’s ads were showing up for the right searches twice as often and sales increased more than 50% within a month.

After nine months, sales had more than tripled.

Best of all, we accomplished this without increasing their ad budget. The client didn’t pay a penny more for AdWords and got 3x the sales volume.

All we had to do was give their high-performing keywords the impression share they deserved.

How many conversions are you missing out on?

Clearly, optimizing your impression share can yield fantastic results. The only question is, how big of a difference will it make for your campaigns?

Fortunately, calculating the effects of optimizing your impression share is fairly simple.

For example, let’s say you have the following high-performing campaign:

  • 5% click through rate
  • 10% conversion rate
  • $5 cost-per-click
  • 25% impression share
  • 25,000 impressions per month

That means your campaign has the potential to be seen 100,000 times (25,000/0.25 = 100,000) each month. In other words, you’re missing out on 75,000 potential impressions.

Now, let’s say you have a Lost IS (budget) of 66%, which means that 66,000 of those 75,000 missed impressions are being lost to budget limitations.

In this situation, if you keep your bids the same but decide to spend whatever it takes to get all of those 66,000 missing impressions, here’s what you can expect:

  • You will get an extra 3,300 clicks
  • Those extra clicks will translate into 330 extra conversions
  • Your total cost for this campaign will increase from $6,250 to $22,750
  • You will pay $50 per conversion

Now, at first glance, that might seem like an expensive way to get an extra 330 conversions. But here’s the thing, you’re probably already spending that $16,500 on keywords that aren’t converting effectively.

If on average, that $16,500 is paying for clicks with a 1% conversion rate (assuming that all of your other campaign factors are the same), that $16,500 is currently producing 33 conversions.

That means your total $22,750 of ad spend is only generating 158 conversions (125 from your good keywords, 33 conversions from your poor keywords) at a cost of $144 per conversion.

You know what that means? You could nearly triple your conversions without increasing your ad spend!

Are you getting the most out of your AdWords impressions?

Impression share is often easy to ignore, but maximizing your impression share for high-performing keywords can be an incredibly effective way to improve the performance of your PPC advertising.

It can take a little extra sleuthing to identify your keyword winners and losers, but the results are definitely worth the effort.

How do you feel about your PPC impression share? Did you even know that metric existed? Is it an important metric to your campaign success? Do you agree with the approach in this article?

About the author
Jacob is a passionate entrepreneur on a mission to help businesses achieve online marketing success. As the Founder & CEO of Disruptive Advertising, Jacob has created an award-winning, world-class organization that has helped hundreds of businesses grow using pay-per-click advertising and conversion rate optimization.

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