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Old 08-27-2004   #1
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Broad Match Versus Exact Match: How Does Placement Work

I haven't touched AdWords, as in running a campaign, since it first started. My question, is probably basic, so here it is.

I set up an AdWords campaign for a client. I want to be very specific about the keywords I go for. So I used exact match, i.e. [keyword phrase]. Now I want to know, if a competitor is using broad match and pays a higher CPC then what I am paying on exact match, will the broad match be placed higher?

The reason I ask is because, when entering in the keywords in exact match form, they ask for the max cpc. So they use traffic estimator and tell you how much to bid. Most say 5 cents.

Does this question make sense? I feel like such a newbie, well I am to this.
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Old 08-27-2004   #2
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Some basics on position...

Quote:
I set up an AdWords campaign for a client. I want to be very specific about the keywords I go for. So I used exact match, i.e. [keyword phrase]. Now I want to know, if a competitor is using broad match and pays a higher CPC then what I am paying on exact match, will the broad match be placed higher?
rustybrick, this could evolve into a long and complex answer if I let it, so I will try to be brief, and only hit the high points.

The short answer is: 'it depends'. The longer answer revolves around which advertiser's keyword has the better 'Rank Number'.

Basically, ad position is determined by two factors, measured equally. The two factors are your Maximum CPC as compared to your competitors, and your CTR as compared to your competitors.

Simply stated, position is determined by rank number, as defined by this formula:

Max CPC x CTR = Rank Number. (The higher the rank number, the higher the position.)

So whichever keyword variation has the highest rank number in the moment of the search will appear above the other.


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The reason I ask is because, when entering in the keywords in exact match form, they ask for the max cpc. So they use traffic estimator and tell you how much to bid. Most say 5 cents.
Quite often exact matches, because they are inherently more specific, may be cheaper to use than broad matches.

I can go into more detail later if you like - but hope this'll help for now.

AWR
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Old 08-28-2004   #3
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Thanks AWR,

I am hoping, that when you have time, if you can go into more detail. I do understand the Rank Number (I should have said that in my first post). However, I do not understand the following point.

Person A bids $2 on the keyword widget using broad-match.
Person B bids $1 on the keyword blue widget using exact match.

Will Person A rank above Person B for the term blue widget if the CTR is equal between A and B?

If so, then when looking at keywords to bid and what you should set your max bid at, you should look at the keyword widget and not the keyword blue widget. Correct? I know it gets more complex then this, so I am asking you to give me the detail.

Thanks again AWR!
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Old 08-30-2004   #4
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Rustybrick, as I reflect on your questions, I am not 100% sure I've understood what you are really asking.

It seems that maybe you're wondering if the AdWords system favors one type of match over another. If this is the case, then the answer is 'No'.

If two advertisers have used similar keywords - one as a broad match and the other as an exact match, and both ads are eligible to show for a user's search, then which ad shows first depends entirely on the rank number of each keyword. In other words, the exact match keyword is not given preference because is it more exact.

Looking at your example:

Quote:
Person A bids $2 on the keyword widget using broad-match.
Person B bids $1 on the keyword blue widget using exact match.

Will Person A rank above Person B for the term blue widget if the CTR is equal between A and B?
The answer is 'Yes', but not because of the match type. It is 'Yes', because both ads are eligible to show for the search, and Person A's keyword has the better rank number.

Let's say that both A and B had the same CTR of 2% (which, by the way, is extremely unlikely, because CTR it is constantly changing, and also calculated out to many decimal places.)

Person A bids $2 x 2% CTR, thus rank number = 4
Person B bids $1 X 2% CTR, thus rank number = 2

So, yes, A appears first.

Quote:
If so, then when looking at keywords to bid and what you should set your max bid at, you should look at the keyword widget and not the keyword blue widget. Correct?
This is the question I'm not really clear about. Can you clarify?

At the bottom line, I'd use the keyword that you think will bring you the best results. For example if you only have 'blue widgets' then 'blue widget' is probably a better keyword than 'widget' to use, since it will cause your ad too appear only for searches that match what you sell.

And be aware that both CPC and position are not fixed things. Both literally vary from click to click, depending on what the actual situation is in the moment of each click.

AWA

Last edited by AdWordsRep : 08-30-2004 at 09:18 PM. Reason: Fix typos!
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Old 08-30-2004   #5
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Thanks AWR - that answers my question.
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Old 08-30-2004   #6
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Interesting post... I thought there was another factoring for hitting the exact term...
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Old 08-31-2004   #7
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I guess there is an indirect factor for using exact match.

It is assumed that when using exact match, your CTR would be higher. Thus increasing your rank weight.

But I wonder, statistically, how valid this is in most cases.
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Old 08-31-2004   #8
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Quote:
Originally Posted by rustybrick
I guess there is an indirect factor for using exact match.

It is assumed that when using exact match, your CTR would be higher. Thus increasing your rank weight.

But I wonder, statistically, how valid this is in most cases.
The indirect factor might be that more ads have the key words in the title when they're running on exact match rather than broad match, which improve the ctr..
Cheers,
Johann
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Old 08-31-2004   #9
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Quote:
Originally Posted by webcertain
The indirect factor might be that more ads have the key words in the title when they're running on exact match rather than broad match, which improve the ctr..
Cheers,
Johann
Yea but when I set up ads to run, I use the syntax {KeyWord} so that the keyword they type in, is dynamically put in the title of the ads.
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Old 08-31-2004   #10
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I think the biggest factor that helps exact match click through rates is that most people do not heavily build up a negative keyword list and many words have a ton of meaning.

each completely irrelevant ad you show cuts down the effectiveness of the good ads that you are showing.
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Old 08-31-2004   #11
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For terms with significant traffic you may want to bid separately on broad match and exact match, depending on your bidding strategy, as the CTRs may divurge. There may also be differences in conversion rates between the two.
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Old 08-31-2004   #12
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Well, if we are talking about me (self-serving), I set my client up to only use "exact match" for now. I want to be very careful as to which keywords he should pay for. So your suggestion would be to up the CPC prices to match those of the broad matched words? I.e. increase the CPC to $2 from $1 for blue widget, because widget is going at $2 and no one is bidding on blue widget per-say.
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Old 08-31-2004   #13
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Maybe this is what you were thinking of, AussieWebmaster

Quote:
Interesting post... I thought there was another factoring for hitting the exact term...
AussieWebmaster, you may be remembering a nuance of what happens when the same phrase is used as both an exact match and a broad match keyword in the same account. (As opposed to being used in your account, and also in a competitors account.)

When this is the case, the impression is assigned to the closest match to the actual keyword that a user has searched on.

That probably makes no sense without an example. Thus, below, please find an example!

Say you have these keywords in your account:

polished granite widget
"polished granite widget"
[polished granite widget]

* If I search on the phrase 'polished granite widget', then the exact match gets the impression.

* If I search on the phrase 'polished granite widget desk set' then the phrase match gets the impression

* If I search on the phrase 'polished gray granite widget' then the broad match gets the impression.

Hope that make sense. If not I'll try again later in the day after the coffee has kicked in!

AWR
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Old 08-31-2004   #14
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Quote:
Originally Posted by AdWordsRep
Rustybrick, as I reflect on your questions, I am not 100% sure I've understood what you are really asking.

It seems that maybe you're wondering if the AdWords system favors one type of match over another. If this is the case, then the answer is 'No'.

If two advertisers have used similar keywords - one as a broad match and the other as an exact match, and both ads are eligible to show for a user's search, then which ad shows first depends entirely on the rank number of each keyword. In other words, the exact match keyword is not given preference because is it more exact.

Looking at your example:



The answer is 'Yes', but not because of the match type. It is 'Yes', because both ads are eligible to show for the search, and Person A's keyword has the better rank number.

Let's say that both A and B had the same CTR of 2% (which, by the way, is extremely unlikely, because CTR it is constantly changing, and also calculated out to many decimal places.)

Person A bids $2 x 2% CTR, thus rank number = 4
Person B bids $1 X 2% CTR, thus rank number = 2

So, yes, A appears first.



This is the question I'm not really clear about. Can you clarify?

At the bottom line, I'd use the keyword that you think will bring you the best results. For example if you only have 'blue widgets' then 'blue widget' is probably a better keyword than 'widget' to use, since it will cause your ad too appear only for searches that match what you sell.

And be aware that both CPC and position are not fixed things. Both literally vary from click to click, depending on what the actual situation is in the moment of each click.

AWA
AWA, this is actually a pretty important answer because it may reflect on some of the strategies that are touted as leading to higher ROI. I've never been one to favor massive generation of every conceivable phrase and then making them all exact match, because I don't necessarily see the advantage. But some will say that this is a good strategy.

Basically, in discussion with a vendor of a keyword-heavy technology/methodology, where they were trying to tell me that one could benefit from having all kinds of phrases with the specificity of, say [reserve hotel room in houston], I argued that the competition here wouldn't be lessened just because you had that exact phrase. Others using broad matches for houston hotel or just hotel would "butt in" and show up on the same page and be driving up the CPC's necessary to rank well.

On the off-chance that you're also creating enough different ads that your exact matching [reserve hotel room in houston] somehow creates a killer CTR on that phrase that the others can't keep up with by dint of their broad matching, you would have something of an advantage. Exactitude can improve CTR's, but it doesn't always improve them that much.

But this leads to another question. Since the exact phrase [reserve hotel room in houston] will never by typed in enough times to generate a "CTR track record," wouldn't the advertiser's CTR on that phrase come in at the default value of 1.0% or whatever it is, so if others are running at 2% then using the very exact match method might actually handicap one at first, until someone actually clicks on stuff?

It's complicated, isn't it?

Last edited by andrewgoodman : 08-31-2004 at 01:32 PM. Reason: Changed broad to exact (mistake)
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Old 08-31-2004   #15
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Andrew, are you offering a master program in AdWords. By the way, I preordered your book at Amazon. Back on topic...

I am amazed by some of what you (andrew) just said about the CTR being 1% for [exact match].

So how does an AdWords customer like me, who only wants to rank for let's say 10 exact matched keyword phrases do that?

I know [blue widget] doesn't get searches on that often, but when it does, i want to get a low CPC. Not the CPC that widget would drive.

I guess I am still confused and the CTR example Andrew provided makes it worse.
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Old 08-31-2004   #16
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The obvious is that there will generally be more people in the broad than the exact or qualified keyword... so closer will be up and the competition will be less
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Old 09-01-2004   #17
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how do you use the {syntax} tool?

Quote:
Yea but when I set up ads to run, I use the syntax {KeyWord} so that the keyword they type in, is dynamically put in the title of the ads.
Great thread. Just curious how you use the {syntax} tool. I've been using Adwords for a while now but never came across this option. Any other helpful hints?

BTW still just as confused about broad vs specific...ouch
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Old 09-01-2004   #18
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Great thread. Just curious how you use the {syntax} tool. I've been using Adwords for a while now but never came across this option. Any other helpful hints?
Hey SnakeDriver,

Just change the title of your ads to read {KeyWord}. Try it, and you'll understand when you see your add.

Jessica Stricchiola told us this in the Creating Compelling Ads & Landing Pages session at SES San Jose.
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Old 09-01-2004   #19
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Quote:
Originally Posted by rustybrick
Hey SnakeDriver,

Just change the title of your ads to read {KeyWord}. Try it, and you'll understand when you see your add.

Jessica Stricchiola told us this in the Creating Compelling Ads & Landing Pages session at SES San Jose.
Just remember to use {Keyword:ALTERNATIVE TITLE} just in case the keyword goes over 25 characters as the default the other way is to leave it blank!
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Old 09-01-2004   #20
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Quote:
Originally Posted by AussieWebmaster
Just remember to use {Keyword:ALTERNATIVE TITLE} just in case the keyword goes over 25 characters as the default the other way is to leave it blank!
Excellent advice, I did not know about that. Thank you.
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