Grading The WordStream AdWords Performance Grader

Earlier this week, our friends at WordStream released a new tool to help diagnose problems with AdWords accounts. It’s called the WordStream AdWords Performance Grader, and it’s free to use. Click on through the link to try it out.

I’ve used the tool on a couple accounts that I manage, and so far I’m impressed with the results. It’s no magic bullet that will fix your account problems, but it could give you some valuable insight into areas where you can improve.

To get started, you need to provide your AdWords login details so that the tool can access your account. Don’t worry about security – WordStream is on the up and up and they won’t do anything worse than send you the occasional newsletter. Once you enter this information, the tool will access your account, analyze the contents, and compare it to the other AdWords account it has analyzed to give you a relative comparison of how you’re doing. This methodology means that the analysis will only be as good as the total number of accounts that have already been analyzed. But, WordStream already entered thousands of accounts prior to the launch of this tool, so you should get a fairly decent comparison right away. This will get better as more advertisers use the tool.

The first thing you’ll see is a breakdown of your current campaign stats – total active campaigns, total conversions, traffic metrics, etc. Nothing you don’t already know (or should know, anyway). The fun stuff starts with your “wasted spend” analysis:

Performance Grader - Wasted Spend

This analysis counts the number of negative keywords you have created in the last 90 days and estimates how much money you could save by adding additional negative keywords every month. While I applaud the spirit of this analysis, you should probably take the cost number with a grain of salt. It is possible to have too many negative keywords as well as too few. But, if this analysis helps remind you that you haven’t done a search query analysis in a while and added some new negatives, then it has done its job right.

Next up is the Quality Score analysis:

Performance Grader - Quality Score

I like this one because it saves you the trouble of exporting your quality score metrics into an Excel spreadsheet and creating a chart. Instead, you can get a presentation-ready graph (with competition metrics!) right away. You probably want to be a little skeptical about the cost savings metrics here as well – treat them like an estimate instead of a concrete dollar amount.

Your impression share report is next:

Performance Grader - Impression Share

You can already get this information out of AdWords, so there’s nothing new here except getting an eye on how you stand in comparison to your competition. Let’s move on to the CTR analysis:

Performance Grader - CTR

This report gives you a pretty good overview of your CTR and average position. However, there are a few drawbacks. For one, the report is limited to your top 200 keywords. That’s not too thrilling if you have tens of thousands of long-tail keywords in your account. Secondly, your CTR analysis could be thrown off by including brand keywords. If you’re bidding on these, you’ll probably have a high search volume and CTR on them anyway, so hover your mouse over the green dots to make sure you’re not giving too much weight to brand keywords in the analysis.

The account activity report is next:

Performance Grader - Account Activity

If you’re active enough to run the Performance Grader analysis, you’re probably active enough in your account. So don’t feel like you need to change stuff every day, but it’s still good to log into your account at least once a week to see if anything needs attention.

Next in line is the long-tail keyword optimization report:

Performance Grader - Long Tail

This report shows the ratio of long-tail keywords (defined as keywords with 3 or more words in the phrase) to your total account keywords. You should probably have a very low percentage of one-word keywords (these are usually too broad, and too expensive to compete in), a moderate amount of two-word phrases, and lots of long-tails. This report could be a wake-up call to tell you you’ve been slacking on your long-tail keyword research.

Moving on to the text ad report…

Performance Grader - Text Ads

This section counts up your total text ads, gives you the average number of text ads per group, and gives you an example of your best and worst performing ads. From what I’ve seen, pretty much every competitor is running an average of 2-3 ads per group – a well-known best practice. It’s nice to see the best and worst ads, but since it’s a very small sample (of two) and based on CTR rather than conversion rate, I wouldn’t put too much stock into it.

The last section is on landing page optimization:

Performance Grader - LPO

The coolest part of this section is looking at the competitor average number of landing pages. A lot of advertisers are using dynamic or keyword-inserted URLs to create unique landing pages for each campaign or ad group, so you might be in for a shock if you’ve been sending traffic to a handful of pages. Unfortunately, this report doesn’t offer much insight on the quality of your landing page’s content – only performance stats and account averages. You’ll have to look at each landing page on your own to determine the flaws.

Overall, I think this tool is a valuable addition to any competitive analysis of PPC. Plus, it will help you get a broad overview of account performance to help you diagnose structural problems in your account. However, it won’t do much to help you fix the minutiae of your account – specific keywords and ads that might be disproportionately causing problems. No tool is going to give you an out from doing precise, detailed analysis of your account. But at least the WordStream AdWords Performance Grader will give you a good idea of where to start looking for ways to improve.

About Shawn Livengood

Shawn Livengood is a search engine marketing professional based in Austin, Texas. He has extensive experience managing pay-per-click ad campaigns for clients in various industries, from small home-based businesses to large international companies. You can connect with Shawn on Google+.
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One Response to Grading The WordStream AdWords Performance Grader

  1. Angelo says:

    Don’t worry about giving up your account login? I highly doubt the concern is with them changing your account. The concern is them seeing the ROI for all your ads and keywords. There’s a reason the tool is free. They want access to all that info so they can sell it to people later on.