PPC Text Ads – Rotate Or Optimize?

When creating a new PPC campaign or ad group, there’s an important choice to make with your text ads. Should you set text ads to rotate evenly, or optimize their distribution according to what the search engine thinks is best? Before you choose, you should think about how each distribution is calculated, and how it will affect your data collection for optimization purposes.

First off, you should always be running two to three text ads per ad group. That way, you can test different value propositions in your ads to see which one works best. After a month or two goes by, you can then compare the total conversions, conversion rate, and click-through rates of your ads to find the top performer. If your ad groups tend to get a lot of traffic, run three ads to test multiple factors at once. If your ad groups are low-traffic niche groups, you may need to run only two ads at a time to ensure you collect enough data for a reliable sample.

Choosing rotated or optimized ads will also affect your data collection. Rotating ads is pretty straightforward – each ad gets equal exposure. Optimized ad serving is where it gets a little trickier. By setting your ads to optimized serving, you allow the search engines to choose which ad gets the most exposure, since they will choose the “best” ad after a certain amount of data is gathered, then allow that ad to run the majority of the time.

This may sound good on the surface, but you also need to keep in mind that the search engines will choose the “best” ad based on their own criteria. This probably means that they will choose the ad with the highest click-through rate, since more clicks equals more money for Google, Yahoo, or Microsoft. This may not be in your best interest. The ad with the highest CTR may also have the lowest conversion rate. You could be racking up click costs without seeing conversion results if you trust search engines to “optimize” your ad distribution.

Of course, this is not always the case. Sometimes optimization is on the mark, and you can have a decent performing ad group without the hassle of constantly rotating ads yourself. For advertisers that just want a “set it and forget it” solution, you’ll probably be okay with optimized ad serving. But, if you are a serious PPC marketer, you will need to run evenly-rotated ads for two reasons. First, having even rotation ensures that you will have a valid statistical sample at the end of your text ad experiment, since all ads in the group will have an equal chance to succeed. And second, choosing not to rely on the search engines lets you choose your own success metric. If you want to optimize for conversion rate, you can do that. If you want to optimize for CTR, that’s okay too. You don’t have to rely on a third party to tell you what your “best” ad is, since you will have a much better idea of what is successful for your own business.

Most of the time, I choose to set my new ad groups to rotate evenly. But then again, I’m a huge PPC geek who loves to split-test things. Think carefully about what optimizing or rotating your text ads means for your business before you make a commitment. Don’t blindly rely on a search engine to automatically do your PPC campaign optimization for you.

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+.
This entry was posted in Google AdWords, MSN AdCenter, PPC Basics, Text Ads, Yahoo Search Marketing and tagged , . Bookmark the permalink.

5 Responses to PPC Text Ads – Rotate Or Optimize?

  1. Pingback: Rory Sutherland: Life lessons from an ad man | Article Marketing Strategies

  2. Hi Shawn,

    Good analysis of the two types of text ad rotation settings. Like you, I am a fan of setting my ad groups to rotate evenly. I like to be in control of my ad rotation, not the search engines.

    One reason I do not like having my ads on the optimized setting is because it makes testing new ads tough. If I run a new ad in an ad group that utilizes the optimized setting it won’t be allowed the proper amount of time to be tested. This can especially be a problem if you are testing different calls to action (ie: one ad is pointing to a whitepaper download vs a webinar download).

  3. I always tell my clients to pick rotate, if they want to really want to optimize their PPC, and if they don’t care about their campaign and don’t care about conversion – then go for “optimize” setting.

    Frederik Trovatten
    http://www.twitter.com/trovatten

  4. Kristin says:

    I’m wondering how you handle this at the launch of new campaigns. Especially in the case of Google, when CTR is a huge part of determining quality score, couldn’t an argument be made that you’re helping yourself out by initially optimizing your ads? I need to actually do more testing on this point myself; I usually go back & forth when launching and I need to pick an option and stick with it. What do you think?

  5. Shawn says:

    That’s a great question, Kristin. Like you, I’m constantly baffled by the inscrutable whims of Google and afraid I’m going to trip up when starting a new PPC initiative. But think of it this way – when you’re just starting out with a new campaign, Google knows the future performance of the ads just about as well as you do. How could they “optimize” the ads without historical information to refer to?

    At least with even ad rotation, you can get a definitive answer about which ad is better. If both Ad A and Ad B have 100 clicks, and Ad A gets 10 conversions while Ad B only gets 2, you can be reasonably sure that Ad A is best. But if the ads are optimized, and Ad B only gets 20 clicks, while Ad A gets 100, it’s not so conclusive. Remember, the “optimization” that PPC providers offer is based primarily on CTR. They don’t have a vested interest in getting you more conversions – you’ll have to rely on your own analysis for that. Going the easy optimization route might save you some time and effort in the short term, but to get really outstanding PPC results you’ll need to do the extra work of rotating the ads evenly and doing the analysis yourself.