Secret Truth Series #13: The Average Lie

Numbers look like facts even when they’re not.

To make the best possible PPC management decisions it’s important to know the difference between the numbers in your reports which represent something that has happened and those that are mearly clues that need more investigation before you can possibly know what they really mean.

PPC Reports Don’t Present Raw Data

With thousands of keywords and hundreds of thousands of clicks (or more) in each account every day, we should be glad that the search engines or our management platforms don’t try to show us the raw data behind our accounts. It would be too much to handle.

Instead what we see are lots of sums and averages.

  • The number of clicks on a keyword is the sum of all clicks from each individual search query that was matched to that keyword.
  • The number of clicks on any search query is the sum of all clicks from each geography or person.
  • CPC, position, revenue-per-click, and many others are averages – sometimes labeled as such and othertimes not. We’re never told the distribution of the data.

Look Behind The Sums

The first place we look when reviewing our paid search accounts is at campaign and ad group level performance data. Here every number is a sum or an average.

These reports can be very useful when we’ve come to know and trust the data behind these numbers. But it’s easy to mistakenly assume or presume that the summed numbers tell you something they don’t about the contents of any one group.

  • You can’t see when two data elements cancel each other out. For example, if one ad group surged by 50% while another fell by 50%, the campaign data can report a flat month-over-month number. You can miss important changes ‘inside’ the data.
  • You can’t see when one data element overwhelms the others. If an ad group shows a terrible ROI or CTR, there is no way to know that one or more keywords inside are hugely profitable or have fantastic CTRs. The good can overwhelm the bad, or visa versa.

When looking at campaign, ad group, and even keyword reports, of course you want to react to the numbers, watch their trends, and compare them to their peers. But make sure you know the numbers behind these numbers.

Before taking any action, dive in and look at the numbers underneath. You may not always have the time to make the necessary changes – so you may still need to take the broad action – but you may find that in the long run the change you had planned is not the right long term solution.

Don’t Believe The Averages

When AdWords tell us that a keyword had an average position of 3, it’s hard not to think and act as if it was ‘usually’ in position 3, or even that it was almost always at or near position 3.

But this may or may not be the case.

As Google Analytics shows, most keywords (their ads really) get placed in a very wide range of different positions and the average reported in the interface is just that – an average. The keyword you think about as having been in position 3 was probably seen by many people while in position 5 and seen by others in position 1.

Click To Zoom
This keyword was in positions as diverse as Top 1 and Left 6 during a 1 month period.

Averages without standard deviations – as someone used to tell me – are rather worthless.

The joke he told to illustrate was about a comedian told to prepare material for a birthday party where the average guest was 35 years old. As you might imagine, he included a little colorful language in the routine he had planned. Only to be shocked to arrive and find a birthday party filled with 3 year olds and their 73 year old grandparents.

Taking the distribution of the data that makes up the average into account is especially difficult when you don’t have access to it.

  • We see quality score reported for our keywords, without any way to find out the different quality scores earned across the different geographies where the associated ads were shown, or the impact of the different text ads that the keyword displayed.
  • We see CPC data for each keyword, without any way to find out the different CPCs that were actually charged for each different search query that was matched, or the impact of the quality score, geography, ad copy, etc. (Did you even know that CPC was an average too?)

Don’t Believe What You Read

The Boomtown Rats had it right. The numbers we get back in PPC reporting systems are not always what they appear. Teach yourself to view them a little skeptically, and definitely not conclusively. Analysis always has to follow data.

Sums and averages are necessary because we can’t usually handle raw data. My point isn’t that these reports aren’t useful or presented properly. But rather that it’s important to know what the data is and what it isn’t, and to know how to take the next step to learn more about any particular number that raises questions.

In many cases the numbers behind the numbers are just a click away. You just need the time and inclination to go look at them. In other cases, the engines still aren’t sharing enough details, and we all need to pressure the engines (with whom we spend so much money) to provide us with the data we need to make fully informed decisions.

What Do You Think?

This blog post is part of a series extending and amplifying the ideas in our free ebook ’21 Secret Truths of High-Resolution PPC’.

What they’re saying: “If your goal is to be the best you can be at paid search, then your path goes through this book. When Craig talks I listen, mesmerized. You should too because being wise is great!.”

– Avinash KaushikAuthor of Web Analytics 2.0 ’.

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