Podcast 12 – Using Google Analytics for Google AdWords

Show Notes:

Nick Iyengar lead the Google Analytics “Guru Team” at Google in Mountainview, and before that, managed tens of millions of dollars of AdWords spend consulting with Google’s biggest customers.

Now he consults with Cardinal Path, one of the largest Analytics companies in the world. Having been both inside the big Googzilla and now an external consultant, it gives him a very interesting perspective. 

So who better than to talk about how to get great insights from Google Analytics to turbo charge your AdWords campaigns? 

He shares some very smart strategies. So listen in.

You can connect with him @AnalyticsNick or read more about Cardinal Path.

 

If you prefer to read:

Phillip: Welcome to another episode of the online marketing secrets podcast where we interview the world’s leading experts in online marketing.  I’ve got an awesome guest today, Nick Iyengar.

He’s an ex-Googler, he currently is a Senior Consultant with Cardinal Path which I believe is one of the largest analytics companies in the world.

At Google he was in charge of managing tens of millions of dollars of Adwords spend within that team and I think was also leading it to the analytics guru team which we’ll find out what that is. So welcome very much Nick.

Nick:    Thanks a lot for having me.

Philip:  What was your role at Google?

Nick:    Well it’s like you said I started out doing Adwords, Adwords sales so working with clients in the Tech B2C vertical, consumer electronics and peripherals and those sorts of clients.

So like you mentioned just a lot of the big established advertisers that Google has got an ongoing relationship with.  So I was selling into those clients for a couple of years and then as you might expect being someone that was kind of neck deep in Adwords, I started to get some exposure to the analytics world and decided that was really where my passion is.

So I worked at that for a while and I managed one of the Google Analytics support teams in the Mountain View office which is the headquarters.   So that’s what I did at Google, I officially managed that Google analytics support team which was responsible for doing things like technical support but also for doing some consulting engagements with some of the biggest advertisers in the Adwords world.

Philip:  Nice, nice, and what do you do these days?

Nick:    These days I’m doing some of the same but also a lot of new stuff so probably my biggest responsibility is – I do a lot of custom Google Analytics implementation for enterprise type organizations.

Google analytics, the tracking code that you use to set up Google Analytics, has kind of a vanilla form that you can get directly from Google but it’s just Java script so anything that you can customize with Java script you can essentially make Google Analytics do.

So we work with kind of the bigger organizations that maybe have some needs that are more sophisticated than what the standard Google Analytics tracking will do.  Then we provide a custom implementation for those kinds of organizations.

Philip:  Okay.  Nick and I met at GAUGE which is a Google Analytics User Conference in New York and you had a pretty awesome session on Google Analytics for Adwords which is what we’re going to speak about today.

I thought you were a fantastic speaker, you had a great energy and you clearly know your stuff inside out.  So today we’re going to talk about just what are the insights we can get from Analytics in regards to Google Adwords.

But before we move on to that, there’s a skill that you have that’s probably more highly valued I think if I look at all the other guests you have which is worth mentioning the fact that you brew your own beer.

Nick:   Yeah I was going to say it’s a niche hobby but one that I enjoy.

Philip:  Is that because the U.S. have such terrible beers like Budweiser that you have to brew your own?

Nick:    Well now that’s…I don’t want to steer the podcast outside of the scope here.

No I think that’s part of it, the micro brewing and craft brewing culture in the United States really grew out of the fact that what we call the macro brews like Miller and Coors had essentially driven out all the competition and so there was really sort of this joint monopoly between just a few companies producing some pretty watery tasteless beer.

So yeah, the home brewing movement is strong, I’m a very small part of it but absolutely, I probably spend too much of my free time thinking about and consuming beer.

Philip:  I guess – yeah there are a lot of people that think about and consume it but I haven’t got to make my own yet.  What’s your favourite?  Ale, wheat or what?

Nick:   Yeah, I like some of the hoppier beers, it’s very common here in the West Coast in the United States, the IPA’s and ESB’s are really popular.  I like something that’s got pretty robust flavour profile and try to stay away from kind of the lighter beers but at the end of the day, if it’s a cold beer, you can’t go too far wrong.

Philip: I had a Belgium beer the other day in one of the Belgium beer café’s in Sydney which was – I think it was 11% alcohol.

Nick:    Yeah that’s a good sign.

Philip:   I just found that over the top for me.

Nick:    Way too much.

Philip:  Anyway, we’re getting a little side tracked here but maybe we can have a podcast just dedicated to home brewing, online marketing and home brewing together.  Awesome, so let’s  get into the topic.

So we’re going to talk about analytics for Adwords so let’s start at the very top.  I think maybe some business owners or PPC managers think well, there’s so much data already inside the Adwords console.

You got your click through rates, impression share, quality scores, CPC’s, I mean you’ve got more KPI’s than you can poke a stick at.  Why do we want to look into Analytics as well and give us the main benefit?

Nick:    Sure well I think it really goes down to the root of why you should measure anything from your business reflective and it’s that the data points that you get in the Adwords console, your clicks and impressions, quality score, they don’t speak to business outcomes and that’s where you need an analytics tool like a Google Analytics or something else.

If you want to be able to measure things like eCommerce or generating leads or file downloads or whatever it is that your business cares about for your online presence, for the most part you’re going to need a more robust tool like Google Analytics to be able to measure all of those goals.

Philip:  Right, so we can import those goals from Analytics into Adwords, right, so I guess you get a part of it.  You can see what’s called a conversion in the Adwords console. You can either set that up independently or you can import your Analytics goals.

Nick:    Sure, there is sort of a very rudimentary ability to track some of those conversions as you said in the Adwords console but there are a lot of really important questions that you just can’t answer in Adwords and that’s why Google Analytics is so important to use in junction with your Adwords campaign.

I’ll give you just a couple of examples.  If I asked you what’s the bounce rate for your biggest campaign meaning what’s the percentage of folks that come into your website and then leave right away.  You just simply can’t find that anywhere in the Adwords console.

Philip:  Agreed

Nick:    Just to give you another example if I asked you how many people – let’s say the conversion was to check out of a shopping cart.  If I asked you not just how many conversions you had but how many people reached the last step in the shopping cart but then didn’t check out for some reason.

That’s not a number that you can get from Adwords either and so being able to do even a bit more sophisticated kind of analysis really requires that you go beyond just the scope of what you can see there in the Adwords console.

Philip:  Agreed.  Hopefully by the end of this podcast listeners will feel the same way.

Nick:    Yeah I hope so, there’s plenty to look at so we should jump right in.

Philip:  Yeah let’s do it.  So do you see – before we get into it – do you see more integration between Adwords and Analytics?  Do you think that Adwords is going to start sucking in more data so you can manage it in one console?

Nick:   Yeah absolutely, I think Google is really on a mission to help its advertisers manage their spend wisely and the reason for that is as a lot of people know Google’s revenue stream is almost entirely dependant on the Adwords platform meaning that they are dependant on their advertisers and what they find is the more successful their advertisers are the more reinvestment there is into the Adwords system.

What they have also found is people that use Google Analytics in conjunction with Google Adwords have vastly more success.  They have much longer life cycles in term of how long their campaigns stay active, they spend a lot more money, so for all those reasons they really want to equip their Adwords advertisers with the tools they need to again really manage their ad spend wisely.  So Google analytics is going to be an ever increasing part of that I really think.

Philip: That’s the business case that Google probably presented at one of their acquisitions wasn’t it when they took over Urchin, that’s exactly the reason they did it.

Nick:    I would have to imagine so and that’s one of the reasons that Google Analytics has been free for so long and they’ve added so much sort of horse power to the tool.  It does so much more than it used to and yet it’s still free and the reason for that is by giving it away they really recoup a lot of that revenue through kind of indirect Adwords spend.

Philip: Great so let’s – can you talk briefly about how we get the data? How we get your Adwords and Analytics accounts speaking to each other?

Nick:    Absolutely, common issues that you may have in Adwords account created with campaigns running, you may also have a Google Analytics account that you set up/installed with your website but they don’t necessarily always talk to each other right from the get go and this are a couple of reasons for that having to do with things like  account preferences and settings.

What we want to do though is make sure that your Adwords account is linked to your Google Analytics account.  So the first thing you’re going to want to do is and this is really important across really all of your Google services is to try to use the same email and password as your login credential for both Adwords and Google Analytics.

For example if I’m using Nick@gmail.com to manage my Adwords account I really should use nick@gmail.com to log into my Google Analytics as well because that’s how Google knows that both of these accounts belong to me.  So that’s the first step.  Once you’ve done that, it’s as simple as just a few mouse clicks so what you’ll want to do is log into your Adwords account and in the Adwords account you’ve got the Reporting and Tools Area.

Inside there you can click on Google Analytics and once you’ve clicked on Google Analytics again from inside your Adwords account, if you’re accounts aren’t linked, you’ll be prompted with a check box that says, “Do you want to link your Google Analytics account?”

And so again, just a few mouse clicks can get you there but if you – for example if you go into your Google Analytics account and you can’t find any data about your Adwords campaign, that would be the issue.

Philip:   Excellent.  And can you talk about the Auto Tagging?

Nick:   Absolutely, so the other sort of important ingredient in terms of making sure that all of your data shows up cleanly and properly on the Google Analytics side is making sure that you have an Adwords feature called Auto Tagging enabled.

Now that’s a setting that’s enabled by default, so if you don’t have that turned on, it means that you or someone on your team may have gone in there and turned it off for some reason in the past.  But to turn it back on again is very, very easy.

What you’re going to do is go to the “My Account” area in the Adwords account and go under your Account Preferences and there’ll be a check box there for Auto Tagging.  What you want to do is make sure that Auto Tagging is enabled.

Philip:  Right, that’s a good summary.  So let’s get into the Google Analytics console itself.  For listeners of the podcast it may be helpful depending on where you are to actually log into your Analytics console on your own and then follow along there, may be a little bit easier.

Nick, so can you start off with  may be an overview of the key areas where you would find data relating to Adwords and then we can build down into those areas afterwards.

Nick:    Sure.  The main area where you’re going to find all of your Adwords data, if you’re familiar with that sort of left hand navigation tree inside Google Analytics, you’ll notice that there’s a blue area that says “Advertising” and  If you open up that drop down box you’ll notice an entire series of reports related to your Adwords.

Now it’s important to mention that we’re looking at the new version of Google Analytics which has been around for several months but if you haven’t tried it out, I’d recommend it.  You can click “New Version” at the top of your Google Analytics screen and you’ll be able to follow along with the interface that we’re looking at today.

But again, in the blue area on the left hand navigation where it says “Advertising”.  You just want to open that up and you’ll see again an entire series of reports dedicated to your Adwords campaign.

Philip:  Excellent.  And the area under Traffic Sources as well?

Nick:   That’s right.  So, under Traffic Sources which is the next sort of main category down in the left hand navigation.  You’ve also got some reports there, so for example there’s the All Traffic report.

If you wanted to compare how your Adwords campaigns are performing let’s say against your organic searches from Google or your email marketing or other search engines, the All Traffic report because it contains all of your traffic makes it very easy to see Adwords not so much in a vacuum but really in the context of all of your other kinds of traffic.

Philip:  Excellent.  And I think the third key area is if you want to do Advance Segments where you actually create an Advance Segment just on your Adwords traffic and then move around all the different reports and see all the different metric just relating to Adwords and maybe we’ll touch on that last.

Nick:    Sure, absolutely.

Philip:  So is it worthwhile getting maybe because the smaller area within Traffic Sources once we click into Search and into Paid, there’s some data in there.  Should we maybe get that out of the way and then spend most of the time talking about the advertising sub menu.

Nick:    Yeah, that sounds good.

Philip:  So what sort of – maybe we can just sort drill down briefly into the sources you techs use yeah sort of get stuck in, maybe just give an indication of what data is available in there that’s not in the advertising sub menu.

Nick:   Sure.  When you’re in Traffic Sources, you’re going to notice there’s another subfolder called Sources and then another sub folder called Search.

So you’re going to have to drill down a few levels there to find what’s called the Paid Search report and really the only difference here is that the Paid Search report is going to encompass not only your Google Adwords traffic but any other paid search that you’ve told Google Analytics that you are doing.

So for example if you’re doing some paid search with Yahoo or with Bing then you’ll be able to kind of analyze all of that at a high level and feed it all together as paid search.  So this is for folks that want to analyze paid search as a whole as opposed to just specifically looking at their Google Adwords campaigns.

In terms of the data that’s available, it’s a bit less specific and there are some reasons for that but the main thing that you won’t see in the paid search report is you won’t see data that’s imported from your Google Analytics account.  Things like your click through rate, your number of impressions, the number of clicks and all those good metrics that really help get a detailed picture of Adwords.  So I’d say the Paid Search report is really where you want to focus when it’s time to optimize your Yahoo and Bing and any other search engines that you are doing, that the paid search are doing with them.

Philip: Excellent.  So if you are just doing Google Adwords and I guess to most Australian listeners, Google is really the only search engine here.  If you are just doing Google Adwords you don’t really need to look into this category of reports.  You can go straight to the advertising sub menu.

Nick:    Absolutely.  I think that’s definitely a fair point.  So again there’s nothing in here that you can’t get in the advertising section if you’re trying to analyze your Adwords campaign.  So this is really just for the other search engines.

Philip:  And I think we were talking about the linking of the accounts to get that to link properly is very important and if you haven’t linked properly this is where you can actually see under the search sub menu, you won’t see the differentiation between organic and paid, is that right?

Nick:  That’s right, so, a lot of the data that you end up seeing inside of Google Analytics is subject to how you’ve configured the tool and a big part of configuring Google Analytics properly is again making sure that you have it linked to your Adwords account and so when you link your Adwords account to your analytics account, that’s how Google is able to tell that a certain visitor is coming in from a paid search as opposed to an organic or a natural search.

Philip:  Beautiful, alrighty, so it looks like we can spend the rest of the time talking about actual advertising sub menu so that’s the second sub menu down on the left hand side below audience.  Do you want to give it a little bit of an overview?

Nick:    Absolutely.

Philip:  What’s your favourite things in there?

Nick:   Definitely.  So the advertising section here where all the Adwords reports live.  I mean this is really the meat and potatoes of the reports that Google is giving you in order to be able to analyze how your Adwords campaigns are performing.

You’ll notice if you’ve been using Google Analytics for a long time that there are more and more reports in here and it certainly I’d expect these to grow even into the future but the first thing you’ll see in that menu under “advertising” and called the “campaigns report”.

And this is one – it’s sort of a simple report but actually one where I spend really a lot of time.  So if you’ve got an Adwords campaign running and you’ve got it hooked up to Google Analytics, you can certainly follow along here.  But again in the Campaigns Report what you’re going to see is very similar to what you see in the Adwords console.  You’re going to see a list of all your campaigns but then you’re going to start to see how those campaigns are performing on your website.

That seems like a silly thing to focus on but that’s a huge differentiator between what you see in the Adwords console and what you see in the Analytics console.  So take a step back and kind of highlight that.  In the Adwords console all you can see is how the campaign performs on Google, how many impressions were there and what was the average position of your ads, what was your click through rate and your quality score.  Those are all really important.

What Google Analytics now is going to show you is how did those campaigns perform once the person arrived on your website.  So you’re going to see how many visits you had, you’re going to see how much time the user spent on your website, you’re going to see what the bounce rate was and then, again, most critically you’re going to be able to start evaluating those business outcomes.

Philip:  Excellent.  So is the business owner or marketing manager obviously I guess everybody these days is really short on time.  Do you feel that your time is better spent inside the Analytics console because you’ve got all your metrics from Adwords itself and you’ve got all these additional metrics you were just speaking about.  Do you do most of your work inside Analytics and if you do make changes, go back to Adwords?  Is that too much of a generalization?

Nick:   No I think that’s exactly what I do and I think the main reason for that is once you’ve started to analyze and measure your Adwords campaign with Google Analytics you’ll never feel that the Adwords console is really sufficient in terms of answering your questions and providing you with the metrics that you need.

It’s a bit too simple really.  Once you’re used to using Google Analytics you won’t go back and so I think the Adwords console really becomes just a place where you log in to actually execute some changes that you discovered that you need to make but in terms in measuring maybe where your soft spots are, where there’s some optimization opportunities, I really think that all that should happen on the Google Analytics side.

Philip:  Excellent.  Let’s bring it to life a little bit.  Let’s think of maybe a professional service or consulting or services oriented firm, maybe a law firm with offices around a country, their website has an enquiry form, maybe some downloads of white papers, etc.  What sort of reports do you think they could look at to work out how well their website is working or not?

Nick:   Well I think from an Adwords perspective, you want to start with this report here, the Campaigns Report which is the first one in this section because what it will do is give you a really good overview.  It’s going to tell you exactly what you are spending on Adwords and it’s going to tell you what you are getting back.

So it’s going to give you all the components of ROI, right, it’s going to give you the “R”, the Return and it’s going to give you the “I”, the Investment which makes it actually very easy and sort of unambiguous in terms of finding out are these different Adwords campaigns that I’m running actually working for me, are they profitable or are they not.

And so in your example here with anyone that’s sort of a services firm, I would imagine the key real conversion point on the website would be basically lead generation, filling out some kind of Contact Us form or Quote Request or something to that effect.

So what you’ll want to do is take a look at what percentage let’s say, what percentage of the visitors who come to your website from each campaign are actually converting on that form.

But from there what you can start to do then, one of the things I like about the Campaigns Report is it’s going to let you drill down and so at the account level or at the individual campaign level, those kind of metrics like conversion rates are very useful of course but where you really get the sort of the optimization benefit, where you really get the actionable insight is when you start drilling down away from the aggregate level and down to looking at the individual keywords that you are bidding on in the Adwords system and so what you may find is that you’ve got a hundred or even many hundreds of keywords that potentially you are bidding on and what you’ll find if you are like most businesses is that some of them are working really well for you already and you’re going to find some what I call bleeders, ones that you’re spending a lot of money but they’re not really doing anything for you in terms of outcomes and so what you want to be able to do is understand right down to the individual keyword level, where am I spending my money and are those the keywords that really bring me the most return.

Once you know that, you can start to have a lot of the actionable next steps like adding new keywords or pausing some keywords or adding some negative keywords or changing your bid prices.  A whole world of options sort of opens up once you know how all your different keywords are performing for you.

Philip: Great summary.  And I take it when you’re talking about return on investment and specially for lead gen forms, the beginning of any advertising you are doing and you should address this before you go live with your Adwords campaign is how much is a lead actually worth to you and I found with a lot of businesses that we start working with don’t know that and so maybe you can talk a little bit about that.

Nick:   Absolutely, so we’ll just stick with this example, the idea that you want to gain business by generating leads through your website.  So I think there are a few different things that you need to know.

The first thing you need to know is how many – well, let’s back up a bit.  The real question I think is what is a lead worth to you.  I think that’s the question because when the lead becomes a customer, it’s going to happen offline, it’s going to be outside the scope of what Google Analytics can measure and so you’re going to know what a paying customer is worth to you.

What you need to figure out is how much one lead worth.  Because that’s the conversion point, that’s the prism through which you’re going to evaluate your ad spend online.  So let’s say you know that in order to get one paying customer, you need ten leads, your sales team can then close ten per cent of those leads.

It’s a simple example.  If you also know that one paying customer is worth a $100 to you, you can then sort of back out and extrapolate what an individual lead is worth to you.  So again, if you know that your sales team will close 10% of the leads that come in through your website and that one paying customer is worth a $100 what you then know is that the individual lead itself is worth $10.  Does that make sense?

Philip: Absolutely and I think that that’s probably one of the most valuable things to do as a business if you are advertising, well, any type of advertising, is understand that what you are prepared to pay for a lead.

A lot of business owners I find, or marketing managers don’t actually know that and that’s really powerful information because once you’ve got that, it’s great.  If you pay $50 bucks a lead, that’s your starting point, that’s great.

Once you know that you can look at, as Nick was saying, down to the keyword level what the actual return or the ROI per keyword is and once you have that, that’s just awesome.  If you’ve got a keyword that’s delivering leads at $10 a lead, that’s awesome and you’ll break even at $50, that’s great, why wouldn’t you take a million of them.

Nick:    Absolutely, I think the main point here is that Google Analytics can’t tell you what’s good or bad, it can just give you data.  So if it’s telling you that the average lead is going to cost you $25, is that good or bad?

It’s hard to say, you have to know what your break even point is.  So if your break even point is $5 then it’s not very good but if your breakeven point is $500 then it’s great.  It’s a simple thought exercise but really taking the time to actually quantify what a lead is worth to you online will really help you get a really good handle on this sort of campaign by campaign or even that keyword by keyword evaluation of your performance.

Philip:  And it is just a rough calculation isn’t it because specially for service type businesses, you’ve got a whole range of different pricing.  One customer may spend $1000 bucks, one customer may spend $10,000 bucks but you do need to get to some sort of average.

Nick:    Absolutely and there are a lot of different ways that you can get around this.  For those of us that are eCommerce type businesses, it’s really easy because Google Analytics actually will just tell you in dollars and cents  what your revenue was for any given timeframe.

But if you have multiple different services with different pricing and that sort of thing, one of the things you might want to look at is breaking up your campaigns along the lines of your different services.

So for example if you’ve got all kinds of different leads for different services that you are trying to generate, have a different campaign for every service.  That way you’ll be able to calculate sort of a cost per lead for each campaign but then you’ll also be able to go back and say well I know that a lead for a different kind of service may not be worth exactly the same amount.

By kind of organizing your campaign that way or organizing your entire Adwords account I should say, you are still able to deal with the fact that you might have actually different break even points for different kinds of leads.

Philip: That’s a good point.  So let’s say we’re drilling into this keyword report which is the second report down within the Adwords reporting and we now have a lot of data over maybe three months of historical data and we can see as you said lot of keywords, well, generally a smaller portion of your keywords that are actually generating goals and you’ve got maybe 80% of your keywords are not generating goals at all.  How would you then start managing the keywords that are not generating goals?  What sort of metrics would you look at?

Nick:   That’s a great question, I think a lot of times the instinct when you find out for example that you have a whole set of keywords that really aren’t producing a lot of tangible return, the initial instinct is to turn off that campaign or to turn off those individual keywords and just kind of shut off the valve but I sort of look at that as kind of giving up.

A lot of times those keywords or at least some of those keywords could work for you perhaps if you were using them a different way.  So one of the – I think the first thing you’ve got to look at is what is the actual ad that you are serving up when someone has searched for that keyword.

One of the things you need to make sure is that the ad itself is really closely tied and highly relevant to the keyword and so a lot of times specially with folks that are less experienced with the Adwords account you may see actually poor performance on a whole set of keywords but it doesn’t mean that those keywords could never work for you.  It just means they don’t work for you right now.

So I think Step One is understanding what kind of ad am I serving back to the user on Google when they’ve actually searched for a given term.  So you’ve really got to sort of think critically and be a bit tough on yourself in terms of asking yourself is this really a highly relevant advertising experience given what the user just searched for.

Philip: And if you are a service based business clearly you could be getting many leads or many more leads even through the telephone call and the telephone call is not being tracked within these reports.  Any comments around that?

Nick:   Well I think it’s a good point.  I think one of the things that’s sort of inherently a limitation about any kind of online analytics tools is that it really only tracks what happens on your website.  Now there are all kinds of ways that you can do things like serve back different telephone numbers on your website for people that come in through Adwords.

There’s ways you can get around that, it’s a little bit more advanced but you certainly actually you can if you want to make the investment you can track phone calls actually back to your Adwords campaign as well.

I think the larger point there is to keep in mind if an offline contact process like a phone call or a walk-in to a store, let’s say, is an important segment of your conversions, you want to keep in mind that your Adwords campaign reports will always kind of underestimate what your campaigns are doing for you because Google Analytics will not give you a report that tells you this campaign costs ten people to walk into your store the next day.  It is not quite there yet.

Philip:  Alrighty, so let’s dig in a bit deeper to the keyword report and I know you have some pretty cool analytics ninja techniques around secondary dimension and changing the actual view on that keyword report.

Nick:    Absolutely, I think for those of you out there that have used the Google Analytics tool for a while you probably notice that most of the reports that Google Analytics spits out at you are what we call data puke.

They are basically sort of an Excel spreadsheet that lives in Google Analytics and so one of the things that you may want to do to get sort of a more visual presentation of your keyword data is to change the view.

So by default you’re in what’s called the Table View. One of the new features in Google Analytics that I like quite a bit is called a Word Cloud.  If you’re looking at the keywords report, in the Adwords section, you’ll notice that you’ve got this table where you see all of your keywords and then you’ve got your visits and your bounce rates.

Up at the top of that table sort of beneath the line graph but at the top of the data table, you’ll see a drop down box that’s called “View” and if you open that up you can choose the option that’s called Term Cloud.  A Term Cloud is basically a visual representation of keyword level data.

What it will do is it will actually generate this image of all of your keywords where the keywords that bring you the most traffic let’s say will then show up in the biggest font and the keywords that bring you less traffic will be smaller.

So again you get this nice sort of visual representation of which keywords bring you the most traffic.  A really simple technique that I like to use is to then change the metric that I’m using to produce the Term Cloud.  So by default this Term Cloud is generated based on visits meaning how much traffic do these keywords bring.

One of the really simple things to do is change that metric around to something like your goals or if you are an eCommerce person your revenue and see which keywords now show up as being the biggest ones because in theory you really should see the same keywords but in reality often times we don’t.

So this gives you a really nice revisual way of understanding – are the keywords I’m getting the most traffic from and therefore spending the most money on are actually also the same keywords that bring me the greatest return.  And I think the Term Cloud, it’s sort of an unorthodox type of report for Google Analytics but I think it really just makes those insights just jump off the page at you a bit.

Philip:  Nice.  And can you use the advanced filter on that table on that Term Cloud as well because I guess like many clients if you’re advertising on your brand name you may see a lot of huge amount of revenue for example on your branded term which is very common.  Can you use the Advance Filter to exclude those terms?

Nick:    Absolutely, and that’s a great point.  If you’re doing things like running some Adwords on your brand terms you’ll probably find that you have a high conversion rate or high revenue if you’re an eCommerce person.

On the one hand that’s good but on the other hand you shouldn’t pat yourself on the back too much because that’s what you should be doing.  So a lot of times what you want to look at is how are you doing on your non branded or what I call just your generic searches.

So things like products or services as opposed to your brand name.  What you’ll notice is that there is a search box with a magnifying glass on it at the top of the table where you can actually look for a certain subset of your keywords.

So if you want to exclude a certain group of your keywords you can click the blue link next to the magnifying glass that says advanced.  When you do that you’re going to be able to actually exclude a whole set of keywords.

Let’s just say for example you are the Acme Corporation.  If you want to get this keyword report but actually look at it with all of your brand terms filtered out you can use this advance filter to exclude any keyword that contains let’s say Acme and when you hit the apply button on this filter your report will just refresh for you in real time and what it will do is now show you all of your data but it’s going to have removed all of the keywords that were around your brand name.

What that may do is actually paint a very different picture about things like your bounce rate or your conversion rate because often times those non branded generic keywords don’t tend to perform quite as well.

Philip:  Excellent.  I think you raised a really good point about brand versus non brand.  Often we see companies or clients targeting their branded terms within the same campaign and then look at an overall ROI or Cost Per Conversion on that entire campaign which includes the branded stuff and as you said your branded stuff is just – you’re going to get phenomenal returns on your branded campaign and that you shouldn’t let that dilute the overall return you’re getting on the non branded stuff.  So I encourage listeners to always separate branded and nonbranded into separate campaigns.

Nick:    Yes and the Advanced Filter is a really great way to do that just in about two seconds.

Philip:  Beautiful.  So now these keywords that we’re looking at, are these the keywords that are actually we’re bidding on in Adwords.  Are these the actual keywords that the prospect is searching on?

Nick:    That’s a great question.  What you see in the keywords report is a list of the actual terms that you are bidding on inside your campaigns.  What you may want to look at though is actually what are the specific search queries that someone is actually typing in in their raw form into the Google search and so the next report down which you’ll see in the list of reports is called matched search queries which is kind of a mouthful of what Google is getting at here is as opposed to showing you your data broken down by which keywords you basically thought you were buying.

What they now show you is well, which keywords are you actually getting traffic from in the sense that these are the raw queries that the user has typed in.  So often times you’ll see many of the same things but because of things like Broad Match and Phrase Match, the different matching options that you have in the Adwords campaign you may actually see search queries that do not exactly match the keywords that you are buying.

To give you a good example – let’s see, let me think of one.  Let’s say you’re a book store and you only sell new books.  You don’t sell any used books.  Presumably when you set up your campaign you wouldn’t have bought any keywords that include things like used books but because of Google’s matching technology and personalized search and all kinds of factors that impact which ad will show up at a given moment, it’s possible that you’re getting some traffic without knowing it from people that are actually looking for used books.

You wouldn’t see that in the keywords report because you’re not buying the keyword “used books”.  But in the match search queries report you’d be able to see whether or not you’re getting that kind of traffic that you don’t actually want and if you are, what you’re able to do is understand how much money you spent on it and then you can do things like add negative keywords to your campaigns to make sure you don’t keep spending that money in the future.

Philip:  This is if you’re advertising in Adwords and you are using a broad match on a lot of your keywords you will be blown away by the sort of stuff that’s coming up in this report.

Nick:   Absolutely.  I think this is one of the kind of – it’s nearly where Google’s got much more transparent about how their system works and yet at the same time a lot of people still don’t know about broad match and about how the keywords they are buying are not necessarily the only terms that they are spending money on and so if you’ve never looked at the match search queries reports, all you folks out there that may be are newer to this, this can be one of the best money saving reports in Google Analytics and really one that it’s very easy to take action based on the insight that you get from this report.

So again, what you’re looking for in the match search queries report is what kinds of terms are people searching for that may be aren’t as relevant to my business but you’re still getting traffic on them.  Those are the ones that you want to add to a negative keyword list in your Adwords campaigns to make sure that in the future when people are searching for those kinds of terms you won’t be spending any more money to get those people to your website.

Philip:  Let’s move on to the Secondary Dimensions.  Can you explain what that is and why we use it?

Nick:    Absolutely, so Secondary Dimensions in Google Analytics let’s you do some segmentation of your data.  For example just to start off with a basic example, you may be looking at a report that shows you where all your traffic came from, let’s say, broken down by the country.

So U.S. versus Canada versus Mexico versus Australia versus anything else.  What you might also want to know is in those countries what kind of mobile device do those people use.  Maybe people in the U.S. are more iPhone centric and people in Canada are more Android centric or whatever the case may be.

So if you wanted to analyze not only by country but also by the mobile device, you could for example add a Secondary Dimension to your report which would then give you that added segmentation.  It’s a way to get a bit more of a fine grain segmentation around your data.  Now in the Adwords case, there’s a lot of applications here.

One of the things you might want to do as an example if we go back to the campaigns report you might want to add a secondary dimension, something like mobile.  How does your Adwords campaign perform for people that are actually using a mobile device to do a search on Google.

This is something that has a lot of impact on how your website looks and how the Google search result page looks but not something that a lot of people take the time to analyze.  So if I were to ask most people what percentage of your Adwords budget is being spent to attract people who are currently using an iPhone or an iPad or some kind of Android device.

I don’t think most people would know.  If I ask them how does that conversion rate for those mobile users differ from your traditional kind of desktop user, I’m even more sure they wouldn’t know.  So let’s take a look at how that works.

If you were to go back to the campaigns report that we saw earlier in the Adwords section what you’re going to notice again is this data table where you see your top ten campaigns and they are all listed out here in a series of rows.

Just above that you’re going to see a drop down box that’s called secondary dimension and what that’s going to let you do is search for another dimension that you’d like to plot out in this report.  So do a search for mobile and then what you’ll be able to do is actually see basically a simple yes or no meaning did the person come from a mobile device or did they not.

So if you’ve got a campaign that’s called say Campaign No. 1, you’re now going to see two rows for each campaign.  One that says mobile yes and one that says mobile no and what I think is a really interesting analysis to do is look at how your conversion rate differs for your various campaigns based on again just a simple question of is this person on a mobile device or are they not.

And so for those of you that out there that maybe don’t have a mobile version of your website or a mobile style sheet that you use for folks that are on let’s say an iPhone what you may find is that you’ve got a lower conversion rate for those kinds of users.

So the question then becomes is the conversion rate so low that I actually don’t want to buy this traffic. And if it is, then what you can do is you can obviously configure your Adwords settings to stop showing your ads to folks that are on a mobile device.  But that’s a good example of a Secondary Dimension.  Again, taking a campaign and then slicing and dicing it in some other way .

Philip:  And the Secondary Dimension stuff is phenomenally powerful.  I guess the challenge for users is that there’s just so many ways you can slice and dice that where do you start.  Now you’ve just touched on a really good one but there’s thousands of different dimensions you could look at by match type for example.  You could look at anything you wanted.  So any words of wisdom or direction that – there’s just so many different ways, what do you start looking at?

Nick:   I think that’s a good question.  I think one of the things you want to do, not just for analyzing your Adwords campaign but really for anything that you’re going to do from analytics perspective is have a business question.

So have a business question that you’re trying to answer.  I’m not a big fan of what I call report surfing where you kind of click around and wait for something to jump out at you in the data.

So I think sit down before you spend too much time inside of Google Analytics or any other analytics package for that matter and really actually write out in complete sentences some important business questions about your online presence that you would really want to answer with your analytics tool.

There’s really no list I can give of like here’s the top three ways to use secondary dimensions because every one’s business is different and every one’s goals are different.  So what I would say is if you’ve actually clearly articulated the kinds of questions that you feel are important for your business before you start jumping into all of the data, you’ll find that I think you’ll have a much easier time getting to those actionable insights that you are looking for.

Philip:  Beautiful.  Very well explained.  So let’s move on now – I’m conscious of time and we could speak for days on this stuff.  I know that one of the things that you talked about when I heard you speak was the Day Parting report.  Can you explain a little bit about what that is and why we’d want to look at that?

Nick:   Absolutely.  So the Day Parting report, it’s one of these ones that’s so simple but I still love it because it’s one that’s sort of under utilized and there’s a lot of great insight here just waiting to be discovered but a lot of folks haven’t used it before for some reason.

So Day Parting is a term that comes really out of the radio or television marketing world and it’s the concept of essentially different parts of the day hence the name but in a radio context for example you might have something like the morning drive and the evening drive and then you’ve got the times when fewer people are listening to the radio like the afternoon, the middle of the night.

So day parting really comes out of the offline world but it’s also important in the online world and so what happens is we tend often to not really get any deeper than the aggregate level of data when we do our analysis and what you may kind of fall victim to is seeing a report that says, “Hey! Your conversion rate from Adwords is 5%.”  And you might say, “Wow, 5% sounds really good.  I’m a happy camper.”

But what you’d find if you were to dig down into the Day Parts report here just to give you an example is you might find that there are some times in the day where your conversion rate is 10% or 12% or 20%.  Other times in the day where your conversion rate is quite poor like 1%, 2% or 3%.

These are just made up numbers but the idea here is your traffic isn’t the same all the time and you can kind of get that impression if all you ever do is look at your aggregate data but you want to do is dig a little bit deeper and figure out what’s that sweet spot, what’s the time of day where I can really capitalize on some high quality traffic.

So different businesses will find different times in the day but to give you an example let’s say you’re trying to sell pizza online.  It’s sort of obvious what times of day would do really well – evening, into the night.  Around breakfast time, you probably don’t have as good of a conversion rate and people looking for adverts on pizza isn’t quite there yet.

So what you want to do is make sure that you are Bidding In Line With Value.  So Bidding In Line With Value is a hugely important concept for Adwords.  The idea there is again the value of the traffic that Adwords brings you isn’t always the same.  It fluctuates up and down at different times of the day.

So when the value is highest you want to bid the highest.  You want to as aggressive as possible in capturing that traffic.  When that traffic becomes less valuable because it’s the wrong time of day or it’s the wrong day of the week, let’s say.

That’s when you want to dollar your bids down, you don’t want to be paying as much for traffic that isn’t actually worth as much to you.  So a big sort of missed, maybe even the biggest missed optimization opportunity that we see is that people don’t bid in line with value and a big way to kind of get your head around that is understand when you traffic really is most valuable is to use this day time report.

Now the report itself is very simple.  All it does is it spits out the data for your campaign broken down by the hour of the day.  So if you want to compare how 2:00 in the morning performs compared to 2:00 in the afternoon it becomes very, very simple to do that.  On the Adwords side you’ve got all kinds of tools that will then let you dynamically change your bids in line with the different days of the week or the hours of the day.

So again, that Day Parts report, a great way to drill down, get away from those aggregate numbers that don’t help us very much and really understand where are some of these areas where I can really take advantage of the fact the I’m getting some really high quality traffic in a two or three or four hour window of the day.

Philip:  So let’s say we’re converting really well around lunch time, maybe a four hour window.  So we decide to use Ad scheduling within Adwords and control our spend so ads are only – sorry, control the time that we’re going to show the ads just in that window.  Then we also decide that we’ve made some ad copy changes and we let that run and we start seeing results improving.

Clearly you’re mudding the waters because you’re doing two different things which could be effecting the result.  How do you  – what do you suggest?  Do you think you should be changing just one, just your budget at one point and just your ad copy the period after that?  How do you get around that?

Nick:    Well you bring up a great point which that any time you’re trying to sort of make a change and evaluate the results, the more levers you pull, the less sure you can be of which change really drove the observed performance change.

So if you not only – let’s say you changed your bids but also you change the ads and then you observe some kind of change in the performance, how do you know which one of those things really cause what you saw.  So we talked about secondary dimensions and that’s a great way to get around this.

Let’s say you’re looking at the day parts report, you’ve got this report here that’s telling you how your ads perform for every hour of the day.  One of the things you can do is you could add a secondary dimension to actually show you which ad somebody saw at that time.

Let’s say you had a couple of different versions of your ad running, you’d be able to see okay, at 8:00 in the morning what are the two ads that my users saw and which one of them performed better.  So you’d be able to not only figure out at the high level which hours of the day are the most lucrative but also if different ads worked better at different times, you’d also be able to see that using that secondary dimension.

Philip:  Beautiful.  Too easy.

Nick:   This is one of those ones that – I had this aversion to the gurus out there that tell you that everything is so easy and there’s these magic bullets that you can achieve great things.

I’m more in the camp where you got to put in the work and do your homework and do all that kind of thing but this report, the Day Parts report, it really is just dead simple.  I think the reason that people don’t use it is not because it’s too difficult to interpret the data or to use the data to take action, it’s just that people don’t know it’s here.

Philip:  Yeah I think secondary dimension for me is probably one of the most under utilized and highly valuable functionality.

Nick:   Absolutely, I’d say a big lesson for analysis whether it’s analyzing Adwords or anything else is – if you want to get actionable insight you really have to get away from aggregate types of numbers.

If you are spitting out reports that say here’s how much we spent on Adwords this month or this week or even, here’s a campaign breakdown of our spend or our conversions.  It’s really not good enough, what you’ve got to do is really slice and dice that data to get down to the point where you are really answering very specific questions, such as which version of my ads work best at 8 o’clock in the evening.

That’s a very specific question and once you start getting insights at that kind of level of granularity, it become very easy actually to take action on them.

Philip:  I was looking through my notes from your presentation at Gauge in New York and one of the quotes, one of the things I had written in large letters and underlined on my notepad was “The more you segment your Adwords data, the more money you will make” period.

Nick:    Yeah, that’s really how I try to boil it down.  So again, getting as far away from these sort of aggregate types of reports and really drilling down and doing our homework, doing the segmentation.  And again, what it really comes back to, I think a lot of folks ask what’s the best way to segment, right?

And I love that people want to segment but again, you are really going to help yourself out if you start with a key business question.  So what are the things that really matter for your business?

What are kinds of metrics that are most important to your success?  Start asking some hard business questions around those metrics, that’s really going to help you segment and drill down inside of this vast sea of data that analytics will give you.

Philip: There’s some absolute gold in this interview Nick, so really appreciative about that.  Maybe we can close on what is the one thing you would like Google Analytics to innovate on or to add into their functionality?

Nick:   That’s a great question and I think one of the areas that people have struggled with in the Adwords world for a long time is some of these non search formats.  So you can do a lot with your Adwords account beyond just kind of the traditional paid search listings.

So you can do things like display advertising in all of its forms, so that’s image ads and video ads and flash ads and all kinds of new ways that Google is offering you to be able to some advertising outside of search.

Usually what happens is the measurement piece for those kinds of formats has always sort of lagged behind a bit and so I think that’s an area where if Google wants to sell display advertising to smaller or medium size businesses, they are really going to have to give those kinds of businesses the ability to measure that advertising the same way that they’ve given those businesses the way to measure search.

I think they’re not quite there yet.  So folks that are listening, it’s pretty common to have had a bad experience with what’s called the display network or the content network where you’re doing things like banner ads or image ads.

A big part of that is it’s very difficult to optimize those based on hard measurements and so I think Google’s come a long way with that and I think they are going to continue to do that but I think that that’s the sort of the next frontier I think for a lot of businesses is that ultimately you get to a point where you’ve got search pretty well optimized, you can’t really squeeze more juice out of search by maintaining your ROI.

So I think display is again that next avenue once you got search down.  How can I reach out to my customers before they search through display ads and I think the more that Google can do to equip us to measure display ads as well as search I think the more their going to see their own growth and revenue through advertisers really adopting displays.

I think that’s an area of need still maybe where Analytics hasn’t quite caught up to par but something I’m pretty confident that they are going to be addressing pretty aggressively.

Philip:  Nice.  Do you know when they are going to be adding back that functionality around exporting reports as PDF format?  I guess that’s the big bitch isn’t it with this new interface?

Nick:   Well it’s amazing, you think about the kinds of things that Google is able to do with Google Analytics, the amount of data they are able to collect, the power of segmentation that they are able to give you.

Really, if you stop and think about it, it’s actually quite amazing.  And then you think about some of the things that are missing like you’re not able to export a PDF of a report so there are some of those things where you just can’t believe that it’s missing but it’s true.

So things like email scheduling of reports and PDF exports, if you are someone who has used both versions of Google Analytics that are available right now, you’ve probably noticed that some of those things are missing from the new version.  I think that the comforting line right now are those things right now are very actively being addressed so you should expect to see those things soon.

I wish I could give you a hard date but even if I knew I probably couldn’t tell you.  But absolutely, all those little things that are some of the pain points with the new version that people kind of miss from the old one, all those things will be updated so that there’s total parity and then you’ll be able to really focus on all the great things about the new interface.

Philip:  You’ve been incredibly generous with your time Nick and given us some absolute gold in there.  Any plans to come to Australia, we’ve got some good micro breweries we can show you.

Nick:   Hey I’d love to come, I think it’s all a question of who’s paying so talk to the high ups here on my side and see if we can’t make that happen.

Philip:  Beautiful, we look forward to seeing you and we’ll be definitely going out for a pale ale or two.

Nick:    Sounds good, I’m looking forward to it.

Philip:  How can people find you online?

Nick:  Couple of different ways.  If you want to check out Cardinal Path, just www.cardinalpath.com.  I’m also on all the various social networks, too many to manage these days it seems like.  I try to tweet analytics related tips and tricks and articles on Twitter @twitter.com/analyticsnick, all one word.

Philip:  Great, thanks again Nick.

Nick:    No problem Philip, thanks for having me.

By Philip Shaw