Description of used approach
In accordance with the method described by Google, the service adrelevance.info calculates its own indicators. Indicators calculated by the service adrelevance.info are divided into two groups, the effectiveness of investment and the relevance of the components of the advertising campaign towards to each other.
Google Advertising interface provides two indicators in units on a ten-point scale, such as relevance of ads and relevance of a landing page.
More than one thousand active advertising campaigns were analyzed by AdRelevance.info, as a part of an experiment that lasted for several years. The results of more than 200 advertising campaigns could have been compared week to week, and the group of detailed analysis was formed based on them.
The effect of other factors impacting CPC in the detailed analysis group, was reduced to a minimum. The relevance data provided by Google was compiled and averaged. Next step was to carry out weekly comparison of the budgets of advertising campaigns depending on the relevance indicators. Based on this correlation a model that demonstrates the impact of relevance on the cost of an advertising campaign was built.
As a result of the experiment, it was concluded that the relevance indicator has inverse impact on the size of the budget. The higher the relevance is, the lower the average CPC and so the advertising cost. High relevance also contributed to an increase in the number of ad impressions as well as improved conversion of the website.
The relevance of ads is calculated by the ratio of the number of words included in the phrases of each of the elements of the advertising campaign to the total number of words contained in all the phrases. Relevance calculated by Adrelevance.info has direct connection with the relevance indicators provided by Google advertising interface.
In conclusions, relevance contributes to:
- increasing the number of impressions;
- reducing the cost per click;
- increasing conversion rate of the website.