Shocking Results! How New Google AdWords Advertisers Get Crushed (Test Results Are In)

One of the single most frequently asked questions that we get from new Google AdWords advertisers is the following:

Where is the traffic?

Everybody knows that Google gets ton’s of traffic so why is it that lots of new Google AdWords advertisers fail?

We did a radical test last week to get to the bottom of what is going on.

We had been running a couple of very successful campaigns for one website for over one year. So, here is what we did.

We paused the campaigns on our existing Google AdWords account and created a new Google AdWords account. We then launched the identical campaigns on a new Google AdWords account.

Here are the results that we got after the first week. They are nothing short of devastating! Take a look at three Ad Groups and check out the results before and after moving them into the new AdWords account.

Our new Google AdWords account got crushed! Above I am sharing the results from three Ad Groups before and after the test. Our average daily click count basically dropped to zero and we got hardly any impressions. However, nothing changed!

In total, we moved over 200 Ad Groups across 10 campaigns and the results are the same across the board. Here are the results at the aggregate account level.

Lets remember that NOTHING has changed except moving the campaigns from an existing Google AdWords account to a new Google AdWords account. If this is not shocking, then tell me what is.

So, what can explain this?

The only difference is History!

In this experiment, everything was kept constant except moving campaigns from an existing Google AdWords Account to a new Google AdWords account. And, when you move accounts, the only thing that you lose is history.

Why is history so important?

• In Google, everything is based on the Quality Score which is a combination of how your ads have been performing over time relative to ads of the competition.
• Ads with a higher quality score will get surfaced more often and have a dramatically lower required bid minimum. When we drilled into the new Google AdWords account we saw bid minimums that far exceeded the maximum bids that we used previously. So, if your account has no history, you might have to spend extra to establish a good history by bidding high just to get started.
• We also know that ads with a higher click-through-rate will have a higher quality score and that ads that start appearing in a higher position will have a higher click-through-rate because people click on more links that appear higher on the page. So, once again, new Advertisers will have to spend extra to quickly drive up the Quality Score.

I have long been hypothesizing about a “Doom Loop” and a “Money Loop.” New AdWords users end up in the “Doom Loop” if they do not start out very strongly. Initially, it pays to overpay and overbid just to rapidly earn a higher quality score which will increase your click-through-rate and lower the minimum required bid for many of the keywords that you want your ads to surface for. By starting out strong, new advertisers can get into the “Money Loop” (vastly more impresseions, higher CTRs and lower bid prices).

However, what I never knew is that new Google AdWords advertiser get crushed if they just follow what existing Google AdWords advertiers are already doing. To displace them, it seems takes a far more aggressive bidding strategy than what the entrenched players are already doing.

I would love to hear your thoughts on this especially if you have any other possible explanations for what might explain the horrible results with the new AdWords account.