Masarykova univerzita

Ekonomicko-spraá vníá fakulta

Studijní obor: Podnikové hospodářství

OPTIMIZING THE RETURN ON INVESTMENT FOR

GOOGLE ADWORDS IN B2B COMPANIES APPLIED TO
THE NORTH AMERICAN MARKET

Diplomovaá praá ce
Master Thesis

Vedoucíá diplomoveá praá ce: Autor:

Mgr. Ing. Jan ZŽ AÁ K Iveta SŽ TARKOVAÁ

Brno, 2011
 Masarykova univerzita
Ekonomicko-správní fakulta

Katedra podnikového hospodářství

Akademický rok 2010/2011

ZADÁNÍ DIPLOMOVÉ PRÁCE

Pro: ŠTARKOVÁ, Iveta

Obor: Podnikové hospodářství

Naá zev teá matu: Optimizing the Return on Investment for Google AdWords in
B2B Companies Applied to the North American Market

Zásady pro vypracování

Problémová oblast:
Strategie, e-business, e-marketing

Cíl práce:
Proveá st analyá zu naá vratnosti investic v oblasti B2B e-marketingu.

Postup práce:
V teoretickeá cč aásti autor prč edstavíá zpuů soby analyá zy zkoumaneá ho prostrč edíá, specifika
meč rčeníá vyá sledkuů a analyá zy naá vratnosti investic. V praktickeá cč aásti si autor zvolíá oblast,
kde bude aplikovat popsaneá metody, uvede duů vody pro jejich pouzč itíá a jakeá zaá več ry z
provedeneá analyá zy vyplyá vajíá pro podniky a vyá stavbu jejich strategiíá investic. Vyá stupem
praá ce bude naá vrh strategie jak optimalizovat naá vratnost investic ve zkoumaneá oblasti.

Použité metody:
Resč ersč e zejmeá na elektronickyá ch zdrojuů , deskripce, analyá za, dedukce a synteá za.

Rozsah grafických prací: cca 15 tabulek a grafuů

Rozsah práce bez příloh: 60 – 80 stran

Seznam odborné literatury:

 Kislingerovaá , Eva - Hnilica, Jirč íá. Finanční analýza :krok za krokem. 2. vyd. Praha :
C.H. Beck, 2008. xiii, 135. ISBN 978-80-7179-713.
 Ruů cč kovaá , Petra. Finanční analýza :metody, ukazatele, využití v praxi. 2. aktualiz.
vyd. Praha : Grada, 2008. 120 s. ISBN 978-80-247-2481.
 Beck, Alexander. Google AdWords. Translated by Jan Rozkosč nyá. 1. vyd. Praha :
Grada, 2009. 232 s. ISBN 978-80-247-2898.
 Clifton, Brian. Google analytics: podrobný průvodce webovými statistikami.
Translated by Lukaá sč Krejcč íá. 1. vyd. Brno : Computer Press, 2009. 334 s. ISBN 978-
80-251-2231.

Vedoucí diplomové práce: Mgr. Ing. Jan Žák

Datum zadání diplomové práce: 18.11.2009

Termín odevzdání diplomové práce: 4.4.2011

…………………………………… …………………………………………
Vedoucíá katedry Deč kan
V Brneč dne: 4.4.2011
Jm eá no a p rč íá j me níá a uto ra :
Naá z ev p raá ce v a ngl icč t ineč :
Ka ted ra :
Ve d o uc íá d ip l omoveá p raá c e:
Ro k o b ha j o by:
Iveta SŽ tarkovaá
Optimizing the Return on Investment for Google
AdWords in B2B Companies Applied to the North
American Market
podnikoveá ho hospodaá rč stvíá
Mgr. Ing. Jan ZŽ aá k
2011

Anotace
Prč edmeč tem diplomoveá praá ce „Optimizing the Return on Investment for Google AdWords
in B2B Companies Applied to the North American Market“ je analyá za zkoumaneá ho
prostrč edíá uá stíácíá v naá vrh strategie, jak optimalizovat naá vratnost investic do internetoveá
reklamy. Prvníá kapitoly jsou zameč rčeny na popis probleá moveá oblasti. V druheá cč aásti je na
zaá kladeč poznatkuů z prvníách kapitol doplneč nyá ch praktickyá mi poznatky z praktickeá cč aásti
sestaven optimalizacč níá model. V praktickeá cč aásti je pak tento model aplikovaá n na online
kampaneč spolecč nosti Hilti Inc. Konecč naá cč aást shrnuje vyá sledky pouzč itíá optimalizacč níáho
modelu v praxi vcč etneč z analyá zy plynoucíách strategickyá ch doporucč eníá - nejen pro Hilti.

Annotation
The goal of the submitted thesis: “Optimizing the Return on Investment for Google
AdWords in B2B Companies Applied to the North American Market” is an analysis of the
problem area resulting into a recommended strategy to optimize return on investment
for online advertising. The first chapters are focused on a description of the problem
area. The second part establishes an optimizing model from the findings of the first
chapters and experience acquired in the practical part. The practical part describes how
the model should be used by applying it to Hilti Inc. The final part summarizes the
results of the model application including strategic recommendations resulting from the
analysis for Hilti and for advertisers in general.

Klíčová slova
Naá vratnost investic, strategie, online marketing, Google AdWords, míára konverze, B2B

Keywords
Return on investment, strategy, online marketing, Google AdWords, conversion rate, B2B
Declaration

I declare that this work has been completed by me independently under the direction of
Mgr. Ing. Jan ZŽ aá k. I have used no sources or aids other than those cited.

Brno April 4, 2011

Iveta SŽ tarkovaá
Non - Disclosure Note

The practical part of this master thesis is Hilti confidential. It may not be duplicated,
published, or made available to unauthorized persons. Written permission must be
obtained from Hilti AG before any publication of this text or before passing it to third
parties other than the relevant university employees.

Brno April 4, 2011

Iveta SŽ tarkovaá
Acknowledgements

I would like first to thank Jan ZŽ aá k and Bjoö rn Schneider for their guidance with this thesis
and valuable comments.

I would also like to thank Bettina Boison, Andreas Wasmer, Luke Finn, Marlene Labra,
Timothy Henry, Abbie Peraza and Farren Benett from Hilti for all their support,
professional advice and great ideas.

I thank also Julia Zanona, Roman Bamberger and Pedro Carvalho from Hilti, who have
sponsored my AdWords campaigns launched in the USA and therefore contributed
significantly to fulfill the goal of this thesis.
Table of Content

Introduction..................................................................................................................................................... 12
1. Online Marketing.................................................................................................................................. 13
1.1. Classification of AdWords within Online Marketing...........................................................13
1.2. Advantages of Online Marketing................................................................................................. 13
1.3. Sales and Ad Spending Online Growth..................................................................................... 14
2. Business to Business Online Marketing....................................................................................... 16
3. American Online Market.................................................................................................................... 17
3.1. Internet Users..................................................................................................................................... 17
3.2. Marketing Spending......................................................................................................................... 18
3.3. Biggest Advertisers on Google..................................................................................................... 19
4. Search Engines....................................................................................................................................... 20
4.1. History................................................................................................................................................... 20
4.2. Trust in Search Engines.................................................................................................................. 21
4.3. Data Protection.................................................................................................................................. 21
5. Principals and Indicators of Google AdWords..........................................................................23
5.1. Pricing – the Big Advantage.......................................................................................................... 23
5.2. Quality Score....................................................................................................................................... 24
5.3. Ad Rank................................................................................................................................................. 25
5.4. Real Paid Cost per Click.................................................................................................................. 25
5.5. Impressions and Impression Share........................................................................................... 26
5.6. Clicks and Click Through Rate...................................................................................................... 26
5.7. Conversions and Conversion Rate.............................................................................................. 26
6. Measuring the Return on Investment........................................................................................... 28
6.1. Return on Investment from Campaigns................................................................................... 29
6.2. Return on Investment from Keywords..................................................................................... 29
6.3. Conversions without Explicit Revenue..................................................................................... 30
7. Model of Optimizing the Return on Investment.......................................................................31
7.1. Environmental Analysis.................................................................................................................. 31
7.2. Campaigns Creation......................................................................................................................... 32
7.2.1. Targets............................................................................................................................................... 32
7.2.2. Google AdWords Account.......................................................................................................... 33
7.2.3. Campaigns....................................................................................................................................... 33
7.2.4. Ad Groups........................................................................................................................................ 33
7.2.5. Keywords......................................................................................................................................... 34
7.2.6. Ads...................................................................................................................................................... 35
7.2.7. Landing Pages................................................................................................................................ 35
7.3. Analyzing and Optimizing.............................................................................................................. 36
7.3.1. Optimizing Keywords List......................................................................................................... 36
7.3.1.1. Keyword Bid............................................................................................................................... 36
7.3.1.2. Keyword Match......................................................................................................................... 39
7.3.1.3. Organic Search Results........................................................................................................... 40
7.3.1.4. Expensive Keywords............................................................................................................... 40
7.3.1.5. Number of Impressions......................................................................................................... 40
7.3.1.6. Number of Conversions......................................................................................................... 40
7.3.2. Optimizing of Advertising Texts.............................................................................................. 40
7.3.3. Optimizing of Landing Pages.................................................................................................... 41
8. Practical Part - Hilti North America.............................................................................................. 42
8.1. Environmental Analysis.................................................................................................................. 42
8.1.1. Market Specifications.................................................................................................................. 42
8.1.2. Mission and Strategy of Hilti.................................................................................................... 43
8.1.3. Marketing in Hilti.......................................................................................................................... 43
8.1.4. Online Marketing in Hilti........................................................................................................... 44
8.1.5. Analysis of Competitors............................................................................................................. 46
8.1.6. SWOT Analysis............................................................................................................................... 47
8.2. Campaigns Creation......................................................................................................................... 48
8.3. Analyzing and Optimizing.............................................................................................................. 51
8.3.1. List of Keywords............................................................................................................................ 51
8.3.2. First Month Results...................................................................................................................... 53
8.3.3. Ads...................................................................................................................................................... 54
8.3.4. Landing Pages................................................................................................................................ 56
8.3.5. Results after three months........................................................................................................ 58
8.4. Return on Investment from the Campaigns...........................................................................61
8.5. Results and Contribution to Hilti................................................................................................ 64
8.5.1. Online Marketing Strategy........................................................................................................ 64
8.5.2. Contribution to Processes development............................................................................. 66
8.5.3. Summary: Next steps & Recommendations.......................................................................66
9. General Recommendations to Advertisers................................................................................. 68
Conclusion......................................................................................................................................................... 70
Literature........................................................................................................................................................... 72
List of Charts, Formulas, Pictures and Tables..................................................................................... 75
List of Abbreviations..................................................................................................................................... 76
Appendix............................................................................................................................................................ 77
Introduction

There is a famous statement of John Wanamaker, who became the first modern
advertiser in 1879, when he bought space in newspapers to promote his stores: “I know
half of my advertising is wasted. I just don’t know which one” (The Economist, 2006).
This thesis shows that Wanamaker’s problem can be avoided in online advertising. The
return on investment (ROI) can be measured as well as optimized. This belief seems to
be theoretically supported by a couple of authors. The Economist (2006): Thanks to the
power of the Internet, advertising is becoming less wasteful and its value more
measurable. It becomes a variable cost of production that measurably results in making
more profit. Tim Armstrong (2006) states: “Wanamaker’s trouble will be obsolete in a
digital media world where ROI is transparent. An example of this changed environment
is the Google AdWords program based on cost per click.” The objective of this thesis is to
prove this belief. The way of measuring and optimizing the return on investment for
online advertising will be demonstrated using Google AdWords.

Even though there is the theoretical support, optimizing of return on investment has
been hardly brought into the business reality. It was determined that only 34.2% out of
263 interviewed marketers measure ROI to evaluate interactive campaigns effectiveness
(Jaffee, 2007). Furthermore, Forrester Research reported that 69% of the marketers
surveyed felt that ROI is “too difficult” to measure (in Jaffee, 2007). Wanamaker was
actually not far from reality. The worldwide advertising industry was likely to be worth
$428 billion in revenues in 2006 and it is estimated that advertisers waste – send
messages that reach the wrong audience or none at all – $112 billion a year in America
and $220 billion worldwide (The Economist, 2006).

This thesis meets its main target by creating a model of measuring and optimizing ROI
for Google AdWords advertising, which can be used by any advertiser. The functionalities
of the model are demonstrated on AdWords campaigns launched for one of the world’s
leading innovative construction solutions provider - Hilti Inc. The practical part of this
thesis cannot be made public, because it contains confidential information about
processes and product prices of Hilti Corporation.

There are three hypotheses to be verified in relation to the target of this thesis. They are
described in detail in the practical part of the thesis (chapter 8.2.).

The methods used are mainly recherche of electronic sources, description, analysis,
deduction and synthesis.

12
1. Online Marketing
This chapter describes online marketing and its advantages for buyers and sellers,
including the most valuable advantage for marketing – track-ability of success (of ROI).
Thanks to this feature, the target of this thesis can be fulfilled, because if there was no
tracking, it would have been difficult to measure and optimize ROI from online
campaigns. Google AdWords is classified within the area of online marketing to define
the first characteristics of the problem area. At the end of this chapter, global rising
trends of online sales and online ad spending are presented to highlight the importance
of online marketing for advertisers, which will probably increase further in the future.

1.1. Classification of AdWords within Online Marketing

Online marketing (internet marketing, e-marketing) is the fastest-growing form of direct

marketing; direct marketing can be defined as direct connections with targeted
consumers to obtain immediate response and lasting relationships (Armstrong and
Kotler, 2008). Therefore, online marketing can be seen as “company efforts to market
products and services and build customer relationships over the Internet” (Armstrong
and Kotler, 2008).

Armstrong and Kotler describe four ways to conduct online marketing – using email,
creating a Web site, placing ads online and creating Web communities (2008). This
thesis focuses on only one of these – online advertising. Actually, the problem area can be
delimited even more exactly as SEM (search engine marketing) applied to Google search
engine and Google’s advertising program called AdWords. Other types of online
advertisements, which exceed the topic of this thesis, are, for instance, display ads,
banners and videos shown on different Web sites.

1.2. Advantages of Online Marketing

A study by BURST! Media in 2005 indicates that Internet users spend more time online
and often do so at the expense of other media. About 35% of respondents were watching
less TV, and more than 30% were spending less time reading newspapers and magazines
(in Harvard Business Essentials, 2006). The shift of potential audience to the Internet is
not the only incentive for companies to invest in online marketing. Internet can decrease
cost. Lower cost of online advertising attracts advertisers also in times of economic
decline. According to Byrd and Lindsay (2007), the Internet offers both lower cost and
higher ROI. For instance, contacting potential customers via e-mail costs about $0.02,
whereas direct mail costs 25 to 50 times as much (Harvard Business Essentials, 2005).
Moreover, online marketing presents a possibility to reach a huge audience: “Worldwide,
some 470 million people had Internet access in 2007” (Armstrong and Kotler, 2008).

Online marketing undoubtedly offers advantages to both buyers and sellers. It is very
convenient for buyers to choose products or services at home; they can take their time,
avoid crowded shops, traffic jams and not loose time and money by travelling to shops.
Additionally, they can easily compare products and prices, as well as have a look at

13
products in different countries. They do not have to worry about opening times.
Everything is accessible, immediate and interactive. Sellers can save cost by selling
online, because they do not have to rent facilities, they do not need so many shop
assistants (if any). The Internet provides easier access to new markets for companies
and is very suitable for building customer relationships. Advertisers are quicker, more
flexible and efficient online.

However, the biggest advantage and opportunity for marketing arising from the Internet
is the possibility to track data and therefore measure and optimize the return on
investment from online campaigns. “The information coming back from the users is
more important than the messages going out” (The Economist, 2006).

1.3. Sales and Ad Spending Online Growth

Euromonitor International estimated that global online sales would top $308 billion in
2010, and that figure is expected to almost double to $601 billion by 2015 (CNN, 2010).
Rising online sales are a consequence of several factors – more people are using Internet
and when they get comfortable with buying online, they make more of their purchases
via Internet. And, more companies are creating e-commerce Websites (Harvard Business
Essentials, 2006).

Understandably, online marketing does not have an impact on online sales only. “It is
generally believed that 30% of purchases made in bricks-and-mortar retail stores are
influenced by pre-purchase research conducted on the Internet” (Harvard Business
Essentials, 2006). The Economist (2004) highlights the influence of a group of
consumers, so called prosumers (which stands for proactive consumers), who use the
Internet to research what they are going to buy and how much they are going to pay for
it. The Economist claims that what these consumers say to their friends and colleagues
about brands and products tends to become mainstream six to eighteen months later,
and that half of the prosumers distrust companies and products they cannot find on the
Internet (2004).

Whole online marketing was a huge buzz in the late 1990s. In 2003, Internet marketing
investments accounted for 7.7% of total marketing investments (MET Report of the
London Business School in Harvard Business Essentials, 2006), in 2007 it was 9%, and
the prospect of 2011 is 15% as illustrated on chart 1 done by Zenith Optimedia (in The
Economist: The world in 2011, 2010).

14
Chart 1: Advertising spending by medium

Source: Zenith Optimedia (in The Economist: The world in 2011, 2010)

Global advertising spending will grow by 4.5% in 2011 - double the rate of the previous
year and online ad spending will grow by 16%, boosting its share of all advertising to
over 15%. Ads around search engine results will account for half of internet advertising
(The Economist: The world in 2011, 2010).

15
2. Business to Business Online Marketing
This chapter summarizes characteristics of B2B (business to business) markets to more
precisely define the problem area, and presents existing findings about key indicators
driving the behavior of business customers into the direction of online purchasing. All
these factors must be taken into account not only when creating, but also when applying
the model of ROI optimizing in the practical part of this thesis.

According to Armstrong and Kotler, B2B online marketing can be seen as “using B2B
Web sites, e-mail, online product catalogs, online trading networks, and other online
resources to reach new business customers, serve current customers more effectively,
and obtain buying efficiencies and better prices” (2008).

Armstrong et al (2007) describe B2B market specifications as follows (summarized):

B2B companies work with fewer but much larger buyers; the demand is derived from
consumer demand and is usually less price elastic (does not change significantly when
prices change), but fluctuates a lot (10% increase in consumer demand can cause 200%
increase of the demand on B2B market). Buyers are usually professional buyers,
therefore purchases are more complicated (longer decisions and formalized processes);
buyers and sellers are much more dependent on each other than in B2C (business to
consumer), thus the business is focused on long-term relationships.

According to Fenech and Merrilees (2007), customers´ loyalty in the B2B environment is
mainly driven by history of satisfaction with repeated purchases and a key reason
influencing customers´ intentions to purchase from a particular online supplier is trust.
Based on their study, business customers considered ease of use and speed of the Web
channel, together with purchasing experience, to be the most important factors.

Fenech and Merrilees conclude that frequently purchased low unit-value commodity
type business products seem to be the ideal mix for B2B multi-channel marketing
strategy. Their study (2007) also states, that one of the characteristics of people who are
unlikely to use an online channel is moderate use of the Internet for information
research. That means that only by using SEM, advertisers, whose target is defined in
terms of sales, might already get rid of some irrelevant audience.

16
3. American Online Market

In the first chapter, the defining factor was Google AdWords as a small part of online
marketing; in the second chapter it was the B2B market this thesis if focusing on; and
lastly - this chapter finishes the problem area definition by describing the US (American)
online market and its characteristic. All these factors should be considered whenever
new online campaigns are going to be launched. In the model of ROI optimizing
(described in chapter 7), information collected in chapters 1 to 3 would be a part of
environmental analysis (subchapter 7.1.). Therefore, all of these chapters have already
contributed to the practical part of this thesis. In this thesis, “American market” means
the market of the USA (United States of America).

3.1. Internet Users

According to Armstrong and Kotler (2008), Internet household penetration in 2007

reached 64% in the USA, with more than 205 million using the Internet at home or at
work. The average American Internet user spends about 31 hours a month surfing Web
at home plus 78 hours at work.

“In 2004 it has been calculated that the average American is subjected to some 3,000
advertising messages every day” (The Economist, 2004). The same study claimed that
65% of people felt “constantly bombarded” by ad messages and that 59% felt that ads
had very little relevance to them. In 2008, these feelings graduated and people started
becoming concerned also about their personal data privacy. The Economist stated:
“Online ads face new obstacles. It points to a recent survey of American consumers
which found that more than three-quarters of respondents said online ads were more
annoying than those in print. Concerned about their privacy, people have started to
lobby against online tracking of sales, which is a vital element of the internet's much-
vaunted effectiveness” (2008). There is a little contradiction in the opinions of Internet
users. They feel ads have only a little relevance to them, but they do not want to be
tracked, which could have decreased their frustration coming from the numerous
irrelevant advertisements.

A study from 2010 revealed the willingness of more than one quarter of 1,600 American
respondents to be tracked and to allow Websites to store their non-personal data if they
would see better targeted advertisements. Nearly one half of respondents objected,
whereas men were more likely to allow their non-personal data to be tracked than
women 37.3% vs. 19.8% respectively (Burst Media in Computers, Networks &
Communication, 2010). Burst Media investigated in their 2009 study the biggest
shopping concerns of online buyers as well; the results are illustrated in chart 2.

17
Chart 2: Online Shopping Concerns

Source: Burst Media (2009)

3.2. Marketing Spending

The marketing industry spent $250 billion in the 2005 in the USA (Armstrong, 2006). In
the same year, American companies spent more than $12.5 billion on online advertising,
which is 30% more than in 2004 (Armstrong and Kotler, 2008). Online advertising
spending in the USA stands for about half of the global total (The Economist: Not ye olde
banners, 2008). Chart 3 illustrates how much has been spent for different forms of
online marketing in the USA from 2002 to 2007. Since 2004 search advertising takes the
biggest part of companies´ online budgets.

Chart 3: US online advertising spending

Source: The Economist: Not ye olde banners (2008)

18
There is further latent potential for online ad spending to grow. The Economist: How
long will Google’s magic last? (2010) states: “Morgan Stanley, an investment bank, finds
that Americans spend 28% of their media time online, yet only 13% of total ad spending
is devoted to the internet. If ads ultimately catch up with eyeballs, an extra $50 billion-
worth of advertising could be shifted online each year, Morgan Stanley estimates.”

3.3. Biggest Advertisers on Google

Learmonth (2010) published a list of advertisers which have spent the highest amount
on Google ads during June 2010: The biggest advertiser was Expedia with $5.9 million
followed by Amazon with $5.8 million. In the third place was E-Bay which spent $4.2
million. AT&T Mobile spent more than $8 million. GM, Walt Disney, Eastman Kodak and
BMW, appear to have spent less than $500,000 in June 2010. Apple spent just under $1
million on search during the month, same as did chip maker Intel.

Learmonth highlights the fact that Google's biggest advertisers like AT&T, Apollo Group
and Amazon, individually accounted for less than 1% of Google's revenue in the USA in
June, and the top 10 advertisers in the document collectively accounted for just 5% of
Google's revenue during the month in the USA (2010).

19
4. Search Engines
This chapter briefly summarizes the history of search engines and informs about danger
hidden behind their enormous usage. It helps to understand the background of Google
AdWords principles and therefore the model of optimizing the return on investment
from online advertising as well. Moreover, the danger described in this chapter appeared
to be one of the biggest worries of the company represented in the practical part of this
thesis and affected the process of optimizing significantly.

According to Fellows and her research conducted in 2005, 84% of Internet users utilize
search to find information on the Internet. Search engines are some of the most
commonly accessed Websites online - millions of people turn to them to find content on
a daily basis (Fallows in Hargittai, 2007) submitting billions of queries each month
(comScore in Hargittai, 2007).

What part does Google account for? Nearly 75% of all searches are performed by Google
(Stibel, 2009) and Google’s searchable database includes over one trillion Web Pages
(Stallworth, 2010).

4.1. History

Until 1990, unless people knew exactly where to look, it was impossible to find a
Website. The very first tool used for searching on the Internet, created in 1990, was
called Archie. In 1994 the first full text crawler based search engines – WebCrawler and
World Wide Web Worm (WWWW) came out (Brin and Page, 1998). With the increasing
number of users, search engines had to handle more and more queries. In 1994, WWWW
received about 1,500 queries a day; by 1997, Altavista claimed it handled roughly 20
million queries per day (Brin and Page, 1998).

The predecessor of current paid search was established by a company called Open Text
which in 1996 offered preferred listings, in which websites could pay to be inserted into
the search result for particular keywords (Fain and Pedersen, 2006).

In 1998, Google Inc. was founded by Sergey Brin and Lawrence Page. In their paper, “The
anatomy of a large-scale hyper textual Web search engine” they described the intention
to eliminate problems of existing search systems such as expensive, subjective and time
consuming human maintained lists of popular topics and too many low quality matches
of automated search engines relying on keywords matching. They demonstrated the low
quality of search results in 1997 by showing that only one of the top four commercial
search engines finds itself in the top ten results. To overcome existing problems Page and
Brin designed a new search engine called Google, which mastered the always growing
amount of information on the web thanks to two main features – quality ranking of each
web page based on a link structure (so called Page Rank) and treating the text of links in
a special way, so called Anchor text (1998).

One of the first people who realized the capability of Internet advertising to reach the
right audience was Bill Gross and one of the companies that came out of his factory was

20
GoTo.com, later renamed Overture, which pioneered the market for paid search or pay
per click (PPC) advertising. Mr. Gross offered his idea to Google, but he was turned down
(The Economist, 2006).

In 2000, Google developed the AdWords self-service ad program, and in 2005, acquired
Urchin - a web analytics company whose technology is now used to create Google
Analytics (Google milestones). Thanks to its amazingly successful online-search
business, Google transformed itself in the space of a mere 12 years from a tiny start-up
into a behemoth with $180 billion market capitalization as market leader for search-
related online ads (The Economist, 2010). Similar advertising systems are offered by
Yahoo! (which bought Overture), Microsoft and eBay (The Economist, 2006). Yahoo! was
the first major sponsored-search provider to offer a tool that enabled campaign
management across multiple online advertising types, including banners, sponsored
search and email campaigns. Both Yahoo! and Google have run continuous auctions, in
which a competitor willing to pay more could displace an advertiser at any time. When
Google re-launched AdWords in 2002, they modified the ranking rules to use click
through rate (CTR) multiplied by CPC instead of just CPC (Fain and Pedersen, 2006). This
system rewards highly relevant results by lower prices.

4.2. Trust in Search Engines

The more relevant results searchers find the more likely they come back to the search
engine the next time they need to find something. 68% of users view search engines as a
fair source of information (Fallows, 2005). But many searchers do not understand the
difference between paid and organic search results and when they become aware of the
practice of paid search, their trust in search engines falls (Zimmer, 2006).

Advertisers’ trust in search engine providers is one of a completely different origin.

Advertisers have to trust that advertising systems work and they are charged fairly.
There are some well-known cases of “Google bombing”, which confirmed the existing
worry about possibility to influence the organic search results ranking by extensive
linking. And another worry is fraudulent clicks. It can be a competitor clicking on ads
and therefore making his competitor pay for nothing. According to study by Kitts et al.
(2006), 15% of clicks are fraudulent. Google has some tools to recognize fraudulent
clicks and credits them back to the advertisers. But, it cannot recognize 100% of fraud
clicks. A possible solution could be using pay per action types of payments like pay per
call or pay per sale.

4.3. Data Protection

If advertisers want to track their campaigns’ success with help of the search provider’s
tools, they have to insert html tracking code into their website. That causes a worry
about data security for all – advertisers, customers providing their information, and all
Internet users.

The situation of Google regarding data protection was precisely analyzed by Church and
Kon in their 2007 study called “Google at the heart of a data protection storm”. The
paragraph below summarizes their findings contributing to the topic of this thesis:
21
 The first serious privacy breach by a search engine happened in 2006. AOL accidentally
published three months of search queries from more than half a million users. Some of
the search terms have been very private (financial problems, criminals, sexual
preferences, etc.) and in a couple of cases it was possible to actually identify a certain
person thanks to the queries. Google stores even more information about users than did
AOL and the most controversy has been attracted by Google Mail because of content
extraction used for advertising. The Electronic Privacy Information Centre raised
concerns when Google wanted to acquire DoubleClick, because it could create a
comprehensive profile about individual users by combining data about both the terms
they search for and the websites they visit. In 2007, Google announced new policy on
storage of server logs. They will be anonymized after 18-24 months instead of stored
indefinitely (part of the IP address will be removed and the cookie deleted). Article 29
Working Party, which represents European data protection regulators, made the most
significant intervention in 2007 by stating: “at the end of a search session no data that
can be linked to an individual user should be kept stored unless the user has given
explicit, informed consent”. In certain circumstances, IP address, cookie, search queries,
server logs all can be considered personal data. Google has then shorten the retention
period of server logs to 18 months, but changed nothing else because Google is obliged
to store data (Data Retention Directive), to help improve services and to avoid fraud and
abuse. It is a bit unfair that Working party concentrates solely on Google.

On the other, hand there is a strong reason to trust Google that they are able to protect
the data. Since the inception of the AdWords program in 2002, Google experienced a
409% growth rate in 2002, and a 234% growth rate in 2003, and these numbers indicate
the importance of the AdWords program in Google’s business model (Yu Lim, 2007). If
Google were to violate customers’ trust by not securing properly their data, it would
have an irreversible impact on their whole business.

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5. Principals and Indicators of Google AdWords
This chapter explains what Google AdWords is and the way it works. Important terms
are described for a better understanding of the model created in Chapter 7 and used in
the practical part of this thesis (Chapter 8).

Google AdWords is Google’s advertising program that allows advertisers to create and
manage their online campaigns. It is based on selecting keywords related to the
advertiser’s business and setting a bid the advertiser is willing to pay for each keyword.
Once a searcher looks in Google search engine for a term, which is set as a keyword of a
campaign, in addition to the organic search results, a sponsored link, which is the
advertisement, will be displayed. Advertisers do not pay for displaying their ads, but only
when someone clicks on their advertisement. That is why this kind of advertising is
called “Pay per Click” (PPC). As an equivalent name to PPC advertising “SEM” is
sometimes used, which means Search Engine Marketing.

When a searcher clicks on an ad, advertiser pays this click and the searcher is directed to
a predefined page on advertiser’s Website. This page is called a landing page and it is
usually created only for the reason of advertising. Landing pages should be tailored to
make Website visitors do what advertisers want. This most wanted behavior is called
conversion (e.g. purchase, registration). Conversions are the indicators of success. It is
necessary to track them to be able to measure return on investment from a campaign.
The second most important factor for campaign results evaluation is cost. How much do
advertisers pay per click? They set the maximum price they are willing to pay per click
for each keyword separately. One would expect that an advertiser, who is willing to pay
more, gets the ads displayed on a better position (higher on the page). That is only a half
of the truth. Google needs searchers to be satisfied with the search results they get to
keep its business going. Therefore, Google rewards relevance by better prices. Also,
advertisers pay lower prices than those they set as maximum. These principals are
explained in detail in Subchapters 5.2. and 5.4.

AdWords offers two different networks where the ads can be displayed – search network
and content network. The search network are result pages of Google search engine,
while the content network includes Websites that accept Google ads showing up on them
and they are content related to the ads. Text ads are the only form of advertisement that
can be displayed on the search network. When using a content network, image, mobile
and video ads can be used in addition to text ads. This paper is focused on the basic form
of AdWords, which are the text ads.

5.1. Pricing – the Big Advantage

Available types of pricing are the key, which provides online advertising with a certain
advantage over the other forms of marketing. When a product is advertised on TV or in
newspapers, it can be only roughly estimated how many people noticed the ad, how
many were interested in the product, if the ad reached the right audience and finally - if
people bought the product thanks to the ad.

23
When online advertising was born, some publishers charged a fixed fee for ads to appear
on a web site, while others used cost per mille (CPM). CPM is cost of displaying an
advertisement one thousand times. In 1996, LinkStar introduced cost per click (CPC)
pricing for search advertising and by 1997, DoubleClick was offering cost per action
(CPA) pricing (Fain and Pedersen, 2006).

As already mentioned, Google AdWords uses CPC pricing, which means that an
advertiser does not pay for the ads to be displayed (so called impression), but only pays
when somebody clicks on an ad. What are the advantages? The advertiser targets the
right audience, because ads are displayed only to people who search for advertiser’s
keywords or are browsing content related websites. Advertisers can set how much they
are willing to pay for a click and see exactly how many people saw each ad and on which
ads they clicked. An advertiser can track if people bought a product thanks to Google ads.

Pay per action can be used for “offline” advertising as well. Then conversion could be for
example a call to certain phone number or voucher from a magazine used for getting a
discount. Google AdWords offers the possibility to insert a tracking code into an
advertiser’s Website and tagging a page, which finalizes conversion process (e.g. “Thank
you for your order” page). Advertisers do not have to manually keep tracking the number
of calls they received or collecting the vouchers used. Everything is automatically tracked
in an AdWords account and therefore it is very convenient and time saving.

Some interesting examples were published in The Economist (2006). For instance, the
average cost to an advertiser from one combination of consumer’s query in search and a
subsequent click is 50 cents, which corresponds to a CPM of $500; by contrast, the
average CPM in traditional exposure media is $20. A consumer’s action, in other words,
is 25 times as valuable as his exposure. In 2004, The Economist stated: “The response
rate from people clicking on paid links can be as low as 1% — about the same as direct
mail, which remains one of the biggest forms of advertising. But there is an important
difference: Internet advertisers usually pay only if someone clicks on their link. This is
the equivalent of paying for the delivery of junk mail only to households that read it.”

A problem with PPC advertising is so called click fraud, which has been introduced in
Chapter 4 – Trust in search engines. Nonetheless, PPC remains much more efficient than
traditional marketing and is the fastest growing segment of the online advertising
market (The Economist, 2006). In addition to effectively reaching the target audience,
Google AdWords provides advertisers with built-in market research that can be used to
modify campaigns quickly and easily (Stibel, 2009).

5.2. Quality Score

Every keyword gets a quality score from Google, which ranks from 0 to 10, with 10 the
best score. The quality score is dependent on inter-relevancy (among the keyword,
advertising text and a landing page) and on the click through rate (CTR, Subchapter 5.6.).
The exact way the quality score is counted is a big secret of Google. The quality score
directly affects prices of clicks. It is one of the most important indicators, which has
impact on the return on investment for AdWords campaigns, and it also can grant
advertisers a competitive advantage.

24
Besides the quality score of keywords, which is displayed in the AdWords account
interface, there is a quality score of the whole AdWords account. The data are kept in a
Google account history even though a keyword or a campaign has been deleted. In the
case that some campaigns in the past were not particularly successful, setting up a new
account should be taken into consideration. That can assure that bad historical data do
not affect current prices negatively.

High quality scores can be reached by including the same keywords in advertisements
and on landing pages. Usually a keyword – which is a page title of the landing page, is
mentioned a couple of times in the content of landing page as well as in advertisement –
would get a high quality score. But it is a dynamic factor, which changes in time also
depending on the click through rate of the advertisement.

5.3. Ad Rank

Ad rank is a value of an advertisement, which determines the position the ad will be

displayed at. The highest displayed position is 1. The higher the ad rank, the higher in
the search results the ad will be displayed. Ad rank can be counted out of the maximum
CPC, which is set manually by an advertiser for each keyword, and the quality score of
the keyword, which is granted by Google and based mainly on the relevance.

Formula 1: Ad Rank

Ad rank = (Quality score of keyword * maximum CPC of keyword)

Source: Google AdWords (Beck, 2009)

This formula shows that the higher price which advertisers are willing to pay, does not
grant them the certainty they will be displayed within the top results. Actually,
advertisers with highly relevant ads can have their ads displayed on a higher position
than those who offer more money, but do not pay attention to the quality of advertising.

5.4. Real Paid Cost per Click

How does Google count the price advertisers pay, while they only set a maximum price,
which is usually not reached? The real paid price for a click is counted as follows:

Formula 2: Real Paid CPC

CPC = (Ad rank of advertiser placed under you / your keyword quality score) +1
cent
Source: Google AdWords (Beck, 2009)

Of course, advertisers do not know the ad rank of an ad placed under theirs in the search
results. It can be a different ad each time. Thus, the real paid cost per click is a dynamic
factor as well, and changes over time. The formula above explains that AdWords ranking
principal is not a simple auction; if a particular ad is highly relevant, advertisers can pay
less for being displayed on a better position than their competitors.

25
 5.5. Impressions and Impression Share

Number of impressions is the number of times an advertisement has been displayed. If

the keyword list is well established, the number of impressions indicates the size of
potential market online. If nobody searches for particular keywords, there is no online
demand for the product or service. In addition, AdWords offers information about so-
called impression share. It is a ratio showing how many impressions a keyword got out
of all possible impressions. For instance, impression share of 80% means that out of 10
searches, the keyword has shown the ad eight times. Advertisers can also find out why
the impression share is not 100%. There are two reasons shown and counted in an
AdWords account. Impression share lost due to insufficient budget – when the daily
budget is spent prematurely. The second reason is too low ad rank. In that case, ads
could be displayed more times if the maximum CPC or the quality score would have been
higher.

5.6. Clicks and Click Through Rate

The number of clicks equals the number of visitors coming to a Website thanks to Google
ads. A click is the action that is paid in AdWords. It defines the cost. Advertisers should
not focus on getting as many clicks as possible, but on getting the right audience, thus as
many conversions as possible.

CTR is the ratio of displayed ads that were clicked through. It is one of the key
performance indicators of successful optimizing, because it can express to an advertiser
whether the right keywords are used and if ads are tempting enough to be clicked
through. The higher CTR the better. Google reflects high CTR in the quality score, and so
rewards it by better prices. High CTR means high relevancy of keywords and ads for
searchers.

On the other hand, advertisers are simply not capable to name all possible keywords that
could be relevant for their business. That is why they can use different keyword matches
(Subchapter 7.2.5). This gives them an opportunity to see what users are searching for
and to target a larger audience. There are cases when highly specified keyword could
mean a loss of relevant impressions. Then it is better to specify the ad to avoid clicks that
would never lead to a conversion, than to increase CTR with clicks which are increasing
cost and lead visitors to irrelevant content.

5.7. Conversions and Conversion Rate

Number of conversions is the most important indicator that has to be tracked to assess
the success of online campaigns. It is the number of visitors coming from AdWords ads
to an advertisers´ Website who have done the most wanted behavior – a conversion. It is
necessary to know this number when measuring return on investment for advertising.
Conversion can be defined as purchase, newsletter sign up, registration, submitted form,
questions raised and so on.

26
Conversion rate (CR) is the ratio identifying how many Website visitors came through
AdWords and really converted. CR can be also expressed as the ratio between CPC and
CPA.

Nevertheless, some sources claim that conversions are not always the most important
factors. “Search marketing does not always have to be about conversions. A well-planned
campaign can reinforce the value of your brand” (Stibel, 2009). The same belief is shared
by Fain and Pederson: “If the goal is brand awareness, it is sometimes sufficient to see an
ad without clicking” (2006). This is a matter of advertisers´ perspective. If they wish to
increase brand awareness, they could consider impression to be their conversion. This
approach is also followed in the practical part of this thesis.

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6. Measuring the Return on Investment

Every advertiser would like to reach high return on investment from online campaigns.
Nevertheless, for many businesses, measuring ROI is still a black box. This chapter opens
this black box and shows one of the ways ROI from Google AdWords can be counted. The
formulas theoretically described in this chapter are used in the practical part of this
thesis. The model introduced in this thesis considers ROI as a success indicator of online
advertising, and ROI measuring as an integral part of itself.

Return on investment is usually expressed as a percentage. The result is good as long as

the percentage is positive, and the higher it is, the better. Return on investment for
advertising campaigns can be counted in a following way:

Formula 3: Return on Investment

ROI = ((turnover - total cost) / cost of campaigns)*100

Source: Google AdWords (Beck, 2009)

Based on the result advertisers can answer following questions:

 Was my campaign successful? ROI > 0 means that it was

 Was my optimizing successful? ROIterm1 < ROIterm2 means that it was

Where term 1 precedes term 2 from time perspective.

Advertisers should count ROI for the first time approximately three months after
launching campaigns, because two to three months are necessary for optimizing new
campaigns (depending on campaign complexity and level of advertiser’s experience). Jeff
Stibel summarizes: “If you track and fine-tune your ads as needed you should start to see
optimal results in about 90 days. It will take another six months or so before things
stabilize which will allow you to easily manage the campaign” (Stibel, 2009). Then ROI
from campaigns should be measured every quarter of a year to watch the trend and to
see if further optimizing has had positive impact on ROI.

Formula 3 can be expressed in the naming standards of Google AdWords as follows.

Formula 4: ROI in AdWords Naming Standards

ROI = {[(Q * R) – (Q * C) – AC] / AC} * 100

Source: Author

Where:

Q = Number of conversions
R = Revenue from 1 conversion
C = Cost spent on 1 conversion (exclusive AC)
AC = Cost spent on advertising

28
These elements are further explained in the following sub-chapters focusing on ROI from
campaigns and ROI from keywords.

6.1. Return on Investment from Campaigns

ROI of an online campaign shows to advertisers whether their campaign was successful,
whether it has brought any additional value to their business, and thus, whether it was
worth doing. ROI can be counted with the help of the adjusted formula 4:

Formula 5: ROI from a Campaign

ROI = {[(∑nX=1 QX * RX) – (∑nX=1 QX * CX) – AC] / AC} * 100

Source: Author

Where the symbols mean

ROI = return on investment of a campaign

AC = AdWords cost spent on a campaign
QX = number of conversions X acquired thanks to a campaign
CX = cost of conversion X
RX = revenue from conversion X
X stands for a particular conversion (e.g. registration). A campaign can lead to n
different conversions. X = 1…n

The formula can be split into following parts:

Total revenue from conversions: R = (∑nX=1 QX * RX)

Total cost of conversions: C = (∑nX=1 QX * CX)
Gross profit = R – C
Net profit = gross profit – AC
ROI = (net profit / AC) * 100

Total revenue from conversion is the total income an advertiser gets thanks to the fact
that Website visitors converted. For instance, if the Website visitor bought a product for
$1,000, total revenue from the conversion is $1,000. Total cost of this conversion would
be all cost spent on this product by advertiser except advertising cost. It includes cost of
production, packaging, etc. Gross profit is the profit the advertiser would get if there
were no costs of advertising.

Advertisers can measure ROI in the same way for each ad group separately as they do for
a campaign, to find out which parts of a campaign are more or less successful. Ad groups
and the structure of AdWords account are described in Subchapter 7.2.2.

6.2. Return on Investment from Keywords

Why should advertisers count ROI for each keyword (ROI KW)? To see the impact
individual keywords have on ROI of a campaign. Based on that, advertisers are able to
take good decisions on which keywords to keep and which should be deleted. Moreover,
29
thanks to the known ROI from keywords, advertisers can better address changes in total
ROI to specific changes in campaigns. It helps answer questions like, “Why is ROI of this
campaign worse than last year?” Usually there are many changes in a whole campaign
during a year, but each change can only hardly have an impact on all keywords. ROI of a
keyword can be counted by adjusting formula 4; this formula assumes that each
keyword leads to one conversion only.

Formula 6: ROI from a Keyword

ROIKW = {[(Q KW * R) – (Q KW * C) – ACKW] / ACKW} * 100

Source: Author

Where the symbols mean:

ROIKW – return on investment of a keyword

ACKW – AdWords cost spent on a keyword
Q KW – number of conversions acquired thanks to a keyword

6.3. Conversions without Explicit Revenue

The formulas described in this chapter always mention “revenue from conversion”. That
is easy to express for conversions that are purchases. It is harder to say what revenue
advertisers get from, for example, sign up to a newsletter or registration on a Website. In
these cases, fixed values have to be assigned to one conversion. Example given by Beck
(2009): if 100 questions from users related to products result in one order of average
size 200 EUR, the conversion value is 2 EUR (size of average order / number of actions).

30
7. Model of Optimizing the Return on Investment

The model described in this chapter is a synthesis of theoretical principles of Google

AdWords, measuring return on investment according to Chapter 6, information gathered
from electronic resource databases research and practical experience. This model will be
applied to optimize the campaigns in the practical part of this thesis.

Optimizing the ROI for online advertising is an ongoing process. The model illustrated in
picture 1 consists of four main phases: Campaign Creation, ROI Measuring, Campaign
Analysis and Campaign Optimization. All steps except campaign creation are repetitive in
time. Besides the four main phases, there is an additional one called Environmental
Analysis, which can be seen as a background process of all activities and should be taken
into account when creating and analyzing campaigns.

Picture 1: Model of Optimizing ROI

Source: Author

7.1. Environmental Analysis

Before creating the first campaign there are some factors to be considered.
Environmental analysis can be seen as a kind of SWOT analysis, which is defined by
Armstrong and Kotler (2008) as “an overall evaluation of the company’s strengths (S),
weaknesses (W), opportunities (O) and threats (T)”. With a little modification –
environmental analysis is not overall analysis in this case, but it focuses exclusively on
the area of online marketing. The investigated factors are called market and company
specifications. After analyzing these factors, companies should be able to uncover the
strengths, weaknesses, opportunities and threats to their businesses from online
advertising. This analysis will help advertisers set targets of the campaigns and avoid
possible mistakes.

External analysis could be called the analysis of market specifications. It evaluates online
opportunities and obstacles in a particular market. For example, there are different
31
speeds of Internet connections in different countries; data security approaches differs
from country to country as well. At the moment, it is a hot topic in Germany, where
companies have to pay a fee if they use Google Analytics tracking code, which does not
encrypt IP addresses (Internet World, 2011), while, on the other hand, they are allowed
to advertise products and services by using competitors’ brands. There are markets
where almost everybody has a personal computer, but those where computers are
hardly used. In some markets people are used to purchase online using credit cards, in
other markets people prefer paying cash on delivery. All these factors have to be taken
into account before creating campaigns and setting targets. Besides that, competitors’
activities online should be investigated. Furthermore, advertisers have to keep
themselves informed and be ready to apply possible changes in the market specifications
to their existing campaigns.

It is necessary to keep in mind company specifics as well, because online campaigns have
to be aligned with overall strategy, marketing strategy, with already existing goals of the
business. Thus, the second part of environmental analysis – internal analysis - should
briefly describe strategies, marketing activities and online marketing activities a
particular company does.

Because the specifics can change over time, it is not enough to make the environment
analysis only before a campaign is created. The specifics should be reviewed also in the
phase of existing campaign analysis. And in case the changes are causing the need of
adjustments of the campaigns, they can be applied in the stage of campaign optimization.

7.2. Campaigns Creation

The phase of creating campaigns consists of target definition and actual creation of a
Google AdWords account, campaigns, ad groups, advertisements, keywords list as well as
setting up a daily budget, target geographic area, language, network and devices to
display the ads on and the bids for keywords.

7.2.1. Targets

An important strategic decision that must be taken at the beginning of the advertising
process is to choose which products or services will be advertised, for how long, what
the advertiser is willing to spend and what the advertiser expects to get out of the
advertising (targets).

Targets of campaigns must be kept in mind during the whole process of optimizing. For
instance, an advertiser could broaden geographic location of displaying ads to increase
the Website traffic. But, if the target is to sell more products, the advertiser has to think
how shipping costs will affect the prices. If they increase the prices significantly,
customers might rather order from a competitor, which is closer. In that case the
advertiser would pay for increased Website traffic, but without any additional purchases.

Before creating a campaign, targets have to be transferred into conversions, so that it is

possible to track them, and advertisers should think of the revenue from these

32
conversions. The revenue must be clear if they want to be able to measure return on
investment later.

7.2.2. Google AdWords Account

The Google AdWords account can be set up in a couple of minutes by using any e-mail
address. Advertisers should be aware, that currency and time zone they set while
creating the account is permanent (can’t be changed later).

The structure of the account consists of four different units (campaigns, ad groups, ads
and keywords). When applying hierarchy, it looks as follows:

Account -> Campaigns -> Ad Groups (Ads) -> Keywords

There are some limits of a maximum number of different items from Google´s side, but in
practice they are hardly ever reached. According to Google, an AdWords account has to
meet following maximum limits:

 25 campaigns
 2000 ad groups per campaign
 2000 keywords per ad group
 50 ads per ad group (any format)
 About 50,000 keywords per account

7.2.3. Campaigns

Each campaign has its own daily budget, language settings, geographical location,
network and devices where ads will be displayed. Based on that, advertisers can decide
on how many campaigns they actually need.

7.2.4. Ad Groups

Ad group is a group of particular ads and keywords that are meant to be together. When
a searcher looks for a keyword, ad from the same ad group to which the keyword
belongs will be displayed. Ad groups are important, because they help to reach high
relevance between keywords and ads. If an advertiser creates only one ad group in a
whole campaign, all keywords would be assigned to the same ads. To make the ad
relevant, the advertiser has to add keywords in the advertising text. While each ad is
limited by maximum number of characters, it would be impossible to create a relevant
ad for more keywords. That is why advertisers have the possibility to split their
keywords into ad groups and create ads for the ad groups separately.

Ad groups, keywords and ads are interrelated. They have to all be created at the same
time. The best way is to start with a basic keyword list for one product or service and its
competitive advantages. This list can be then divided into groups trying to reach as high
relevance as possible.
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 7.2.5. Keywords

When adding keywords to ad groups, one out of four available matches has to be
selected for the keyword. These matches are – broad, phrase, exact and negative. If broad
match is used, advertisement will be displayed when searched for different variations of
the keyword including plural and synonyms (based on what Google considers being
synonyms). Phrase match ensures that the exact keyword was searched, but there can be
something added in front or behind the keyword (e.g. the keyword is ‘hammer drill’, then
a term ‘hammer drill bit’ will result into displaying the ad, but ‘drill hammer’ will not).
Exact match only shows the ad when the keyword is exactly the same as the searched
term. The last match to be mentioned is negative match, which avoids displaying the ad
when the keyword is used (e.g. ‘cheap’, ‘used’); it can also be used to exclude competitive
brands. It is good to start with keywords in broad match, because advertisers can
discover new ideas based on different search queries used by website visitors, but
during optimizing advertisers should specify their keywords and thus avoid excessive
cost by limiting irrelevant audience to click on the ads. They should use broad match
only when it really makes sense, because it is impossible to list all different keywords.

Advertisers set a maximum price they are willing to pay for each keyword. They should
always start with low bids and increase them if the ad is displayed too low in the results.
The minimum CPC that can be set in currency USD is $0.01. Other currencies can be
found on the Google Website. Google notifies advertisers when their bid is too low and
thus their ads do not show on the first search result page. In that case the notification
also contains the information what the necessary bid is to display the ads on the first
page.

Specific keywords or terms consisting of more words are cheaper, because there is lower
competition. Google does not differentiate capital and small characters in keywords and
does not consider dashes. It offers a keyword tool to advertisers to give them an idea
about new possible keywords. Keyword tool displays different variations of existing
keywords and synonyms; advertisers can also insert the Web domain into the tool and it
will display related keywords based on the Website. Another tool – traffic estimator –
provides the estimations for each keyword and bid of how many clicks will be
approximately reached a day.

Before adding keywords to the keyword list, it is very important to check the organic
results the keyword makes. It is not necessary to pay for clicks that can be acquired for
free by organic search. Advertisers have to check organic results on a regular basis,
because they change in time and AdWords campaigns usually bring the organic results
linking to advertisers Website higher.

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 7.2.6. Ads

There are some rules that limit the creation of ads in Google AdWords. An ad consists of
four rows - heading, two text rows and a link. All of these are restricted by maximum
number of characters. Advertisers can use an exclamation mark only once in each ad and
it cannot be in ad headings. Superlatives, directly repetitive words and caps are not
allowed. Moreover, if advertisers want to promote a particular price or discount, it has to
be confirmed within two clicks on the Website. While ads can be displayed above the
organic search as well, the two text rows might be put together and make one row only.
Therefore, advertisers should think about using punctuation. When an ad contains a
keyword that was just searched, this keyword will be displayed bold in the
advertisement. That attracts searchers to click even more. This is another reason why it
is good to use keywords in advertising texts.

If an ad does not meet the requirements, it will not be displayed and Google notifies the
advertiser.

To see which ads attract searchers the most, advertisers should create different ads in
each ad group and choose in the campaign settings an option “show ads more evenly”.
That allows advertisers to compare click through rate of the ads and optimize them later.

7.2.7. Landing Pages

The landing page is a page on the advertisers Website where people are directed after
clicking on an ad. Visitors should find on this page what was promised in the ad and it
should clearly lead to the most wanted behavior (conversion). It is helpful to avoid using
different links and banners that drive visitors’ attention away from the actual
conversion. When the title and headings on a landing page contain keywords, the
keywords will get higher quality score and therefore a lower price. Advantages should be
presented on a landing page avoiding too much scrolling and information overload;
content should be written in short sentences and include call-to-action. The conversion
process should not require too much clicking from the users. Each click which is
required looses a certain amount of visitors.

There are some rules set from Google: a landing page has to be active page (not for
example a pdf file), it has to allow visitors to go back in the browser; it can not be
directed to e-mail or a database with files that require a special program to open and
there can be no pop ups.

To be able to optimize landing pages, advertisers should create different landing pages
leading from the same ads to the same conversion. Then they can compare conversion
rates of different landing pages and identify which landing page was the most successful.

35
 7.3. Analyzing and Optimizing

To be able to optimize well, advertisers have to keep tracking the changes they are doing.
For instance, they could create a file where they note all changes they have done with an
exact date. If advertisers use Google Analytics, it offers a great solution by adding
comments for every day which appear straight in the result charts. This allows them to
see the real impact of individual optimizing steps.

New campaigns require a lot of time for optimizing during the first month – especially
for establishing optimized keywords list.

7.3.1. Optimizing Keywords List

Basically the “only” options for optimizing the keywords list are: adding or deleting
keywords, assigning different matches to keywords, increasing or decreasing bids (CPC)
for keywords.

7.3.1.1. Keyword Bid

The optimal keyword bid is a dynamic factor. When advertisers find the optimal bid it
does not mean that it is optimal forever. It can be moved by competitors’ actions, by
changes in quality scores, by customers’ behavior, etc. If advertisers analyze the bids of
optimized campaigns once in a year quarter (when measuring new conversion rate), it is
enough. But to find “the first optimum” after creating a campaign requires some time.

What is the optimal bid for a keyword? It can be defined as the bid that leads to the
highest return on investment for a keyword (ROI KW).

First of all, advertisers have to set up a range CPC can move within. The range is
determined by the lowest (CPC MIN) and the highest (CPCMAX) CPC possible for each
keyword. By paying CPCMAX advertisers make no profit, when CPC is higher, they make a
loss. It means that CPCMAX is the upper border of CPC. CPC MIN is the minimal bid showing
ads on the 1st search result page; it is the bottom border of CPC. Advertisers look for
optimal CPC, which is positioned somewhere in between of CPC MIN and CPCMAX:

Formula 7: Optimizing area of CPC

CPCMIN ≤ CPC ≤ CPCMAX

Source: Author

How is it possible that CPC can be equal to CPC MAX? As it was mentioned in the
Subchapter 5.4., advertisers rarely pay the CPC they set as a bid. They can expect that the
real paid CPC is lower than CPC they offer. Therefore even though CPC = CPC MAX,
advertisers will still make some profit.

36
Finding out CPCMIN

Advertisers should start with the lowest default bid possible for each keyword (e.g.
$0.01). Therefore, a message from Google “Your bid is below 1 st page bid” will certainly
appear for the vast majority of the keywords. This message also uncovers the lowest bid
to display the ads on the first result page (CPC MIN). Unless this message appears, the
default bid can be considered being CPCMIN.

CPCMIN can change in time. If a couple of competitors start advertising the same keyword
and their ad ranks are higher, it will become necessary for the first advertiser to pay
more to stay on the first result page. Thus, the CPCMIN for the advertiser increases.

Google will always inform advertisers that their bid is below the first page bid, so they do
not have to check this. But, they have to keep an eye on the option that CPC MIN could also
decrease! That can be recognized thanks to the indicator “average display position”. If
advertisers do not change the bid and suddenly ads show on a better position (lower
number), they can try to decrease the bid slightly cent by cent and watch the results.

Finding out CPCMAX

During the first month advertisers do not have sufficient data to count ROI for keywords,
which is the determinant of CPC MAX. They do not know the conversion rate (CR). Thus,
during that time period, a “benchmarked” CR of 2% can be considered (Stibel, 2009).

After each three months of advertising, the real reached CR should be considered for all
keywords and CPCMAX re-counted. It might happen that some keywords will get data
representative enough already during the first month. In that case, after the 1 st month
advertisers should rather use the average CR reached by other keywords in the same ad
group than the benchmarked 2% rate.

CPCMAX can be counted using the formula 4:

ROI = {[(Q * R) – (Q * C) – AC] / AC} * 100

CR of 2% means that there are two conversions (Q=2) out of 100 clicks. AdWords cost
(AC) can then be expressed as CPC multiplied by 100 clicks. CPC MAX is the bid leading to
no profit and no loss, which means that ROI is zero. Then the formula can be adjusted as
follows:

0 = (2*R) – (2*C) – (100* CPCMAX)

100*CPCMAX = 2*R – 2*C
CPCMAX = (2*R – 2*C) / 100
CPCMAX = (R - C) / 50

Therefore, for the benchmarked CR of 2%, advertisers can count CPC MAX as:

Formula 8: Maximal CPC for default CR

CPCMAX = (R - C) / 50
Source: Author
37
CPCMAX stays the same unless R, C or CR changes.

Applying CPCMAX and CPCMIN

Now, advertisers know the boarder values of CPC. If CPC MIN ≤ CPCMAX, advertisers should
increase CPC from the default bid to CPC MIN. What to do when there is a keyword for
which: CPCMIN > CPCMAX? During the first month advertisers should wait and make no
changes to the keyword. As soon as they know the real CR of keywords from the same ad
group, they can apply it to counting out new CPC MAX. If the new CPC MAX is still lower than
CPCMIN, advertisers have to delete the keyword. It would not deliver them any profit.

Finding out Optimal CPC – Indicators CTR and displayed position

After setting CPCMIN for keywords, there is a space between CPC MIN and CPCMAX for further
optimizing. Conversion rate shows the ratio of people who converted after clicking on
the ad. But of course advertisers can sell more if they bring more people (relevant) to the
Website. If the conversion rate is 2% and 100 people click on the ad, there will be two
conversions. If the number of clicks rises to 1,000, the number of conversions will be
increased to 20. Let’s consider the number of impressions given. Then, the higher click
through rate (CTR), the more conversions will be reached. Moreover, high CTR also has a
positive impact on quality score (therefore prices).

How to increase CTR by bidding? Bids have an impact on average displayed position. And
the average displayed position affects CTR (see picture 2).

Picture 2: Cost per Click Optimizing

Source: Author

Ads on the best positions are clicked through more often than ads on bad positions.
What is a good position? It can be dependent on the industry, product and also on the
type of conversion. Generally, of course, the highest positioned ads are clicked through
the most. But they are generally more expensive. Advertisers can also ask whether these
visitors really convert. There are many different opinions and every advertiser has to
test which display position brings the highest CR. In most cases, the position 1 is really
too expensive and it is worth decreasing the bid. Advertisers can accept these simplified

38
statements during the 1st month of advertising. Later, they should analyze which
positions ensure them the highest CTR and CR. But CPC should never exceed CPC MAX.

How can advertisers analyze what is the best position? Besides general statistics
available in AdWords account, they can run “impression share report”. This report shows
how many clicks are lost due to too low rank. In other words, it tells advertiser how
many clicks have been lost because of searchers clicking on ads with higher rank (most
probably ads displayed above the advertiser’s ad). Ad rank can be increased in two ways
– by raising CPC or quality score.

Besides the ranking information, the impression share report shows how many clicks
are lost due to insufficient budget. Advertisers can see how much potential stays unused
because of insufficient daily budget and can increase it accordingly. But it is important
not to do this before the first round of optimizing, because keywords and cost do change
during the process. Recommended time to run this report for the first time would be
after two or three months from campaign launch.

7.3.1.2. Keyword Match

When a campaign is launched, advertisers basically start with all keywords in broad
match. It allows them to investigate the real search terms. Match optimizing should be
done after collecting enough data about search terms. The number of clicks and also to a
certain extent impressions represent it. Latest it should be done after the 1 st month of
advertising, but as soon as there are tens of clicks, analysis should be done to avoid
paying for clicks that do not lead to conversions. Advertisers run a “search terms” report
in the AdWords account. There they can see which terms brought visitors to the Website
for each keyword. Based on the report, advertisers can add, delete, change keywords and
use different matches (Subchapter 7.2.5.). Unfortunately they cannot find out which
terms were searched, when ads were not clicked through, but still it gives advertisers a
better idea of their target group searching behavior.

The first warning sign is a keyword with very high number of impressions and very low
CTR (lower than 1%). It means that the ad was either shown on a bad position (which
should not happen after optimizing the bids) or people were actually searching for
something else, so they did not click (low relevance). When advertiser sees this, search
term analysis should be done immediately.

Searched terms with CTR lower than 10% in the search terms report should be analyzed
first. The first question to be asked is “Is the searched term relevant to my campaign?” If
the answer is no, the related keyword has to be specified - to avoid displaying in the
same cases - by using phrase, exact or negative match. In case the search term is
relevant, advertisers should check if the keyword already exists in the same variation as
searched. If not, the keyword should be added to the list (but advertisers should check
organic search results first (Subchapter 7.3.1.3.). In case the keyword exists, a bad
advertising text might be the only reason for low CTR, because displayed position has
been already optimized (Subchapter 7.3.2.).

39
 7.3.1.3. Organic Search Results
When creating as well as optimizing the keywords list, advertisers should have a look at
the terms in organic search. As soon as it is not necessary to advertise the keyword, it
should be added to negative keywords even though it is relevant – advertiser will not
lose the visitors, because they will click on the organic result anyway – and it is for free.
By launching AdWords campaigns organic search is affected as well. It might happen that
a keyword which had no organic result, gets on the top organic positions after launching
the campaign. Organic search should be checked on a regular basis, e.g. every three
months.

7.3.1.4. Expensive Keywords

It can happen that there are keywords which spend the daily budget of a campaign
without giving a chance to other keywords in the campaign to be searched. If advertisers
find these kinds of keywords, they should create a new campaign for these keywords
only with its own budget.

7.3.1.5. Number of Impressions

Once in a month advertisers should check how many impressions each keyword has
received. If it is zero, nobody looks for it and it can be deleted. But first it should be
checked whether the budget is consumed by other keywords (previous chapter).
Another reason for no impressions could be seasonality. For example, snowboards would
have a lot of impressions in winter, but hardly any in summer. In that case, advertisers
can just pause the campaign and switch it on as soon as the season starts.

7.3.1.6. Number of Conversions

If a keyword does not bring any conversions during three months (other keywords in the
same ad group do), it should be deleted. If whole ad group brings no conversions,
advertisers should focus on improving advertising texts.

7.3.2. Optimizing of Advertising Texts

There are two performance indicators of ads – click through rate (CTR) and conversion
rate (CR). CTR shows which ad is more attractive for searchers; CR shows which ad is
more attractive to convertors (e.g. customers). People would for sure click on ad
promising an extremely good price for a flight ticket, but what would happen if the price
increases significantly during adding luggage, administration fees, etc? Potential buyers
would leave the website. CTR tells advertisers if their ad is tempting enough to be clicked
through; CR tells advertisers which ads reach their targets better. If there are
discrepancies between CTR and CR, the reason had to be investigated. High CTR in
combination with low CR usually means that there something was promised in the ad
40
which was not delivered, or the text was not specific enough and searchers were looking
for something what advertiser does not really offer, hoping they will find it through the
ad. Low CTR in combination with high CR means that the ad is good at attracting the
target group. The problem probably lies in keywords. Ads are shown to people who
actually searched for something else. So advertisers should go back to the keywords list
optimizing phase. Another reason could be lower attractiveness of the ad. Advertisers
have to make changes accordingly and evaluate based on results.

The best way to optimize ads is to create more of them for each ad group and compare
results. Advertisers can compare if their target group clicks on ads with call to action or
without; if they prefer clicking on “Find out more online!” or on “Boost your
productivity!”. It helps to test what kind of headings and displayed links are attractive for
customers. It can be simply tested by comparing which ads do have higher CTR and later
CR.

When advertisers consider their keywords list to be optimized, but the CTR is still low,
the problem must lie in advertising texts. They have to try to make them more attractive,
more specific, describe the advantages of advertised product or service. Ads should
contain the keywords, especially in the headings. When an ad is changed, the old one will
be deleted automatically and the new version will start with zero statistics. Anyway, the
deleted ads can always be found in the account within historical statistics.

7.3.3. Optimizing of Landing Pages

The easiest way to test the performance of landing pages is to lead the same ads to
different landing pages, track the visitors’ behavior and see how the type of landing page
affects conversions. Relevancy is a very important factor, it is cheaper to advertise a
keyword which is mentioned in ad text as well as repeated on a landing page.

In addition to conversion rates, advertisers can investigate the behavior of Websites

visitors. How long did they stay on the Website and on the landing page? What is the
bounce rate? Bounce rate shows the ratio of Website visitors who were brought by
AdWords but left the Website straight after seeing the landing page. What did Website
visitors do on the landing page – do they follow conversion path as advertiser
presumed?

All these questions can be answered by proper tracking and can lead to landing pages
being optimized and therefore to optimizing of return on investment.

41
8. Practical part – not public
9. General Recommendations to Advertisers

Define targets and conversions

Before advertisers launch their online campaigns, they should define their targets (and
from targets conversions). These targets do not have to be expressed as an exact number
or percentage. It is enough to define what they actually are - additional sales, additional
online sales, additional Website traffic, new contacts, new newsletter subscribers. As
soon as these targets are clear, advertisers should investigate current target group
behavior. If the Website converts already in the desired way, and advertisers would just
like to increase the number of conversions, they have to investigate current behavior of
Website visitors. What are they doing on the Website before converting? Why and when
do they leave the Website? What are they thinking about? Are they looking for quality,
for the best prices, for information, for quick order delivery? Is the relationship between
customers and company important? Are the visitors going to come back? And so on. The
more advertisers can find out about their target group the better. Based on this
information, advertisers should decide which products or services will be advertised,
what should be the main message in the advertisements, what are basic keywords ideas
and the structure of landing pages (steps leading to conversions). As soon as advertisers
establish this concept, it might be a good idea to ask a couple of existing customers for
feedback on it.

Find out value of conversions

Before launching campaigns, advertisers should make clear what the profit they get from
conversions is. That is not very difficult to find out for purchase – conversion, but if the
conversion is a registration, positive customer feedback or question submitted online,
advertisers have to think about the actual value this conversion brings them.

Count and Optimize Return on Investment

Advertisers should certainly count return on investment for their campaigns. Otherwise
advertising cost might lead them to losses. Besides that, ROI trend is a very good
indicator of success of implemented changes. Advertisers can use the model described in
this thesis to create, analyze and optimize AdWords campaigns, and to optimize step by
step the return on investment from online advertising. ROI does not have to be counted
very often. It is enough to do it every three months. The first level optimizing is
according to the model done constantly and the key performance indicators are click
through rate and conversion rate. Based on them - keywords list, advertisements and
landing pages should be optimized, which should lead to ROI optimizing as well. ROI as
an indicator is more strategic and is used as second level optimizing factor. Changes in
ROI can reveal weak points to advertisers in processes or in the whole advertising
concept. It also evaluates the total effect of the first level optimizing - ads, keywords and
landing pages - as a merged effect.

42
Track conversions by using Google Analytics

Google Analytics tracking program is for free if advertisers use AdWords (Clifton, 2009)
and very user-friendly. It offers unlimited space on Google´s server and allows tracking
detailed behavior of Website visitors as well as conversions in an easy way. During
intensive research performed for this thesis, there was no information found about data
leakage experienced from Google Analytics. Google Analytics also provide interface,
which allows advertiser to note all changes done during optimizing and then, in
combination with trends of different indicators, it is clearly visible which changes had
what effect.

Evaluate your optimizing

Key performance indicators of successful optimizing have proven to be click through

rate, impression share, cost per click and average displayed position. If optimizing was
successful, it leads to improving the scores of these indicators. These factors altogether
should also lead to higher conversion rate and return on investment. Otherwise, the
whole advertising strategy has to be revised.

43
Conclusion

The goal of this thesis, to find out a way to optimize ROI for online advertising, has been
accomplished by creating a general model and by verifying its functionalities on pilot
AdWords campaigns for Hilti Inc. Precedent approach of Hilti confirmed the findings of
PROMO survey (Jaffee, 2007) that companies do not count ROI because it is too difficult
or time-consuming. The model presented in this thesis helped to change this approach
by demonstrating ROI measuring and optimizing.

However, there were many obstacles in the way of counting ROI in this project. These
obstacles did not arise from the model itself, but from company environment. No
tracking by Google Analytics was allowed due to fear of information leakage. Therefore,
the behavior of Website visitors could not be tracked (Hilti uses different tracking
software, but has insufficient resources to create necessary campaign profiles). No prices
are showed online for new Website visitors, which is discouraging, as well as a double
process of registration and subsequent authorization to get to see the prices. Advertised
products were expensive and hard to sell without demonstration. A weak point also
appeared in handling requests received from the Website, because they have not been
followed up by Customer Service. Gross profit has been simplified when counting ROI,
because it was not possible to acquire the amount from ERP system. Most of these
difficulties have been already overcome or a solution has been proposed to Hilti.

The B2B environment has not really affected the campaigns probably because of the
advertised product range, which is primarily searched by business customers only. If
there were products or services advertised by keywords attracting both business
audience and consumers, for instance remark in the advertisements could avoid the
wrong audience clicking on it or different keywords selection. This problem area would
need further research.

Hilti AG is going to roll out the model suggested in this thesis into their market
organizations, implement an online strategy established from the results and follow up
on processes improvement. All three hypotheses that have been tested in this thesis have
been confirmed. Google AdWords campaigns:

 Increased Hilti Website traffic by 1-2 %. Based on the number of impressions and
clicks it can be assumed, that Hilti brand awareness has been increased too.
Therefore, the first target of the campaigns has been fulfilled, and the hypothesis
derived from it is verified.

 Increased sales of the advertised products. The tracking problem and the type of the
advertised products caused difficulties to assign a certain amount of sales to the
campaigns. These difficulties can be overcome by using the conversion “demo
request”. The sales of the advertised products during the campaigns have been
compared to the sales during the same months previous year, and the result was
clear – there were sold more pieces of the products when the campaigns were in
place. Thus, the second target was met and the second hypothesis confirmed. But, it
is necessary to use only “demo requests” as a conversion type in the future to
eliminate an impact of other possible factors on the sales results.

44
 Brought new customers. The campaigns acquired at least 3 new customers and
contact information of another 34 people, because they registered on the Website.
These people are potential customers of Hilti. Therefore, the third target has been
met as wel,l and the last hypothesis is verified too.

Due to insufficient time, it could not be tested if the model increased actual ROI, but it
was presented how to measure ROI and how to optimize indicators, which show the
result in a shorter time and which are the fundamentals of improving ROI (e.g. CTR and
CR).

The model of optimizing ROI, which is demonstrated in this thesis, can be used by any
advertiser (not only B2B). It provides a clear picture of advertiser´s online opportunities
and reveals room for ROI improvement. Of course there are not all possible situations
and problems described in this thesis, but the practical part offers solutions to above
mentioned obstacles and suggestions for further ROI optimizing.

45
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 List of Charts, Formulas, Pictures and Tables

Charts

Chart 1: Advertising spending by medium....................................................................15

Chart 2: Online Shopping Concerns.................................................................................. 18
Chart 3: US online advertising spending........................................................................18
Chart 4: American Construction Industry Outlook....................................................42

Formulas

Formula 1: Ad Rank.....................................................................................25
Formula 2: Real Paid CPC.............................................................................25
Formula 3: Return on Investment................................................................28
Formula 4: ROI in AdWords Naming Standards............................................28
Formula 5: ROI from a Campaign.................................................................29
Formula 6: ROI from a Keyword...................................................................30
Formula 7: Optimizing area of CPC...............................................................36
Formula 8: Maximal CPC for default CR........................................................37

Pictures

Picture 1: Model of Optimizing ROI.................................................................................. 31

Picture 2: Cost per Click Optimizing................................................................................ 38

Tables

Table 1: Indicators to be measured 2 weeks after campaign launch..................52

Table 2: Indicators before and after Optimizing..........................................................53
Table 3: Tracking Demo Requests..................................................................................... 58
Table 4: Tracked Orders........................................................................................................ 60
Table 5: Conversion Rates of Demo Requests...............................................................60
Table 6: Results of advertising Product Demonstration...........................................62
Table 7: Sales Results compared to Reference Period...............................................63

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List of Abbreviations

Avg Average
B2B Business to Business
B2C Business to Consumer
CHF Swiss Frank
CPA Cost per action
CPC Cost per click
CPCMAX Maximal cost per click
CPCMIN Minimal cost per click
CPM Cost per mille
CR Conversion rate
CS Customer Service
CTR Click through rate
Dec December
Demo Demonstration
ERP Enterprise resources planning
EUR Euro
HC Hilti Centre
HOL Hilti Online
IT Information technology
LP Landing page
Oct October
PMC 46 Combilaser
PPC Pay per click
PRE 3 Rotating laser
PS Pro Shop
PS 200 Ferroscan
PX 10 Transpointer
ROI Return on investment
SEM Search engine marketing
TS Territory salesmen
US American
USA United States of America
USD United States Dollar
WWWW World Wide Web worm

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 Appendix

Competition Analysis

Company Website AdWords Tracking

ITW http://itw.com/ No Urchin
Simpson http://www.simpsonanchors.com No Google analytics
/
Cooper http://www.tnb.com/ No Google analytics
Thomas & http://www.cooperindustries.co No Google analytics
Betts m/
Tyco http://www.tyco.com/ No Omniture
Erico http://www.erico.com/ No Google analytics
Anvil Star http://www.anvilintl.com/ No Google analytics
Makita http://www.makita.biz/ No No tracking
Stanley Black http://www.stanleyblackanddeck Yes Google analytics
& Decker er.com/
Fastenal http://www.fastenal.com/ Yes Google analytics, also
in shopping cart
Kamco http://www.kamcoboston.com/ Yes No tracking
Phd http://www.phd-mfg.com/ Yes Google analytics
Negwer http://www.negwer.com/ Yes Google analytics
Allied http://www.alliedbuilding.com/ Yes Google analytics
Bosch http://www.bosch.us/ No WebTrends & Google
Analytics
http://www.boschtools.com/ Google Analytics
Dewalt http://www.dewalt.com/ No WebTrends
Pacific laser http://www.plslaser.com/ No Google Analytics
systems
Source: Author

This analysis investigated whether competitors of Hilti used AdWords at the given time
(August 2010) and if they had Web analytics tracking code implemented in their
Websites.

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