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However, relevancy doesn't end with our search results. We also work to show the most relevant ads for every search query. This model works for users and advertisers alike: The more relevant the ads are, the more likely users are to click on your ads now and again in the future.

We measure relevancy for search and ads differently.

• For search results, relevance and ranking are automatically determined by over 100 factors, including Google's patented PageRank algorithm.
• For AdWords ads, the most important factor in relevance and ranking is the ad's quality, also called the Quality Score. This measurement is the strongest representation of how useful a user has found an ad to be and is central to the AdWords cost-per-click (CPC) pricing model.

Here's how it works: When you enter a keyword into your account, we look at the following factors:

1. Your Quality Score: We first determine your keyword's Quality Score. Your Quality Score is based on your keyword's clickthrough rate (CTR) on Google and the relevance of your ad text, keyword, and landing page.
   
2. Your minimum bid: Next, we give your keyword a minimum bid based on your Quality Score. Keywords with a high Quality Score are assigned a low minimum bid, and vice versa.
   
3. Your CPC bid: Lastly, we look at your CPC bid to determine your keyword state and ad eligibility to show on results pages.
   
   • If your CPC bid is the same or more than the keyword's minimum bid requirement, your keyword is eligible to trigger ads. It's assigned an active keyword state.
     
   • If your CPC bid is below the minimum bid requirement, your keyword won't trigger ads to appear. It's assigned an inactive for search keyword state.

To analyze your account performance quickly, check the following statistics:

• Keyword Analysis page: Check the Keyword Analysis page to get a detailed view about your keyword's performance ― including how Quality Score impacts your keyword and ad's performance, and how you can improve it. To launch this page, point your cursor over the magnifying glass icon beside any keyword in your account; then click one of the 'Details and recommendations' links.
  
• Keyword Status: View the Status column on the 'Keywords' tab of your Ad Group Details page. Your keyword status indicates whether or not your keyword is triggering ads to appear on search results pages. As mentioned, each of your keywords (except any negative keywords) is identified by a keyword state. Here's the full breakdown:
  
  • Active: Active keywords have a high enough Quality Score and CPC bid to trigger ads. There's currently little risk to your advertising exposure.
    
  • Inactive for search: These keywords don't have a high enough Quality Score and CPC bid to trigger ads on Google and the search network (although these keywords may still trigger ads on the content network). This means that the minimum bid is higher than your CPC bid.
    
  • Disapproved: These keywords don't comply with our Editorial Guidelines or Content Policy and won't trigger ads until you correct the problem.
    
  • Paused/Deleted: These are keywords you've paused or deleted. They won't enter the ad auction and therefore won't trigger your ads.
  
  To learn how to enable a keyword that isn't running, visit the Keyword Status troubleshooting topic.
  
  
• CTR Column: View the CTR column on your Campaign Summary page to see how well a campaign is performing. The higher the CTR, the better the campaign is probably doing.
  
• Minimum bids: Check your minimum bid by running a Site/Keyword or an Ad Performance report. Choose the Keyword Min CPC field to see how much you're bidding. You can also edit your CPC bid to see your minimum bid. A low minimum bid usually means your ad is performing well.
  
• Ads Diagnostic Tool: Point your mouse over the magnifying glass icon next to any keyword on your Ad Group Details page to see if that keyword is showing ads. This provides a quick way to see if active keywords are showing your ads, and if not, the reasons why. To learn more, visit the Ads Diagnostic Tool lesson.

Visit your email account, and open the email verification notice from AdWords. Click the link in the email to verify your email address and access your account. Then, continue with the activation instructions.

Click on the link in the message, or click on the My Account tab and then Billing Preferences in your AdWords account to enter your billing information. If you're using a credit card or debit card, be sure to enter the billing address that matches the credit card.

Your ads will appear on Google after you've entered valid credit card or debit card information. In the case of direct debit, a debit authorization may have to be received and processed before your ads will start running. If you choose to pay via prepay, your ads may appear once funds have been received via credit card or bank transfer or after your bank transfer setup is complete.

For more information on the payment options available for your billing location and currency, visit the Billing lesson.

If you're not sure why a payment is declined, use the following checklist to figure out possible reasons:

1. Have you entered valid payment details (such as credit card number or expiration date)?
2. Do you have sufficient funds in your account, or have you reached your daily, weekly, or monthly spend limit?
3. Have you entered the correct billing address?

To see whether your daily budget is being met, visit your Campaign Summary page, set the date range above the table to yesterday, and compare the Current Budget column with the Cost column. If you exceeded your daily budget yesterday, your ads may stop running before today's daily budget is reached.

We might exceed your daily budget when we determine that your ad can benefit from more exposure on particularly heavy traffic days. However, our system makes sure that in a given billing period, you are never charged more than the number of days in that month multiplied by your daily budget. Visit the Billing lesson for more information.

To view the recommended daily budget for a campaign, or to edit the existing daily budget, go to the Edit Campaign Settings page, and click Recommended Budget. This recommendation will be high enough to capture all of the clicks the system estimates your ads will receive with full exposure.

Remember that this number is only a recommendation, and you should set your daily budget at a level with which you are comfortable. If you don't wish to raise your daily budget, you can try refining your keywords by using the techniques found in the Optimization lessons.

To learn more about negative keywords, please refer to the Keyword Matching lesson.

For ads to show on partner sites, the ads must:

• Be reviewed and approved
• Be in a campaign opted-in to the Google Network
• Meet partner requirements, which vary

Click on View reason(s) under the affected ad to see the specific disapproval reasons. Then make the appropriate changes. Editing your ad will automatically re-submit it for review. Visit our Editorial Guidelines to learn more.

To view all your disapproved ads, you can click View all ads in the alert box. You can also go directly to the Tools > Disapproved Ads page to make corrections to your ads.

To enable an adult ad to show, use specific keywords that are relevant to your targeted audience. You can also try searching for one of your keywords in combination with a more sexually explicit phrase, such as 'xxx.'

Please note, some of the sites in the Google Network may restrict advertising or keywords based on their own policies regarding content and editorial standards.

Increasing CPC bids for campaign-wide keywords

You can also increase your CPC bids to the minimum bid for keywords across all or selected campaigns using AdWords Editor, our free, downloadable campaign management application. To learn more, visit the AdWords Editor website.

The AdWords Report Center can generate fully customizable reports on specific topics such as campaigns, keywords, and ad text. These reports let users identify important trends over weeks, months, or years. Most reports can also be viewed as graphs, which offer a clean look at spikes and dips in traffic, CTR, or other key elements of an account. And because each report can be customized with configurable columns and performance filters, they provide just the information you need to help you identify your strengths and build on them, and to sniff out areas of low performance and optimize these areas accordingly.

You can view your reports online, or you can download them to your computer and view them with a spreadsheet application, such as Microsoft Excel. You also can have reports generated and emailed to you regularly.

• Keyword Performance: Displays details on selected keywords and organizes statistics by keyword.
• Ad Performance: Presents relevant statistics for ad variations, such as text ads, image ads, video ads, and local business ads.
• URL Performance: Displays statistics and measures the performance of destination URLs.
• Ad Group Performance: Organizes statistics for each of your ad groups.
• Campaign Performance: Organizes statistics for each of your campaigns.
• Account Performance: Generates statistics for your entire account, or for a portion of your account.
• Search Query Performance: Shows performance data for the search queries that triggered your ads which appeared after receiving clicks.
• Placement Performance: Shows statistics for ads that appeared on specific domains or URLs in the Google content network.
• Reach and Frequency Performance: Find out how many people saw your ads and how many times they saw them over a certain period of time.

Creating your report is as simple as following our four-step form, and then clicking 'Create Report' when you're done. Here's how:

1. Report Type: To begin creating your report, select your Report Type from radio buttons beside each report name. Your options on the remainder of the page will ajdust according to the type of report you have chosen.
2. Settings: In this section, you establish your report View and Date Range, and which ad groups and campaigns to include.
   • View: Choose 'Summary' for a high-level overview of all your selected stats, or choose from among 'Hourly (by date or regardless of date),' 'Daily,' 'Weekly,' 'Day of week,' 'Monthly,' 'Quarterly,' or 'Yearly' metrics for your account.
   • Date Range: Use the pull-down menu and select a time period (i.e. 'Last seven days,' 'Last 30 days,' 'This month,' etc.) for your report. For specific dates for summary, Daily or Weekly views, click on the date fields underneath the pull-down menu. Clickable calendars will appear, from which you can select report beginning- and end-dates. (Note: Hourly report data is available from February 1, 2006 onwards).
   • Campaigns and Ad Groups: To include all campaigns, choose the first radio button. For individual campaigns or ad groups, choose the manual selection option and click on the campaigns and/or ad groups you want included in your report. Choose as many or as few as you want included.
3. Advanced Settings: In this optional section, you can customize columns and filters so your report includes only the data you want to see.
   • Columns: Click the 'Add or Remove Columns' link to reveal check boxes for each of the available column categories for your report type. You'll find a wide range of choices, including Impressions, Clicks, CTR, Avg CPC, Cost, Avg Position, Campaign, Daily Budget, Campaign Status, Ad Group, Ad Group Status, Headline, Display URL, and many others. As you add or remove columns, the visual column display is updated based on your selections.
   • Filters: Click the link to 'Filter Your Results' for filter options based on your report type. Filters allow you to refine up to four data types. Use the pull-down to select and customize the relevant data types for your report. Depending on your report type, your filter options may include Ad Distribution, Status, Match Type, Site/ Keyword, Avg Position, Clicks, Cost, Avg CPC, CTR, and Impressions, among others.
4. Templates, Scheduling and Email: In this section, you'll name your report, save it as a template if you want to reuse your settings, and provide an email and format for receiving your report.
   • Name Your Report: Enter a title for your report. Pick a name that will be easy to recognize when you see it on a list of other reports you've created.
   • Templates: Check the box to 'Save this as a report template' if you want to run similar reports later.
   • Scheduling: If you want to run this report on a regular basis, check the box to schedule automatic reports and choose from the pull-down schedule menu (for delivery daily, every Monday or on the first of every month).
   • Email: To receive an email when your report is ready, check the box and then list the email address or addresses you want notified (for multiple addresses, separate each email with a comma). If you want your report attached to the email, check the next box and select your preferred report format from the pull-down menu (.csv, .csv for Excel, .tsv, .xml, .html).

You're almost done! Now, just click the 'Create Report' button and you'll see a screen confirming that your report has been submitted.

At the top of the page you'll see Google's estimate of how long your report will take to generate. (Most reports take a few minutes or less.) Next comes a text box directing you to the Download Center, where you can review your report when it is completed. To the right you'll see details of the report you have just run.

An important note: You don't have to wait at this page for your report to finish running. You can continue to browse through your account, sign off for a time, or even shut down your computer and return later. The report will continue to run and should be ready for you when you return. And if you requested an email notification and / or attached report, the report notice and attachment will be sent as soon as the report is completed.

You can view your report online in three formats: as data only, as graphs created from your data, or as both data and graphs together in one report.

If you prefer to download the report to your computer, you can do so in the same formats you can choose from for emailing your report: .csv (for Excel), .csv, .tsv, .xml., and .html .csv (comma-separated values) and .tsv (tab-separated values) files are encoded in UTF-8. These formats are recommended for users who prefer to process or review report data in text-only format. .csv (for Excel) files are encoded in UTF-16LE, and are compatible with most U.S. and international versions of Microsoft Excel. Select .xml (for 'Extensible Markup Language') to place your statistics in a database or on a website. Select .html (for 'Hypertext Markup Language') if you want to be able to view your report as a webpage. You may also open your report as a Google Spreadsheet for easy viewing and collaboration purposes.

To save your graph, click 'Export Report' and select 'Download graph.'

In the Report Center, you'll find links to your most recently created reports, under the header Saved Templates as well as your scheduled reports and any on-demand reports you saved as templates.

The Last 15 Reports section presents the last 15 reports you've created, along with the date range they covered, the dates they were requested, and their status (usually Completed). To view a report in this section, click on the report name.

An important note: Once you create more than 15 reports, the system will automatically delete your oldest report whenever a new one arrives. If you have scheduled a daily report, for instance, the oldest report will be deleted each day to make room for the new one. You can also delete reports you no longer want saved on this list by clicking the Delete link on the far right of the report name line.

Within the Saved Templates section, you can see all scheduled and on-demand reports saved as templates when you created them. The table tells you the date range for each, the time when each scheduled report will run next, and whether you're receiving the report by email. You can run either an on-demand report or a scheduled report by clicking the link marked Create Report.

You can also edit any of these saved templates by clicking the Edit this template link. This will open up the template in the Edit Template page, which is similar to the Create Report page that you used to create the original report upon which you based the template. Here, you can revise your saved template by reassigning report values for Report Type, Date Range, View and Campaigns and Ad Groups. And you can further customize your new report by resetting the columns and filters within the Advanced Options section.

Once you have edited your template, you can choose to rename the template, schedule reports for automatic delivery, assign an email address or addresses for notification, and select a format for report delivery. Then just click Save Template and you're all done creating a new report from your saved template.

To permanently delete a report template at any time, click the Delete link.

Check the box next to the statement Whenever the report runs, send email to: when creating the report and then type into the text box the email address or addresses to which you want notification sent when the report is finished. For multiple email recipients, separate each email address with a comma. If you schedule the report to run regularly, you'll be notified each time the report runs.

By checking the box for with report attached as: you also can choose to have your report sent as an email attachment. Select your preferred report format from the pull-down menu: csv (for excel), .csv, .tsv, .xml, and .html

Please note that files will be emailed in a zip, or compressed, format. Compressed reports must be less than 2 megabytes in order for the report to be sent via email. If the file is larger than 2 megabytes, you will receive an email notification asking you to retrieve your report from the Report Center.

Advertising is only effective if it generates measurable results for your business. Your Google AdWords account is an investment of time and money that you use to drive customers to your website. In this lesson, the resulting conversions are called your return on investment, or AdWords ROI.

ROI can also be called Return on Ad Spend, or ROAS. Your ROI can be calculated as revenue from sales, minus advertising costs, all divided by the cost of advertising. For example, if your advertising costs for the past week were US$500 and you've sold US$1,000 worth of inventory as a result, you have a 100% ROI for the week ((US$1000-US$500) divided by US$500). To express ROI as a percentage, you multiply the result of this formula by 100.

Determining your AdWords ROI can be a very straightforward process if your business is after web-based sales. You'll already have the advertising costs for a specific time period for your AdWords account in your Campaign Summary statistics. You can also create reports via the Report Center. The net profit for your business can then be calculated based on your company's revenue from sales made via your AdWords advertising, minus the cost of your advertising. Dividing your net profit by the advertising costs will give you your AdWords ROI for that period in time.

In other cases, your ROI may require a different formula. For example, if you're interested in calculating the ROI for a page view or lead, you'll have to estimate the values of each of these actions. For example, a Yellow Pages ad for your business may cost US$1,000 per year and result in 100 leads. Ten of those leads become customers, and each customer provides an average revenue of US$120. The value of each lead is therefore US$12 (US$1200 revenue/100 leads), and your ROI for the Yellow Pages ad is 20% ((US$1200 revenue minus US$1000 spent)/US$1000 advertising cost) x 100.

A simple alternative to estimating values for your leads and page views is to use a cost-per-acquisition (CPA) measurement. This method will allow you to focus primarily on how your advertising costs compare to the number of acquisitions those costs deliver. Using the Yellow Pages example again, your ads may cost US$1,000, resulting in 10 sales: therefore, your CPA for those ads is US$100. Your CPA should not exceed your profit derived from each acquisition. In the case of the Yellow Pages ad, the CPA is 20% less than the revenue the acquisitions provide.

Assume that you have a US$100 daily advertising budget. The keyword 'photography' generates 110 clicks, resulting in US$120 in sales, but it also costs you US$60 a day. This results in an ROI of 100% for that keyword. The keyword 'photography classes' uses only US$25 of the daily advertising budget, but generates 40 clicks. These clicks result in US$90 in sales, with an effective ROI of 260%. This advertiser would be better served allocating more of their budget to the 'photography classes' keyword because of its higher ROI, despite the potential for fewer clicks for this keyword.

The conversion rate listed in your account is the number of conversions divided by the number of ad clicks. Conversions are only counted on Google and some of our Google Network partners. The conversion rate is adjusted to reflect only the ad clicks on which we can track conversions.

Another important term to understand when tracking conversions is 'transaction.' While a conversion represents somebody coming to your site through AdWords and making a purchase, the transaction represents the purchase or desired visitor action itself.

To set up conversion tracking for your active ads, log in to your account and click the Conversion Tracking link on the Campaign Management tab at the top of your account.

Your choice of language will affect which Google Site Stats link is displayed on your conversion page. It will also give your users information about conversion tracking in a language appropriate for the majority of your site's visitors.

[Purchase Conversion Default: Sample code snippet only - DO NOT USE]

You should check your conversion reports to ensure that the conversion has recorded correctly. The Site Stats text link is an important feature of the program. It lets users know that you're tracking their purchase, and gives them a link to more information about Google conversion tracking.

If you can't see the Site Stats link, verify that the conversion code has been added to your webpage with no additional line breaks (compare your page to the conversion code available within your account). Some HTML editing programs will insert line breaks into the conversion code for the lines that are long enough to have wrapped to a second line in your account. The conversion tracking code should not have any line breaks inside of the '<' and '>', unless there is a ';' at the end of the line.

You can also run through the process yourself by searching on Google, clicking on one of your ads and completing a conversion on your site. However, this method costs you an ad click, so we recommend that you wait for a conversion to occur.

• Analyze conversion statistics
• Determine the return on investment, or ROI, of your campaigns
• Improve campaign performance using your conversion data

The Conversion Rate is the percentage of clicks that become conversions. Cost/Conversion is the cost you've accrued over the time period which you're viewing, divided by the number of conversions you received as a result of those clicks. This data will give you a quick overview of how well your clicks are converting, and the average cost of those conversions.

Your ad group summaries will include conversion rate and cost-per-conversion data. Again, conversion rate is a basic percentage, highlighting the percentage of clicks you received that resulted in a conversion. Your cost-per-conversion number represents the total cost of clicks for that campaign or ad group, divided by the number of conversions. This number will help you to quickly evaluate your ROI for the ad group as a whole.

A Custom Report enables you to evaluate keywords based on performance for each transaction type. Even seemingly relevant keywords may not provide the ROI you expect, so careful evaluation of the actual conversion and transaction data is essential for optimizing your campaigns.

After selecting the relevant conversion tracking fields for your report, you can start evaluating your account's performance. Conversion rate and cost-per-conversion are important statistics to monitor, but each individual conversion can lead to multiple transactions as users shop for various products on your site or return later to make additional purchases. Consequently, your transaction and cost-per-transaction statistics can prove even more valuable, since acquiring regular customers is more valuable than any single conversion. Tracking your transaction statistics can provide valuable insight into the effectiveness of your advertising, as well as the effectiveness of your site and the value of your product offerings.

• Are the keywords targeted and relevant enough to produce the desired results?
  

  If a keyword is too general, you run the risk of getting clicks to your site that aren't really relevant, and have a lower conversion rate. By narrowing the appeal of your keywords (using tennis racquet instead of just tennis), you'll get more relevant clicks and customers coming to your website.

  
  
• If the keywords are well-targeted, then is your site hindering your conversion rate?
  

  Taking a prospect directly to the most relevant page on your site can boost your conversion rate. Improving the usability of your site in general by making it easier for prospects to find and purchase your products or services can make a huge difference in your conversion rates.

To select advanced conversion tracking options and obtain your modified code, set up conversion tracking and click Advanced option to the right of each conversion type. You can set up conversion tracking by clicking the Conversion Tracking link, located beneath the Campaign Management tab in your account.

• The Purchase/Sale label helps online commerce sites track purchases and sales.
• The Leads label tracks how many users reached a point in your website at which they have contacted your company, such as completing a 'request more information' form on your website.
• The Sign-ups label can track how many users elected to subscribe to a newsletter or to download a white paper.
• The Page views label enables you to track when a visitor navigates to a specific page that you think is valuable.
• The Other label enables you to define your own conversion type.

The transaction types are just labels; you're not restricted to tracking only these types of transactions. Transaction labels can be assigned to any conversion page you would like to track.

• Define values for your conversions.
• Implement and verify your conversion tracking code.

You can track dynamic transaction values by inserting a dynamic variable in the Value field when setting up conversion tracking.

Conversion tracking works with most of the popular webpage development languages available. For example, ASP users most likely have a dynamic variable such as <%=totalValue%>, while sites built with PHP resemble <?echo $totalValue?>.