by Claudia Bruemmer

As most of you know, running an AdWords campaign can be very competitive depending on the popularity of your keywords. It can also be very confusing for small business owners (SMBs). Wouldn’t it be nice to have a tool where you could compare your campaigns to your competitors or find out what’s wrong if yours aren’t performing? There’s a new free tool that does just that and can also tell you how to improve your campaigns. This is a review of the AdWords Performance Grader, which lets you audit your PPC accounts to improve your campaign performance.

This tool is easy to use and provides the same kind of account analysis you might get from a consultant or agency. It gives you actionable insights and competitive intelligence with instant reports.

The AdWords performance tool grades your account against thousands of other AdWords accounts in the same spending range. For instance, if your monthly spend is $500, then it compares your account with other advertisers spending between $10 and $600 per month. That way, you can compare your account performance with that of other advertisers in the same spending category. It compares advertisers in different industries at the same spending level because comparing big and small spenders within the same industry is not fruitful.

Say your business falls in a competitive industry using the keyword “insurance,” where big advertisers like Geico and Progressive spend millions monthly on AdWords, whereas local insurance agents spend as little as $50 per month. Even though the large and small advertisers are in the same industry, it’s not fair to compare their performance because the big advertisers have a huge budget plus dedicated personnel and technology that ensure every possible advantage. That’s why the grading tool compares advertisers from different industries with the same average monthly spend on AdWords.

Grading Tool Key Metrics. As you know, different advertisers have different objectives such as lead generation, direct response, branding, or a combination of objectives. Additionally, advertisers employ different tactics for AdWords success. So there are many different opinions as to what the most important key performance metrics should be for an AdWords campaign. Therefore, the grading tool is set up to compare the same key metrics that Google deems important, which are:

• Quality Score
• Use of negative keywords
• Impression share
• Click-through rate
• Long-tail keyword optimization
• Account activity
• Ad text optimization
• Landing page optimization

Grading Calculations. The tool assigns your campaigns a comparative grade for each of the above metrics. For example, in the Quality Score category, it calculates your account’s average Quality Score and then compares your score against other advertisers in your spending range. If you have the highest Quality Score in the group, you get 100%. A score of 51% means that you’ve doing better than over half of the other accounts in your spending range for that metric. Your overall account score is based on how you did in all of the different categories compared to the other accounts in your spending range.

Your Account Data. The company claims it doesn’t save your AdWords account credentials. In order to analyze your account performance, it must download several AdWords reports. The grader stores some aggregated statistics about your account, like your average Quality Score, in order to make the relative rankings accurate. However, that information is not shared, sold or used for any purpose other than for providing your relative score.

In conclusion, the AdWords Performance Grader is free and can help SMBs fine tune their AdWords campaigns for better performance. What’s not to like?