Your search engine marketing (SEM) budget is an investment. The money you spend with Google, Overture, FindWhat.com, Kanoodle, and the rest helps you grow your business, meet marketing goals, and deliver revenue and profits, at least if you invest your SEM budget wisely.
Though it’s true your entire marketing budget is an investment, most on- and offline marketing isn’t as measurable and controllable in real time as paid-placement search. But there are tradeoffs. The real-time auction marketplaces for paid placement can be volatile and unpredictable, just like the stock market.
Last week, I discussed the similarities between the efficient financial markets and the search engine auction marketplaces. Today, let’s delve into the decision-making process regarding removal of the underperforming listings. When do you drop a keyword listing from high-volume, premium positions? When do you remove it from a campaign altogether, because even at a minimum CPC and position, the keyword still doesn’t meet objectives? Once again, we’ll use stock market analogies to illustrate strategies, then delve into tactics.
In the financial markets, traders and professional investors require a minimum return to even make a transaction. Often, this is because they have a capital cost. Professional investors understand they’re making decisions between easy, low returns and riskier, higher returns. Some traders play the market with other people’s money (or borrowed money), so they must pay an interest rate to access the capital.
Imagine you trade stocks on margin. You’d never buy stock on margin if you weren’t convinced transaction earnings would exceed your margin interest. Similarly, some keywords deliver revenue, but at a cost higher than you’re willing to pay. Poorly managed listings also have a good chance of resulting in a loss. These dog keyword listings don’t belong in your portfolio.
Power search marketers understand to capture the market and win against the competition, they must explore all relevant keyword opportunities. They use broad search campaign portfolios that include short one- and two-word phrases as well as longer ones. In all cases, the smart marketer must use tracking, analytics, technology, and manual return on investment (ROI) calculations to maximize profit and eliminate waste.
Power keywords, the ones with high volume, represent the greatest opportunity for search marketers. However, there’s often an inverse relationship between keyword popularity and conversion rate, with the exception of brand names and store names. Searchers often use popular keywords when they’re early in the buying cycle. As they get closer to the buying decision (perhaps during the same search session), they use longer, more specific queries.
When managing your pay-per-click (PPC) paid-placement campaign, you want to give every keyword listing a chance to perform and meet ROI objectives. If a keyword misses your goals at a top position, it may achieve them at a lower position (at a lower CPC but yielding a lower click volume). PPC campaign management is all about finding and maintaining the sweet spot where profit, ROI, and volume goals are balanced.
You don’t want low-performing keyword listings to drag down overall campaign performance. The appropriate tactics to address low performers are different for each marketer. Before deleting any keyword listings, consider the following:
- How well targeted is the keyword to your business? Was the keyword listing a good fit?
- What’s this keyword’s potential if you can get the metrics to work? A keyword getting 20 clicks a month at a premium position has less potential than one gets 2,000. Generally, if you dump a 20-click-per-month listing, the ramifications of making the “wrong decision” are minor. If you cut a listing with thousands of clicks a month when you could have saved it, that’s a huge lost opportunity. Cutting campaign keywords requires human review.
- Did the creative do a good job explaining the benefit of clicking?
- Did you use the keyword in the creative clearly?
- Is the landing page for the listing the best possible fit, or should you split-test other landing pages?
- What’s the keyword’s competitive landscape? If you provide a high-end luxury product and compete with a discounter for a commodity product, you may be doomed.
- Are you running the keyword listing in broad match without appropriate negatives?
- Is the keyword seasonal? Perhaps the keyword will work, but not all year round.
- Is the keyword ambiguous or its intent unclear? “China,” “windows,” “apple,” “bug,” “virus,” and “lemon” are great examples of ambiguous search terms. Yours may be ambiguous as well, if you can’t tell what the searcher really wants from the search term. Good copy helps alleviate this problem.
- Is the keyword used early in the buying cycle by customers who may order much later or through another channel?
If a keyword can’t support itself in a premium slot, lower positions may still be a viable option. If the keyword listing continues to fail and is reduced in both CPC and position to almost an engine’s minimum, and you tried reasonable efforts to get the keyword to work to no avail, delete that listing and focus on the high performers. If a keyword listing acts like a dog and it’s not obvious how to turn that dog into a star performer (or even a reasonably good one), dump it.
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