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Small Budgets And Big Keyword Lists.

The author

Steve Baker

Chief Analyst

<p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">I recently saw somebody describing their campaign on a forum. They said that they had 250,000 keywords, and were concerned that Google may ban them.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">Really, this was the wrong question - what they should have been asking was how they could possibly manage a campaign with 250,000 keywords.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">Do a few sums, and you see what I mean. Suppose that a typical click costs &pound;0.20. How long do you need to run a keyword before you can hazard even a rough guess at its conversion rate? 100 clicks? If you've got a low conversion rate, even this may not be enough. But to get 100 clicks on 250,000 keywords, at &pound;0.20 per click would cost &pound;5,000,000. And how long would you have to wait to get 25,000,000 clicks anyway???</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">Realistically, the majority of these keywords would get no traffic at all, and 90% of the clicks would come from 1% of the keywords. So you can still optimise the keywords that get the vast majority of the traffic, so the problem isn't that big an issue.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">So what about the other 99% of the keywords? If you can't optimise them, then what's the point in bidding on them - they may never be profitable! On the other hand, people keep saying that 'the long tail' is the key to successful PPC campaigns.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">The above example is quite an extreme one - most campaigns won't have 247,500 keywords generating very little traffic. But the 90%, 1% issue is probably true of most campaigns. If a handful of big keywords eat your entire budget, how will you ever make the other 99% profitable? They're supposed to be the most profitable in general, with their low cost-per-clicks and their high conversion rates...</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">One option would be to pause the big keywords, and spend your entire budget on the smaller keywords. This will, in turn, lead you to find that 90% of your traffic is STILL coming from 1% of your keywords, as the largest of the keywords you didn't pause take most of your budget. These keywords are probably more profitable, but it doesn't really feel very optimal!</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">If you've read through my case study you can see how I would go about this problem in most cases.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">My keywords are generally grouped by product or service, with extra Adgroups for the more generic groups of terms. So in the case study, I had one Adgroup for each printer, one for each printer type/manufacturer etc.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">Then I optimised at Adgroup level initially. I optimised this by trying to equalise the ROI from each Adgroup, such that the total daily budget lasted (on average) just until the end of the day.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">This should maximise the number of conversions that you get per day.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">Having done this, I look within the Adgroup that's getting the most traffic, and start adjusting the bids on the keywords that generate the majority of that traffic, looking at the ROI again.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">If you have a situation like the printers, where the products are largely similar, once you've got a few Adgroups done, you can see patterns emerging. Certain keyword formations will perform better or worse than others. So you can make the adjustments to Adgroups even without having enough data individually. This is quite good, as you can have a stab at optimising keywords that haven't got enough traffic.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">I would also do one more thing here. If a keyword's had no clicks after a month, I'd delete it. Even if you get a 5% conversion rate, if a keyword gets a couple of clicks per year, it's not important; it's just cluttering up your campaign.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">Just be aware that there are clear limitations to this approach. Just because a group of keywords works on printers doesn't mean it'll work on photocopiers, telephones or PC's.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">Consider again the campaign that I mentioned at the start of this post. He was promoting a worldwide hotel booking service.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">Clearly, the approach is likely to be valid here. If "Hotels in Moscow" converts better than "Moscow Accommodation", then it's likely that "Hotels in Durban" will convert better than "Durban Accommodation".</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">It's likely that each city has exactly the same keyword list, with just the city name varying. This is a huge opportunity to save a fortune when optimising. Rather than just switching the whole thing on from the start, why not work out using a few cities which keywords are profitable or not, and how much to bid for each type of keyword? Rolling this out on the others would give you a huge head-start, saving you a lot of money.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">But if it works here, why not use this approach for any campaign where you have the same keywords in each Adgroup with just a different model number/city?</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">Sadly, it's not really something that I can do, in my position here. When a client asks us to start up a campaign on their behalf, they expect us to build it and switch it on ASAP. After all, one of the main benefits of PPC is the immediacy of the results. You turn on a campaign at 9am, and at 9:02, you're getting clicks.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">But if it was my money on the line, and I had a lot of keywords, and only limited cash, I'd probably use this method.</span></p> <span style="font-family: Arial; font-size: x-small;"> </span> <p class="MsoNormal" style="margin: 0cm 0cm 0pt"><span style="font-family: Arial; font-size: x-small;">What do you think? Is this better than the 'throw everything at the wall and see what sticks' approach? Give me your thoughts or experiences...</span></p>

I recently saw somebody describing their campaign on a forum. They said that they had 250,000 keywords, and were concerned that Google may ban them.

Really, this was the wrong question - what they should have been asking was how they could possibly manage a campaign with 250,000 keywords.

Do a few sums, and you see what I mean. Suppose that a typical click costs £0.20. How long do you need to run a keyword before you can hazard even a rough guess at its conversion rate? 100 clicks? If you've got a low conversion rate, even this may not be enough. But to get 100 clicks on 250,000 keywords, at £0.20 per click would cost £5,000,000. And how long would you have to wait to get 25,000,000 clicks anyway???

Realistically, the majority of these keywords would get no traffic at all, and 90% of the clicks would come from 1% of the keywords. So you can still optimise the keywords that get the vast majority of the traffic, so the problem isn't that big an issue.

So what about the other 99% of the keywords? If you can't optimise them, then what's the point in bidding on them - they may never be profitable! On the other hand, people keep saying that 'the long tail' is the key to successful PPC campaigns.

The above example is quite an extreme one - most campaigns won't have 247,500 keywords generating very little traffic. But the 90%, 1% issue is probably true of most campaigns. If a handful of big keywords eat your entire budget, how will you ever make the other 99% profitable? They're supposed to be the most profitable in general, with their low cost-per-clicks and their high conversion rates...

One option would be to pause the big keywords, and spend your entire budget on the smaller keywords. This will, in turn, lead you to find that 90% of your traffic is STILL coming from 1% of your keywords, as the largest of the keywords you didn't pause take most of your budget. These keywords are probably more profitable, but it doesn't really feel very optimal!

If you've read through my case study you can see how I would go about this problem in most cases.

My keywords are generally grouped by product or service, with extra Adgroups for the more generic groups of terms. So in the case study, I had one Adgroup for each printer, one for each printer type/manufacturer etc.

Then I optimised at Adgroup level initially. I optimised this by trying to equalise the ROI from each Adgroup, such that the total daily budget lasted (on average) just until the end of the day.

This should maximise the number of conversions that you get per day.

Having done this, I look within the Adgroup that's getting the most traffic, and start adjusting the bids on the keywords that generate the majority of that traffic, looking at the ROI again.

If you have a situation like the printers, where the products are largely similar, once you've got a few Adgroups done, you can see patterns emerging. Certain keyword formations will perform better or worse than others. So you can make the adjustments to Adgroups even without having enough data individually. This is quite good, as you can have a stab at optimising keywords that haven't got enough traffic.

I would also do one more thing here. If a keyword's had no clicks after a month, I'd delete it. Even if you get a 5% conversion rate, if a keyword gets a couple of clicks per year, it's not important; it's just cluttering up your campaign.

Just be aware that there are clear limitations to this approach. Just because a group of keywords works on printers doesn't mean it'll work on photocopiers, telephones or PC's.

Consider again the campaign that I mentioned at the start of this post. He was promoting a worldwide hotel booking service.

Clearly, the approach is likely to be valid here. If "Hotels in Moscow" converts better than "Moscow Accommodation", then it's likely that "Hotels in Durban" will convert better than "Durban Accommodation".

It's likely that each city has exactly the same keyword list, with just the city name varying. This is a huge opportunity to save a fortune when optimising. Rather than just switching the whole thing on from the start, why not work out using a few cities which keywords are profitable or not, and how much to bid for each type of keyword? Rolling this out on the others would give you a huge head-start, saving you a lot of money.

But if it works here, why not use this approach for any campaign where you have the same keywords in each Adgroup with just a different model number/city?

Sadly, it's not really something that I can do, in my position here. When a client asks us to start up a campaign on their behalf, they expect us to build it and switch it on ASAP. After all, one of the main benefits of PPC is the immediacy of the results. You turn on a campaign at 9am, and at 9:02, you're getting clicks.

But if it was my money on the line, and I had a lot of keywords, and only limited cash, I'd probably use this method.

What do you think? Is this better than the 'throw everything at the wall and see what sticks' approach? Give me your thoughts or experiences...