Keyword and engine expansion are fact of search engine marketing (SEM) life. Most marketers start campaigns with the obvious keywords and search engines. The good news is keywords that were obvious to the marketer were probably obvious to prospects and customers, too. Most search volume in an industry category is in those no-brainer keywords.
Yet keyword expansion is an ongoing process. Adding more engines to the marketing mix can incrementally increase revenue and profit. Adding a second-tier engine or additional 5,000 or 45,000 keywords to a campaign won’t suddenly bestow you with enough power to kill your competition. It’s still a good idea to revisit expansion from time to time.
Success is never guaranteed. New keywords or search engines may not meet your success objectives (ROI or otherwise). In paid-placement SEM, you can limit the costs of a bad media decision (poor keyword; bad engine; or poor ad copy or landing page) because the auction allows near-immediate control. Media and testing costs exist in SEM as well.
Direct marketers know a certain percentage of a media budget must be allocated each month to test new media or new creative. These marketers also know 30 to 70 percent of all new media tested fails. Testing new ad creative also has a failure rate.
Each new media buy is a gamble, an educated guess the media may work. A budget allocated for trying new things is necessary to grow a campaign and a business. All your current keywords have bids that are inching up as the marketplace gets more aggressive and competitors become more skilled at running their businesses. I prefer to think of failed tests as learning experiences.
Every test you conduct with a new batch of keywords or a new engine is an experiment that yields extremely valuable data, even if the test fails. Can you expect a good return on investment (ROI) from a budget allocated for testing? No.
Though it’s possible new keywords and engines will succeed right away, that would be extremely unusual if you had tested aggressively enough. At least some media tests should be groundbreaking. They should try something completely new or something old in a completely new way. When a test finds a successful new way to use keywords, engines, or creative, the investment pays dramatic dividends from that point forward. This is why smart marketers always leave a percentage of their budget for testing.
Why You Must Bear Some Costs
You’re testing a new keyword in Google with an existing landing page. To eliminate a keyword/engine combination as a viable part of a campaign moving forward, you must give the keyword/engine a chance to perform.
Should a new keyword be tested at the top (high CPCs (define)) or at a lower position at lower cost? There’s no one answer, but there’s a big benefit to starting near the top when testing new keywords, engines, or creative.
Higher positions get more click volume, so you can test more quickly. Placing ads lower on the page (at a lower CPC) increases the chances of hitting your ROI target (due to a lower cost), but there may be a dramatic decrease in click volume at lower positions.
Factors that should influence your decision to test aggressively (high CPC and position) or conservatively (lower CPC and position):
- Based on similar existing keywords with similar creative landing pages and ad copy, what’s your conversion rate to positive behaviours?
- Given that conversion rate, could you conceivably afford the top positions?
- Can the keyword or engine deliver a huge volume of clicks even at a lower position? Some keywords are so heavily searched, they deliver volume at lower positions. It’s unusual for those keywords to be new to your campaign; however, you may be testing new creative against those keywords.
- If the test is successful, how much positive outcome can the new keywords, creative, or engines have on your business?
- How quickly do you want the test results?
Deciding how aggressively to position a campaign for testing purposes isn’t easy. Starting high answers conversion and ROI questions quickly. Starting low may dramatically extend the test period.
Part 2
Keyword expansion can be critical to maintaining campaign efficiency and scale for paid placement search. When I test new keywords, I know the list will have winners and losers. Last week, I discussed aggressiveness when adding new keywords and engines to a campaign and how testing costs extend to testing new creative (ads and landing pages).
Generally, I like to set preliminary bids as high as possible, within reason. The easiest way to determine reasonable aggressiveness is by using existing data to model a test. When testing new keywords within an existing engine, look at your current campaign and find similar keywords. What do you pay for those keywords now? More important, what would you be willing to pay for the top position? Though the new keywords won’t get exactly the same conversion rate or be the exact same quality, using current willingness to pay provides some guidance.
Engine expansion success is the most difficult to predict. Tier-two engines in particular get their traffic from various sources; those may or may not deliver the right mix of quality and volume. When testing new engines, I look at my clients’ competitors’ bids. Are they being smart with bidding based on return on investment (ROI) or other success metrics? If so, I take a cue from their bids.
When testing new creative, use power keywords first. Power keywords are high-volume keywords, brand keywords, or generic searches (shorter keyword phrases that are early buying-cycle phrases). To give new creative a chance to outperform the old, boost price/position at least a bit (except if you boost from position 2 to 1). Unless you conduct a multivariate test, you’ll often get an answer to your creative “survivor challenge” in a short period. If you test many variables simultaneously, however, the amount of required traffic rises dramatically. That often requires more time and investment.
To get a statistically valid data sample for one keyword/engine/creative combination, expect to pay at least twice your allowable. Assume you want leads at $75 each or bring in orders at a given ROI that translates into $75 (based on a cost-per-order or a return-on-ad-spend percentage and average order size). The test requires a sufficient number of clicks to know if the new media combination will work. If the clicks are inexpensive and the conversion rate low, expect to use lots of clicks to get an order. If your clicks are more expensive, you’ll need a high conversion rate to hit targets. You can use existing data to help model the test.
A good rule of thumb is you must spend 110-130 percent of your target allowable to reasonably presume the media pricing and creative aren’t working. Even when you overspend the target by 20 percent (here, $90) without getting a lead or an order, it still may not be enough data to deem the test a complete failure.
Nothing hurts your business more than giving up on a potentially important keyword within an engine that can deliver enough click volume to make a difference, assuming you can find a way to hit your media objectives with that keyword. By giving up on a keyword, you give visibility, leads, and, potentially, customers to your competitors.
That said, some competitors may use much more aggressive ROI targets than your own, factoring in data that supports lagged or offline conversion or using branding metrics or buy-cycle data. Or, they could just be lunatics bidding crazy prices. Regardless of a competitor’s motives, you’re stuck with them in an auction environment.
When a keyword tested at a particular price/position with specific ad creative and landing page selection doesn’t deliver, you may be tempted to give up on it. Here are some reasons you can’t give up on a keyword with only a small data set on the first go-around:
- If you can get the keyword to work, the upside is very high.
- At a lower position, the same listing is distributed to a different set of search engines.
- As position changes, page placement often changes radically, resulting in a different type of searcher seeing and reacting to your ad. A top position may attract “compulsive clickers’” attention.
- Creative, keyword, and price/position work together for success. If one or more isn’t optimal, the combination fails.
Continuous testing is a requirement of a pay-per-click (PPC) search campaign, or any marketing campaign for that matter. Clearly, top marketers, including your competition, likely reserve budget for testing; knowing some of that money will be spent learning does and doesn’t work. To succeed in this marketplace, you, too, must continuously allocate a budget toward testing. I prefer to allocate 15 to 20 percent of the budget to exploring efficiency improvement and testing. Half goes toward new media (keywords and engines), the rest toward trying existing media with different creative (landing pages and ads). A well-constructed test is never a waste, even if all you learn is what doesn’t work.
By Kevin Lee