Article Highlights:

• Engine optimization focuses on two elements: keywords and ad copy
• Ensure your ads match the keyword query being searched
• Profit optimization occurs through bidding and refining those bids

September 15th, 2009 — iMedia Connection — In search, optimization starts at the time a user sees your ad, and sometimes it doesn’t end until months after they leave your site. The most effective advertisers are able to view this entire funnel and optimize each piece of it, thereby balancing engine optimization and profit optimization along the way.

Engine optimization

As competition in your category increases, identifying unique, quality keywords becomes increasingly difficult. While basic keyword research and expansion continues to be important, search engine marketing professionals need to find other tools to gain a competitive advantage. Web marketers need to be skilled at selecting keywords that will not only drive traffic, but also drive conversions in a cost-effective manner. Engine optimization focuses mostly on two elements and the interactions that occur between them: keywords and ad copy.

Keyword optimization has multiple elements and is constantly progressing. The initial piece deals with the keyword list in and of itself — choosing the right keywords for your campaigns. The “right keywords” are different at each stage of your campaign.

At launch, the “right keywords” generally consist of keywords that will produce high quality scores in the engines and will effectively “burn-in” your account. Generally speaking, these are keywords that will produce a high volume of data in a short period of time so both you and the engine can make a quick decision about how well the keyword performs.

However, avoid keywords that are too broad or too competitive. Broad terms are difficult to target in a granular enough fashion to produce high click-through rates, and super competitive terms are generally overpriced and difficult to achieve high position on at launch. Higher volume, mid-tail terms (three- to four-word terms) that are relevant to your site are generally best for initial quality score.

When deciding quality score, engines are mostly looking at one element: click-through rate. High click-through rates both indicate a high expression of user interest and optimize engine profit — making it the most dominant variable contributing to quality score. That being said, when launching a campaign, it’s in the advertiser’s best interest to make ads particularly imploring, oftentimes more aggressive than you would run long term.

It is important that the ad showing properly matches with the keyword query being searched. This requires a granularly organized account structure set up for proper ad serving. Experiments have shown that the most optimal account structure is based on semantic groupings versus random groupings or keywords grouped by quality score. When deciding if a keyword or a group of keywords require their own ad group, ask yourself, “Could the user intent of these keywords be any different? Is there any different messaging I would want to serve to make the ad more relevant?” If so, break it out separately.

Once keywords have established a sufficient click history and ad text is delivering high quality scores, a positive account history has been created. Now you can begin expansion. During this process, you can add longer-tail keywords to the account, as well as highly competitive terms. You can also begin to optimize the account toward profit goals through bidding and keyword value refinement.

Profit optimization

Profit optimization mainly occurs through bidding and refining the granularity and accuracy of those bids. Bidding looks at two major variables — the keywords themselves and the conversion data attributed to them. Because of broad match and lack of conversion visibility, bid value predictions are often inaccurate and do not maximize profit.

To help combat broad match diluting bid values, you must get as granular in your keyword list as there is data to support. This means analyzing query data to find search queries representing keywords not currently in your account but with enough data to justify your decision. Keywords with positive conversion history should be added and bid separately. Keywords that cannot be profitable should be added as negatives.

Another way to bid more pricelessly on keywords with sufficient volume is to bid each match type separately. By cloning your campaigns and bidding each to a separate match type, you can take advantage of optimizing to the different conversion rates that result from each. In general, exact match terms produce the highest conversion rates and thus can be bid higher. Phrase match follows after that, and broad match is usually the lowest, as it is the least targeted.

The same process goes for geo-targeting. Analyze your conversion data by state to determine if any conversion rate differences exist. If so, break them out as geo-targeted campaigns with a national campaign overlaid to prevent losing users due to IP issues. Bid the keywords to their separate values.

Often, advertisers will lack the conversion data needed to make accurate decisions, and the above actions become difficult. In this case, it is best to try and find other informative data points or goals that exist within the funnel to use — for example, a lead rather than a sale, time spent on site, pages visited. Many different metrics found by using analytics, placing pixels, or having actions users can trigger can serve as proxies for an end value conversion.

Ultimately, good bidders should understand their willingness to pay at each point in the conversion process. It is often advisable to use multiple variables to determine bid values, weighting the variable that correlates most with the probability of an end conversion the highest. As data become more plentiful, optimization can get closer to the final conversion point without sacrificing lack of data and transparency for value along the way.

Data can drive your bottom line

In summary, make your data work for you. Knowledge is power — don’t throw it away. The more data you have, the smarter and more effective you can be. A keyword or phrase specific to your industry or business category isn’t always the optimal fit for your PPC campaign. Opinions don’t matter. The numbers don’t lie. It’s the math that counts most. Invest in a database and spend some time understanding the numbers. It’ll be well worth your time and make you a more efficient marketer.

Brian Eberman is CEO of Avenue100 Media Solutions.