I’m excited to share an AdWords account optimization tip today that will improve your efficiency, grow volume, and lower your CPA. It’s a very simple tip, and one that offers great leverage. It’s also one that few AdWords accounts obey, especially larger corporate accounts. What’s my tip? Simple: Focus on exact match as your primary match type, with broad and phrase as secondary match types. I touched on this concept a bit in my video about launching a new AdWords account and my post about PPC match type strategies. I’d like to elaborate today, however, because it’s a new year and I truly believe this simple tip will drive great results with minimal time commitment. Why am I so certain? I keep seeing this opportunity on a recurring basis as I network and talk to more and more search engine marketers.
Look At CPA By Match Type
First, let’s perform a quick sanity check to see how much opportunity exists in your personal account. Download your Google AdWords (search only) data for the last month. It might make sense to look at Google.com only but you can also include syndication partners if you’d like. Next, go through the data and remove your trademark keywords. These perform at such low CPAs compared to other keywords (and are so heavily weighted towards exact match) that they could bias your data, making exact match look even better than it is. Next, run a pivot table to calculate your aggregate volume of conversions, CPA, and average position (you’ll need to weight by impressions before you pivot) by match type.
What do you see? If your account is like 99% of the others out there, I’m betting exact is operating at a much lower CPA than the other match types. Also if you’re lucky, the majority of your conversions are coming from broad. I’m saying “lucky” because that means your account is under-optimized and offers the ability to easily shift the mix towards more profitable exact keywords. Also, check out your average position data. If the average position of exact is already 1.0 or close to it (and the volume of conversions from exact far outpaces the other match types), you may not have much upside via this strategy, even if your exact CPA is much lower than phrase and broad.
Dig Deeper Into Your Match Type Data
Assuming your exact keywords are operating at a lower CPA than the other match types, your exact keywords are not dominating the traffic mix, and your exact match keywords are not in position 1.0 (or close to it), we should have a big opportunity on our hands! However, it’s not prudent to make conclusions from aggregate data in SEM. It’s time to go to the keyword level!
Look at your top keywords. Try to go through all the big keywords until you’ve covered at least 60%-80% of your account’s conversions by keyword. Validate the same assumptions you did on an aggregate level on the keyword level. I’m betting it will pan out and you’ll quickly see the huge opportunity on exact match.
Now, It’s Time To Optimize Your AdWords Account
At the end of the day, I’m a big fan of optimizing to the same CPA on a keyword level for all keywords except trademarks (especially if you have a large, unlimited budget). There’s rarely a case where you’d want to run broad and phrase at a higher CPA than exact. (I’m more open to running different exact match keywords at different CPAs, especially if there’s a huge volume opportunity, but that’s a different topic.) By operating the match types at the same CPA, you’ll drive added conversions and efficiency (better margins).
How do you do this? Once you have your CPA information by match type, a simple first step might be making aggregate bid changes by match type. Why not adjust the bids down for all broad and phrase keywords while adjusting the bids for exact up? In extreme cases, I have gone as far as pausing broad and phrase and then raising exact aggressively. Having PPC bidding solution such as Marin Software will really help you make these types of bidding changes. (As a side note, you may wish to check out my SEM Automation Buyers Guide.)
The Ideal AdWords Account Is Exact Match Focused
I’ve talked about this quite a bit in the past, but would like to repeat because it’s really important stuff. The strategy above only works if your account has keyword parity by match types. It’s especially important that all keywords in the account that are on broad and phrase match are also on exact. The ideal SEM account in my opinion has the vast majority of keywords on exact with only the head terms on phrase and broad for the purpose of keyword generation. Over time, you then look at your search query report, find the new queries generated by broad and phrase that work, and deploy them on exact.
I hope this framework gives your you and your company a quick win in your Google AdWords account for 2011! Just remember, be cautious and take time to make your changes. Goal number one is always preserving what you already have so I like to phase in large changes over time.
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