Is your PPC ROI Cutting the Mustard?

Pay Per Click Advertising

With competition driving keyword inflation and marketing budgets falling improving ROI is the hottest topic around for PPC.

As I commenced managing my first PPC campaign a number of years ago, it is interesting to witness the impact competition has had on keyword inflation over time. So just how much is it?

Over the past 2 years alone the average CPC for one campaign I have managed has increased by 150%. Surprisingly whilst keyword costs the keywords quality score has improved and the position has remained nearly identical. All of which has happened in a category which has a moderate level of competition – thus I cannot imagine the rate of keyword inflation in categories such as travel.

This is slightly concerning in a time where Australian organisations are yet to fully embrace the digital phenomenon, so it is not unrealistic to conceive that keyword inflation will continue to grow at a similar rate over the next 18 months.

Thus what is more important than ever is for marketers to become more strategic in their campaign management to lower CPCs and improve ROI to get more bang from the paid search buck.

Here are my top tips to improve campaign ROI;

1. Negative Keyword Matching In particular one of the key issues with broad match keywords is Google will match “similar keywords” to the original query ie if I am targeting spring water, Google will also serve ads to a user searching on mineral water which are 2 very different products. Thus by refining your negative keywords list PPC marketers can maximise ad serving to its most relevant audience.

To understand the exact queries that are driving users to a site – utilise the “search query performance report” in the Google AdWords Report centre. This report enables campaign managers to identify the queries driving traffic to a site which are inappropriate and can be added to a negative keyword list.

If a significant portion of your keyword portfolio is set to “broad match”, it is extremely important to refine your campaign with a long list of negative keywords on an ongoing basis. Whilst broad match keywords are useful to ensure broad coverage across your product or service category, it can also lead to a significant portion of unqualified users visiting your site – decreasing campaign ROI.

2. AdGroup Refinement Overtime keywords are added to AdGroups, which can result in the ad text becoming less targeted and relevant to a users search query. Similar to the creation of an initial campaign strategy, review AdGroups and group keywords into new sub-themes which can be used as a basis to create new ad groups. By doing so campaign managers can create more targeted ad text and improve keyword quality scores – thus reducing CPCs.

After creating AdGroups, PPC marketers often overlook the opportunity to further refine their AdGroup strategy by segmenting AdGroups into smaller more relevant subsets of keywords and ad text.

3. ROAS Based Campaign SegmentationBy grouping AdGroups into 3 categories, high, moderate and low return, and creating separate campaigns, campaign managers can allocating a higher proportion of ad spend towards the keywords that generate the highest return.

With limited budgets it is important to allocate funding based on the best performing AdGroups and keywords. As budgets are set at the campaign level it is difficult to allocate funding towards AdGroups that are performing better than others. Thus rather than simply segmenting your campaigns by site or product type – consider segmenting campaigns based on ROAS.

4. Day Parting & Bid Multiplier

Ad SpendNot all days were created equal when is comes to online consumer purchases. For example according to ComScore, consumers are 30% more likely to purchase a holiday on Monday or Tuesday thus using strategies to improve exposure and click-throughs on these given days can improve ROI.

Google AdWords provides campaign managers with 2 key tools to optimise campaigns on higher / lower conversion days. Ad Scheduling allows campaign managers to schedule when ads should and shouldn’t appear, whilst bid multiplier enables marketers to bid above or below the maximum CPC by setting a percentage increase or decrease on bids for given days / times.

5. Testing

Like many other marketing mediums, the importance of testing is integral to improve ROI. Apart from the more obvious elements to test such as ad text and landing pages, trial testing various keyword match types such as phrase or exact match along with keyword positions.

Google offers a position preference function to enable campaign managers to specify ads to be shown in a preferred position. It is important to note that Google does not guarantee position placement preferences because of factors related to the bidding process. However it can be a useful tool to improve campaign performance as many organisations have found better ROI when ads are shown in a given position. When conducting tests, ensure tests results are statistically significant before decisions are made on how to proceed, one tool to help you with the following is – http://splittester.com/.

Do you have any other tips to improve ROI on PPC? Share them below.

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