Friday 8 October 2010

Short and effective - keyword lists

Some time ago I published a post about long keyword lists but, in this reborn blog, it's worth going over this problem once again. We are still seeing posts on the Adwords Help Forum from many users who are trying to manage hundreds or thousands of keywords and who are sometimes even reaching the 2000 Ad Group limit and wanting more.

It's easy to understand how it may seem that you need to include all the possible keywords someone might use when looking for your product or service, but the truth is that in almost all cases all that's required is a relatively short list of well-chosen and planned keywords. And by relatively short we could be talking about no more than 10.

To understand why this is the case we've got to consider the following:

  • Frequency of usage
  • Cost per click (CPC) & Conversion rate
  • CTR & Daily budget
  • Effect on account performance
  • All of the above together!

None of these items can really be considered in isolation, so I'll try and build this explanation up slowly. Firstly, let's look at the frequency of usage.

Frequency of Usage

Although you may spend hours or weeks building a keyword list that appears to cover all the possible terms anyone might ever use that's vaguely related to your product, in truth almost all products will have a 'core' of terms that are most frequently used in search terms. In many cases their frequency could be dramatically higher than any of the other terms. For example, in a list of 100 keywords, it may be that just five account for over 90% of all the impressions received.

Cost per Click & Conversion Rates

OK, so should you just dump the other 95 words then? Well, maybe, but you've got to look at the CPC and the conversion rate (how often a click results in a sale/sign up) of the words. Although the 5 words may get the most clicks and impressions, they may also be the most expensive words with the lowest conversion rate. It may be that you'll need to pick and choose amongst the top 10 or 15 words to find those that are the most inexpensive and offer the best conversions.

CTR & Daily Budget

Your daily budget also has something to say here. Let's say you have two keywords that have the same CTR and conversion rate, which are quite acceptable. But one has an average CPC of $0.50 and the other of $1.00. In this case you can receive only half as many clicks from the more expensive word and, since the conversion rates are the same, this means half as many sales. In the real world you'll have to check that both these words have enough potential clicks per day to satisfy your budget but this is quite often the case.

Effect on Account Performance

Many users don't appreciate that poorly performing keywords (and ads) have a negative effect on overall account performance and, ultimately, the CPC of your keywords. There is little point in having a keyword within a group that has great performance if there are another 200 in the same group that are terrible. Ad group keyword lists should always only contain words that have an acceptable performance, all others should be removed.

All of the above

So, there's a lot to think about, but if you take one thing away, it's that all the advice you'll see from professionals and Adwords themselves, is that keyword lists per group should really be in the range of 10-50 words at most. If you think you need much more than this, it's worth considering why...

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