Not Keyword Selection
Pardon?
What I’m saying is that you should not select keywords solely on their ability to convert. You should get rid of keywords that have got a 0% conversion rate after a reasonable number of clicks, but if your campaign has an overall conversion rate of 5%, then getting rid of a keyword with a 3% conversion rate may not be in your best interests.
Remember, the objective is to maximise profits, and improving your conversion rate is merely a way to do that.
There are two situations to consider here - either you are spending your full daily budget or you aren’t.
If you aren’t then clearly, any keyword that is making you money should be kept, and any that isn’t should be optimised (and removed if it can’t be made profitable).
If you are, then you should always look at the keywords that generate the lowest ROI, and either remove them, or make them more profitable (see later). These are not necessarily the ones with the lowest conversion rate.
Suppose that you’ve got two keywords, [leather chair] and [reclining chair].
Their performance figures are as follows:
Leather Chair
Impressions: 2,500 Clicks: 100 Sales: 10 Cost Per Click: £0.30 Profit Per Sale: £30.00
Total Cost = 100 * £2 = £200 Total Income = 10 * £30 = £300 Total Profit = £100 ROI = 100/200 = 50%
Reclining Chair
Impressions: 4000 Clicks: 200 Sales: 10 Cost Per Click: £1.00 Profit Per Sale: £30.00
Total Cost = 200 * £1 = £200 Total Income = 10 * £30 = £300 Total Profit = £100 ROI = 100/200 = 50%
The first keyword has a conversion rate of 10%, the second 5%. And yet both make the same profit, from the same level of spend. So, where possible, you’ve got to do the calculation, and base your decisions on which keywords make the most money per pound of spend, if your budget is restrictive.
Of course, if a keyword is getting no conversions at all, then it can’t make money. Just make sure that you give it time. If a keyword has a profit per sale of £500, and a cost per click of £0.50, you only need a 0.1% conversion rate to be profitable, so don’t panic if you’ve got no conversions after 100 clicks…
Page last updated by Steve Baker on May 11, 2008 at 7:08 pm.
2Need more professional advice? Contact our agency experts now!
Epiphany Solutions are of the UKs leading search marketing agencies. Contact us today to find out how we can help you with your Google Adwords campaign. 0870 199 6382
Google Adwords Guide
- Google Adwords Introduction
- Setting Up Your Google Adwords Campaign
- Optimising Your Google Adwords Campaign
- Maximising Your Google Adwords Conversion Rate
- Maximising Your Google Adwords Quality Score
- Optimising Your Google Adwords Bids
- Google Adwords Content Network
- Google Adwords Advert Text
- Google Adwords Management
- Google Adwords Reporting
- Google Adwords Case Study - Part 1, Setting Up The Campaign
- Google Adwords Case Study - Part 2, Optimisation
2 Responses to “Not Keyword Selection”
Back To Top ⇑Comment on 'Not Keyword Selection'
Comments, questions and feedback are all welcome. Each submission is read and replied to by one of our Adwords professionals.
As a search marketing professional, this is the most comprehensive and accurate guide I’ve read on Adwords. The only suggestion I can think of is that you might do a section (or five!) on Adwords Editor. The platform is so much easier to work in then Adwords itself.
Thanks Search Analyst.
Very good point about the Adwords Editor tool.
Expect to see one in the next couple of months.