It’s All Relative

Since CPC prices are often closely linked to the potential profitability of a sale from that keyword, the CPC price is often a mute point. A ‘bad credit history remortgage’ could be worth $15,000 profit to a remortgage broker, so having CPCs in excess of $50.00 can deliver a strong return on investment.

On the other hand, the keyword ‘New York weather’ has little commercial intention, so keywords such as this tend to benefit from low CPCs.

While this relativity of CPC prices makes CPC comparisons across sectors rather meaningless, most PPC advertisers would jump at the chance to pay lower CPCs. So below are 4 strategies I’ve found useful for achieving lower CPCs, while still maintaining a strong conversion rate.

Source: Wordstream

1. Use Long Tail Keywords

Long-tail keywords are those highly-specific, infrequently searched-for phrases such as ‘all inclusive holidays to Paris from Sydney’, which turn up in your search query report. Since they tend to have less advertiser competition, they can be considerably cheaper than more generic keywords such as ‘Paris holidays’.

What’s more, since people making long-tail searchers have arguably carried out the large majority of their pre-purchase research, and are often further along in the buying cycle, long-tail searches can have a considerably higher conversion rate.

Cheaper CPCs and higher conversion rates were exactly what I found when analysing search queries containing different numbers of words. Searches containing 4 or more words performed consistently better than searches containing fewer than 4 words.

Recommendations:

• Use Google’s Keyword Tool to research keywords which have approximately 100 searches/month. These tend to get overlooked by a large number of PPC advertisers.
• Take advantage of the ‘more like these’ feature in Google’s Keyword Tool to continue to build your list of long-tail keywords.
• Run a search query report to look at the search queries which get matched to your keywords. If they are relevant, and have a decent click volume, add them as new keywords and give them their own tailored ads. This way, instead of long-tail searches being matched to your more generic keywords, they will now be matched to longer keywords, giving you more control over ad messages and bid optimisation.

2. Research Uncompetitive Themes

Keywords which have less competition often have lower CPCs. Finding keyword with less competition often requires you to think outside the box, although with the right tools and approach you can be diversifying your keyword portfolio in no time.

Recommendations:

• Plug the URL of a competitor’s website into Google’s Keyword Tool and see what comes up. If their products and services are worded differently to yours, it can uncover some previously-overlooked terminology.
• Mine your search query report to uncover themes which you previously overlooked. Don’t worry if a search query has only a handful of clicks –you’re trying to research new themes from searches which have matched to your existing keywords, so click volumes would likely be much greater if they are added as new keywords.
• Look for numbers which frequently crop up in your search query report. If you’re selling holidays, consider how people type the dates into their search, such as ‘France holidays December 2011′, or ‘winter 2012 skiing deals Queenstown’. If you can provide tailored ads which cater for these date searches, you will likely receive high click through rates (CTR), high Quality Scores, and low CPCs.
• Use Google Insights for Search to find breakout searches. These are searches which have recently increased in popularity by at least 400%, and can be excellent opportunities for highly-profitable keyword targeting due to their relatively low competition and relatively low CPCs.
• Ask friends or family how they might search for your products and services.

3. Use Modified Broad Match

Modified Broad Match is a variation of broad match, but allows you greater control over the types of search queries which trigger your ads. By placing a plus (+) sign in front of certain words in your keyword, Google will only match your keyword to searches which contain all of the words with a preceding plus sign.

So if your keyword was ‘+cheap +deals to +Rome’, you can be sure than any searches matching to your keyword must contain the words ‘cheap’, ‘deals’, and ‘Rome’.

Modified broad match is a great way to improve the quality and profitability from your AdWords campaigns. In some recent research I carried out on modified broad match keywords, keywords with a greater amount of broad match modification tended to have considerably higher CTRs and significantly lower CPCs.

Recommendations:

• Take advantage of modified broad match. It allows you greater control over the types of searches which trigger your keywords.
• Be mindful that restricting the match types of your keywords may reduce your click volume, so compensate for this by researching additional keywords and themes.
• Broad match generation can also be a useful tool to allow your more generic non-modified broad match keywords to catch relevant search traffic which have not yet been added as modified broad match keyword.

4. Be Relevant

Despite PPC often being dubbed as saturated and highly-competitive, the truth is there are massive opportunities everywhere for PPC advertisers to achieve high profitability by providing highly-relevant and helpful ads, which engage with their target audience.

Searches on Google are now becoming increasingly diverse, complex, and unique, and users are expecting a higher degree of relevancy and helpfulness from search results. If you can be the advertiser which caters for the specific needs and requirements of searchers, visitors will reward you with their wallets. And since click through rate (CTR) is a large component of Quality Score, if you can achieve a high CTR, low CPCs will naturally follow.

Recommendations:

• Create hundreds of highly-granular ad groups, each containing only a handful of very similar keywords.
• Tailor your ad messages to your ad group’s keywords. If the ad group contains keywords related to ‘Winter 2012 Queenstown holidays’, ensure your ads also mention cater for Queenstown holidays in Winter 2012.
• Run an ad group report and find your ad groups which receive a large number of clicks. Changes are those ad groups are being matched to a large number of very different searches, so could benefit from being split out. The 10% Clicks Rule is a useful tool for quickly and efficiently identifying your ad groups which could benefit from being split out. Follow the 3 part guide for step-by-step instructions of how to do this.
• Examine your ad groups with high CPCs and low CTRs. Consider how closely your search queries match to that ad group’s ads. If a gap exists between the ad group’s searches and the ad group’s ads, consider how you can make changes to boost your relevancy.

Return on Investment is the Goal

Quality Score doesn’t sell anything. Click through rate doesn’t sell anything. CPCs don’t sell anything. Improving these metrics should not be the objective of your campaign. Improving ROI should be.

All other things equal, if you reduce your CPCs by 20%, great!

But are all other things equal? In trying to reduce your CPCs, have your sacrificed volume? Have you sacrificed quality? Are paying lower CPCs simply because visitors are now less relevant and less likely to convert? Are you now missing out on more relevant and potentially more profitable searches?

CPCs or Quality Score or CTR should not be the end goal of your PPC campaign. Return on investment should be. There’s no harm in paying 50% higher CPCs if your profit increases by 60%. So only use CPCs as a guide.

By all means use long-tail keywords, search query reports, and modified broad match as a means to lower your CPCs. But make sure your sales volume and ROI also rises as a result.

Alan Mitchell is a Google AdWords certified PPC specialist based in Melbourne, Australia, with over 4 years running successful PPC campaigns for businesses in Australia and overseas. Find out how the specialist PPC management such as the 4 PPC strategies above can help you improve your return on investment from PPC marketing, or get in touch for more information.

But while the long tail has boasted widespread adoption throughout the search marketing community, there does not appear to be a universal agreement among PPC specialists about exactly how many words constitute a long tail keyword. Nor does there appear to be agreement about which other metrics – price, search volume, competitiveness or purchase intention – should be used in defining a long-tail keyword.

Definitions of long tail keyword length vary greatly, from the vague mention of several words and nothing more than a series of words strung together, to the less vague description of 2 or more words, 3 or more words, and usually more than 2 words in length, to the very specific combination of 3-6 words and at least three, and some times as many as five words.

One definition rejects the long tail’s use in describing keywords of 3-4 words, instead referring to them as keyword gems, while others define long tail keywords not by definition but by using examples such as ‘myspace’ vs. ‘is myspace free to use in china’.

I’m hardly any better at providing a clear definition. In a previous post I wrote on the benefits of long tail keywords, my confusion over what exactly constitutes a long tail keyword made me shirk away from providing a clear definition, and I opting for a cop-out by providing an example of a long-tail keyword (e.g. ‘cheap remortgage for bad credit history’) along with a more generic keyword (e.g. ‘remortgages’).

So in search for a more definitive definition of long tail keywords, let’s break the long tail keyword down into its alleged factors to uncover its fundamental, defining properties and determine a clear definition of the long tail. Based on the above definitions of the long-tail, the following 5 characteristics all seem to play an important role:

• Number of words in keyword

• Search volume of keyword

• Competitiveness of keyword

• Price of keyword

• Purchase intention of keyword

Let’s look at each of these 5 areas to see how useful they are in describing long tail keywords:

1. Number of words in keyword

It makes sense that a long-tail keyword contains a greater number of words than a short-tail or head keywords. But exactly how many words should a long tail keyword contain?

Although some definitions of long tail keywords specify a lower and upper limit for the number of words it must contain (e.g. 3-6 words), it makes little sense placing an upper limit on the maximum number of words a long-tail keyword can contain.

The more important question here is exactly how many words should a keyword contain until it is classed as long tail? In the definitions we looked at earlier, we’ve had mentions of anything over 2 words, anything over 3 words, and anything over 5 words.

Then there is the question of whether the number of words in a keyword really matters at all. For example, a short keyword such as ‘antique bingo clothing’ (3 words and very niche) might be considered long-tail, whereas a longer keyword such as ‘car insurance for women’ (4 words and very popular) might be seen as highly competitive and therefore not a long tail keyword.

So perhaps the number of words isn’t useful in defining long tail keywords. Perhaps search volume or competitiveness might be better.

2. Search volume of keyword

Again, it makes sense that keywords with low search volume should be classified as long tail keywords.

But exactly how low a search volume must a keyword have before it is labelled as a long tail keyword? 10 searches a day, 10 searches a month, or 10 searches a lifetime?

While long-tail keywords surely must have less search volume than highly generic keywords, clearly the definition of a long tail keyword should again not depend on a finite number. In searching for a definition, all we can say is that long tail keywords are generally searched for in less volume than more generic keywords.

3. Competitiveness of keyword

What about the competitiveness of a keyword? Are keywords with little competition long-tails?

If so, exactly how much advertiser competition is needed before a long-tail keyword becomes long tail no more? While Google’s keyword tool provides a scale of advertiser competition ranging from 0 to 1 to represent the competitiveness of a keyword, it does not have much practical use in reliably distinguishing between generic keywords and long tail keywords.

So once again, while competitiveness is definitely a defining factor in long-tail keywords, we can only say that long tail keywords tend to have less competition than those which are not long tail. We can’t say specify the exact amount of competition needed to distinguish between generic keywords and long tail keywords.

4. Price of keyword

What about the price of a keyword? Surely long tail keywords are those super cheap phrases you can bid on for $0.10?

Well, since the price of a keyword is linked to its competitiveness, it makes sense that long tail keywords would be cheaper than shorter keywords. And it also makes sense that the cost per click prices should be included in a definition of long tail keywords. But once again, it’s impossible to define exactly where the long tail cost per click cut-off lies. And since keyword prices are also closely linked to the purchase intention and the amount of potential profit which might arise from a sale, keyword prices naturally vary between industries and markets. Again, all that we that long tail keywords are generally cheaper than shorter keywords.

5. Purchase intention of keyword

Purchase intention is interesting. The theory behind purchase intention is that people who make longer, more specific search queries (e.g. ‘casio exilim ex-fh100 digital camera’) are more likely to have already carried out the majority of their pre-purchase research compared to people making shorter, generic searches (e.g. ‘digital cameras’). They are likely to be more informed about their buying needs, and therefore more likely to convert.

Longer keywords have long been known for their higher conversion rates, and many a PPC advertiser’s campaigns are built around a huge number of long tail keywords due to their strong conversion rates.

But does buying intention really form part of the definition of a long tail keyword? While it is true that some longer keywords (e.g. ‘casio exilim ex-fh100 digital camera’) exhibit high buying intention, other longer keywords (e.g. ‘how do clouds form in rainforests’) display little or no buying intention. Similarly, some shorter phrases (e.g. ‘buy apple ipad’) show significant purchase intent, while other shorter variations (e.g. ‘capital of peru’) display little or no intention to buy.

Purchase intention is therefore rather tenuous in its use in describing a long tail keyword.

RELATIVE

While it seems that word count, search volume, competitiveness, and price all play some kind of role in defining a long tail keyword, there are too many exceptions for word count, search volume, competitiveness, and price to becoming defining features of the long-tail:

A keyword which receives 10 clicks a day might be labelled as long-tail to a large advertiser, and labelled as generic to a small, niche advertiser. The keyword hasn’t changed, but the description of it has depending on the circumstance.

Similarly, the keyword ‘casio exilim digital cameras’ might be seen as an uncompetitive long tail keyword to an advertiser spending $500,000/month on clicks, while instead being seen as a highly-competitive generic keyword to a smaller advertiser spending only $50/month on clicks.

Perhaps long tail keywords should not be defined in terms of absolute measures, such as number of words or number of clicks, but instead only used as a relative measure when comparing keywords? Rather than saying:

“This keyword here, ladies and gentlemen, is a long-tail keyword”

Perhaps it is better to say:

“This keyword here, ladies and gentlemen, is more long-tail than this other one”

 
How would you describe a ‘long tail keyword’? In terms of searches, clicks, CPCs, and competition? Or more in terms of a relative measure to compare one keyword (or set of keywords) to another? Your comments welcome below.

Alan Mitchell is an experienced Google AdWords consultant helping businesses in Australia increase their return on investment from PPC marketing. For more information on how a long-tail approach to PPC can benefit your business, get in touch today for a free consultation.

While this extra degree of control was largely welcomed by PPC advertisers, modified broad match no doubt adds an extra degree of complication to Google AdWords management. However, as we will see from four seperate modified broad match experiments, if modified broad match is used correctly, it can be extremely effective in significantly increasing click through rates (CTR) and lowering cost per click (CPC) prices of Google AdWords campaigns.

Infinite Matching Possibilities

Modified broad match isn’t just the fourth match type. Modified broad match is the infinite match type. Whereas previously it was only possible to match a keyword in three possible ways, with modified broad match it is now possible to potentially match a keyword an infinite number of ways. The only limit to the number of matching possibilities using modified broad match is the length of the keyword itself.

Say you wanted to bid on the keyword ‘cheap hotels melbourne’. Previously there were only three possible ways you could match this keyword – exact, phrase, and broad:

1. [cheap hotels melbourne] – exact match
2. “cheap hotels melbourne” – phrase match
3. cheap hotels melbourne – broad match

Now, with modified broad match, adding plus signs in front of certain words in your keyword forces those words to be included in the search query. As any word with a preceding plus sign must be included somewhere within the user’s search query, it is now possible to better control the relevancy of PPC traffic. However, this extra control means more possible customisation – there are now a 10 possible matching combinations for the keyword ‘cheap hotels melbourne’:

1. [cheap hotels melbourne] – exact match
2. “cheap hotels melbourne” – phrase match
3. cheap hotels melbourne – broad match
4. +cheap +hotels +melbourne – modified broad match
5. +cheap +hotels melbourne – modified broad match
6. +cheap hotels +melbourne – modified broad match
7. cheap +hotels +melbourne – modified broad match
8. +cheap hotels melbourne – modified broad match
9. cheap +hotels melbourne – modified broad match
10. cheap hotels +melbourne – modified broad match

That’s 10 possible matching combinations if the keyword has 3 words, 18 possible matching combinations if the keyword has 4 words, and 34 possible matching combinations if the keyword has 5 words. It doesn’t take long to realise that modified broad match creates a huge number of possible matching combinations – each which triggers its own unique range of search queries.

While these numerous matching possibilities no doubt add extra complication to Google AdWords management, if modified broad match is approached strategically it can be hugely effective in improving Google AdWords campaign performance. Over the course of 4 AdWords campaign experiments on modified broad match, we will see how modified broad match can lead to significant increases in click through rate, while at the same time significantly reducing cost per click prices.

Experiment 1 – Four Keywords

Firstly, let’s look at a small-scale test which was carried out on an AdWords account over the last 2 months. Below are results for a hotel name keyword (broad match), along with 3 modified broad match variations. Each of the 4 keyword combinations were given their own ad group, the same ads, and the same keyword bids. Over the 2 month test period, each keyword combination received over 200 clicks.

While quality score, average position and average cost per click prices were very similar for each of the combinations, click through rate and conversion rate were significantly higher for longer keywords and those with a greater degree of broad match modification. Click through rate rose from 1.36% to 2.99% to 3.81% to 4.65% as the keyword increased in broad match modification, while conversion rate similarly rose from 3.03% to 3.17% to 4.13% to 4.23%.

Although the experiment was on a small scale using only a handful of keywords, and there could potentially be multiple causes of uncontrolled bias which could have influenced the results, the findings strongly suggest that longer keywords with a higher degree of broad match modification achieve better results than shorter keywords with little or no broad match modification. Considering that longer, modified keywords are more specific in their nature, this is hardly surprising.

Experiment 2 – Multiple Keywords

To provide a more comprehensive analysis of the performance of modified broad match, modified broad match was rolled out across two separate test accounts. Again, the testing time period was just over 2 months, and each test account received over 2,000 clicks. While different keywords had different bids, largely due to their differing levels of competition, care was taken to ensure each match type variation of the same keyword had the same bid.

In test account 1, exact match performed significantly better than the other match types in terms of click through rate (CTR). Phrase, broad and modified broad match had similar click through rates, although average cost per click prices were much lower for phrase match keywords. Although there was little difference in CTR between broad and modified broad match, modified broad match had a 10% lower average cost per click, and a Quality Score comparable to exact match.

In test account 2, however, the story was much more conclusive. Exact match was this time the worst performing match type in terms of click through rate, while Quality Score of exact match was considerably lower than the other match types. Modified broad match had a higher click through rate than standard broad math, although average cost per click prices were slightly higher. However, once again, modified broad match boasted the highest Quality Score, suggesting that modified broad match keywords were perceived as highly relevant for the searches they triggered.

While both test accounts provided results which were largely promising for advocates of modified broad match, the differences in match type performance between the two accounts suggest a more investigative analysis is needed.

Experiment 3 – Amount of Modification in Keyword

In experiment 1 we found that although the sample size was small, keywords with more broad match modification tended to perform better than keywords with less broad match modification. To test the accuracy of this finding, keywords across the two test accounts were grouped according to the number of plus signs they contained. A keyword which contained 4 plus signs for example, meant that those 4 words must be included somewhere within the user’s search query.

Once again, account 1 provided little evidence that more broad match modification resulted in higher click through rates. Although click through rates increased for keywords with 4 or 5 modified words, click volume was significantly lower for these longer words, making it hard to provide a conclusive result. Cost per click (CPC) prices, however, were more conclusive, with CPC prices falling steadily as the amount of broad match modification increases.

In test account 2, not only did cost per click prices fall for keywords with more broad match modification, but click through rate showed a more convincing trend. Quality Scores remained relatively similar across all keyword groups.

Although the results reflect favourably on the use of modified broad match, with keywords having more plus signs generally performing better than those with less plus signs, the results do not take into account the number of words in the keywords which were not broad math modified.

Experiment 4 – Amount of Modification vs. Non-Modification in Keyword

To assess the performance of keywords with differing number of modified and non-modified words, keywords were grouped according to the number of words they contained vs. the number of which were modified. A keyword such as +cheap +hotels melbourne +4 +star, for example, contains 5 words, of which 4 words were broad match modified.

The results show that keywords with a high percentage of their words broad match modified had click through rates considerably higher than keywords where only a few (or none) of their words were broad match modified. While longer keywords also performed better than shorter keywords in terms of click through rate, as expected from long-tail theory, keywords with a higher number of broad match modified words tended to have a higher click through rate.

Similarly, keywords with a greater amount of broad match modification tended to have lower cost per click prices. Keywords with 0 or 1 plus sign were generally expensive while keywords with 3 or 4 plus signs were considerably cheaper.

Although Quality Score was higher for keywords containing a greater number of words, Quality Score remained relatively constant for keywords of varying broad match modification. Quality Score, however, was relatively high across all keywords, suggesting a strong degree of relevancy across the campaigns.

Conclusion

Although exact match was found to perform very well, modified broad match outperformed phrase match and standard broad match in both test accounts. Looking at keywords with different amounts of broad match modification, the results suggest that broad match modification can be incredibly useful in increasingly click through rates and reducing average cost per click prices for Google AdWords campaigns. While keywords containing a greater number of words will naturally tend to achieve higher click through rates and lower cost per click prices, as expected from long-tail theory, the findings suggest that incorporating modified broad match into your long-tail strategy can provide superior results on keywords of all word lengths.

While modified broad match presents a great opportunity for PPC advertisers to improve the performance of their campaigns, it also allows advertisers to increase their control over the types of search queries which match each of their keywords. If modified broad match is rolled out strategically and methodically, with highly-tailored ads closely matching the keywords in each ad group, there is no reason why modified broad match can’t be a stepping stone towards even greater results.

How have you found modified broad match? Did you see similar results in CTR and CPCs? Did modified broad match affect your conversion rates? Share your thoughts and experiences on modified broad match below.

Alan Mitchell is an experienced Google AdWords consultant helping businesses in Australia increase their return on investment from PPC marketing. For more information on how a strategic approach to modified broad match can benefit your business, get in touch today for a free consultation.

Long-tail keywords are those low-volume, obscure, infrequently searched-for keywords that turn up in your search query reports. ‘Cheap remortgage for bad credit history’ is one example of a long-tail keyword. ‘Remortgages’ is not.

The theory goes like this:

• Long-tail keywords, en masse, can provide significant search volume (high impressions)
• Long-tail keywords have less competition than generic keywords (lower cost per click (CPC), higher click-through rate (CTR))
• Long-tail keywords are more specific than generic keywords, so ads can be better tailored to match the searcher’s needs (higher CTR, higher Quality Score, less wastage from irrelevant searches)
• People making long-tail searches are often further along in the buying cycle and more willing to buy than people making generic searches (higher conversion rate)
• These lower CPCs, higher CTRs and higher conversion rates mean long-tail keywords can be extremely profitable (lower cost per acquisition (CPA))

So are long-tail keywords all they are cracked up to be? Are they worth all the time, effort and commitment they require?

In short: yes.

Over the course of this article you’ll see exactly how search volume, CTR, CPCs, average position, conversion rate and CPA differs for searches containing different numbers of words, and how long-tail keywords can benefit your business immensely. Using three months of real Google AdWords campaign data, you’ll see that long-tail searches outperform generic short-tail searches on almost every measure, and provide a great opportunity to connect with customers which is generally not being taken by the majority of advertisers.

1. Search Volume (Impressions)

Let’s start with search volume. Do people make long-tail searches in any meaningful volume?

Look at the example below. Although 1 and 2-word searches may be under-represented in the example (the account has a natural bias towards keywords of at least 3 words), it is clear that as the number of words in a search query increases beyond 3, the number of searches made using that that number of words falls.

This isn’t surprising. You would of course expect search volume to drop as searches start becoming obscure and lengthy. It is little surprise that more people are making shorter searches such as as ‘cheap televisions Brisbane’ (3 words) instead of longer searches such as ‘low cost Sony Bravia television shops in Brisbane’ (8 words).

What is worth noting, however, is the power of these long-tail keywords en masse. Added together, searches of 5 words or more accounted for 21% of all impressions. While long-tail keywords may be individually insignificant, a PPC campaign with thousands of long-tails can be a serious source of additional traffic.

Fact: Long-tail searches have significant search volume

2. Click-Through Rate (CTR)

Another common belief among search marketers is that click-through rate (CTR) is higher for long-tail keywords. Their reasoning being:

1. Long-tail keywords have less competition, so there is a higher chance someone will click your ad
2. Long-tail keywords are more specific in their requirements, so you can write a more targeted and relevant ad to encourage the searcher to click

While the first point is perhaps rather tenuous (Google’s broad-matching mechanism often sends long-tail searches to advertisers’ short-tail keywords), the second point is definitely true. If someone searches for ‘cheap Sony Bravia 46 inch televisions’, and your ad mentions the words ‘Sony Bravia’, ’46 inch’ and ‘televisions’, perhaps with latest prices for that model, it makes sense that your ad will be more appealing than a generic ‘Sony televisions’ ad.

Let’s have a look at CTR for searches of different word counts. While searches of 1, 2 and 3 words have a relatively low CTR, CTR appears to increase significantly for searches of at least 4 words. CTR, it seems, is considerably stronger for long-tail keywords.

Fact: Long-tail keywords can achieve a higher CTR, as long as ads are tailored to the search query

3. Cost Per Click (CPC) & Average Position

Many search marketers also believe long-tail keywords are cheaper. They have less competition, fewer people bidding on them to drive up their prices, so CPCs will be kept relatively low.

So are long-tail keywords cheaper than generic keywords?

To answer this question, it is important to bring average position into consideration. Since CPCs and ad rankings are closely connected (a higher CPC typically means higher ad ranking), both average position and CPCs need to be considered together.

First, let’s look at CPCs. For searches of 13 words or more, CPCs do tend to be cheaper. For searches under 13 words, however, CPCs tend to be very similar. A 9-word search query costs pretty much the same price as a 4-word search query. CPCs do fall very slightly as word length increases from 3 to 12 words, but I would hardly call that significant.

Now let’s look at average position (a higher bar represents a higher ad ranking). For 1, 2 and 3-word searches, ad ranking is relatively low, and ads are appearing near the bottom of the first page. As word length increases, however, ads are shown significantly higher. They are appearing in the top positions.

So although CPCs were relatively similar for searches of all word counts, long-tails were often shown in a higher position.

When you think about it, this makes perfect sense. When you set a maximum CPC bid for each keyword, Google will show you as high as possible without going over your maximum bid. If long tail keywords are cheaper, Google won’t necessarily charge you less. It is in their interest to charge you as much as possible, so they will instead keep your CPCs close to your maximum bid but show you in a higher position.

Fact: Long-tail keywords are cheaper for the same ad ranking, or the same price for a higher ad ranking

4. Conversion Rate

So we’ve seen that long-tail keywords have a significant search volume. They exhibit a strong CTR and are often cheaper than their short-tailed rivals. But clicks are no good if people don’t engage with your site or part with their cash. It’s often conversion that really matters.

So are long-tail searches more likely to convert?

Many search marketers seem to think so – their reasoning being that people who make longer, more specific searches have already done their research and know exactly what they want. They are further along in the buying cycle so are more likely to open their wallet.

Let’s have a look at conversion rate for searches of different word counts.

It’s a pretty convincing trend. As the number of words increases, so does conversion rate.

Fact: Long-tail keywords have a higher conversion rate

5. Cost Per Acquisition (CPA)

Finally, what does this mean for CPA, profitability, return on investment (ROI)? Is it cheaper to acquire a customer through the long-tail?

Let’s have a look at the CPA column.

Again, there appears to be a clear trend between word count and CPA. Conversions from long-tail searches seem to be cheaper than conversions from generic, short-tail searches.

And it’s not just one or two conversions which are coming through long-tail searches, either. Remember how long-tails of 5 words or more accounted for 21% of all searches? Well, those 21% of long-tails generated a massive 40.5% of all conversions.

Fact: Long-tail keywords have a lower cost per acquisition and can be extremely profitable

Long-Tails Are Your Friend

As we have seen, the benefits of long-tail keywords are many:

1. Significant search volume
2. Higher CTR
3. Cheaper CPCs (or higher ad ranking)
4. Higher conversion rate
5. Lower CPA

Quite simply, they outperform generic, short-tail keywords on every measure.

Don’t get me wrong, long-tails shouldn’t replace your short-tail keywords. Short-tails, if used wisely, are great for building interest and awareness at the early stages of the buying cycle. Your long-tail keyword strategy should complement your short-tail strategy.

So by all means continue showing on your high-volume keywords – after all, they may be your bread and butter that keep your business afloat. But the next time you work on you AdWords account, spend some time researching relevant long-tail keywords. Try to think what people are actually searching for and use keyword tools to help. Structure your keywords into closely-themed ad groups and tailor your ads and landing pages to cater for these specialised long-tail searches.

Your Moment to Shine

Of course, researching thousands of keywords and structuring them into hundreds of closely-themed ad groups, each with tailored ads and landing pages, is by no means easy. It will take considerable time, effort and dedication, not to mention the many hours of keyword and search query analysis, ad group expansion and ad copy testing once your keywords are live.

But think about your target audience for a minute. They are calling out for someone to meet their needs in a personalised and relevant way. It’s the age of social interaction, and people are sick of seeing generic ad after generic ad. And despite many advertisers claiming they are “doing this already”, consumers are not currently getting a personalised and relevant service (see Relevancy: The Holy Grail of PPC).

If you can be the advertiser who understands your audience using search query analysis, if you can cater for their individual needs with relevant ads and landing pages, if you can be the one who makes a mark in your industry, customers will reward you with their wallet. It’s your opportunity to stand out from the competition. So take it.

Alan Mitchell is an experienced Google AdWords consultant helping businesses in Australia increase their return on investment from PPC marketing. For more information on how a strategic long-tail approach to PPC can benefit your business, get in touch today for a free consultation.

But despite the reassuring nature of campaign budgets and the ease at which they can control your spending, they should not be used to control your spending. Instead, cost per click (CPC) bids should be your tool of choice for spend management.

More clicks, no extra spend

To understand why, suppose the daily budget for one of your campaigns is set to $100/day. Each click costs you $1.00 and your ads are showing in position 3.0. Your daily budget of $100 is being hit, so you receive 100 clicks/day.

Since your campaign is reaching its daily budget, your ads are not showing for all eligible searches. Depending on your campaign ad delivery settings, either your ads are not showing later in the day (accelerated delivery), or they are only showing intermittently (standard delivery). In either case, you are missing out on potential customers.

Now suppose you were to reduce your bids by 25%. Your average cost per click drops to $0.75 and your ads are now showing lower down in position 5.0. But since your ads are now appearing throughout the whole day for all eligible searches, you receive more clicks. Instead of 100 clicks, you now receive 120 clicks. Daily spend is now $90 (under your budget of $100).Ceteris paribus, reducing CPCs for campaigns which hit their daily budgets is likely to give you more clicks for no extra (or possibly less) spend. That’s more visitors, for no extra spend. Assuming that all clicks are of equal value to your business, and average position does not affect your conversion rate, these extra clicks are likely to mean more sales and a higher ROI.

More clicks, same CPCs

Alternatively, leaving CPCs constant and instead increasing your daily budget, will likely result in more clicks for the same average CPC. That’s more visitors, more potential customers, without paying a higher per-customer premium (CPC) for the privilege.The bottom line is this: campaigns which hit their daily budgets are inefficient.

For this reason, it is important to check on a regular basis that each of your campaigns are well within their daily budgets. If you notice any of your budgets are being reached, or ore close to being reached, alarm bells should start ringing.

Check your budgets

One simple way to keep on top of daily spending is to log in to Google AdWords, select ‘yesterday’ as the time period and compare the ‘cost’ and ‘daily budget’ columns for each of your campaigns. If any of your campaigns are hitting – or are close to or hitting – your daily budgets, either increase your budget (if extra spend is financially viable), or reduce your CPCs.

A more comprehensive approach, which looks at campaign costs a longer time period, gives you a better understanding of daily trends. By looking at a month’s worth of data (instead of just ‘yesterday’), you will be more informed and better equipped to make changes to your CPCs and budgets.

Download a campaign report

Log in to Google AdWords and create a new report. Select ‘campaign performance’ as the report type (since daily budgets are set at campaign level), select ‘daily’ as the unit of time and enter a date range such as ‘last 30 days’. In ‘add or remove columns’, ensure ‘daily budget’ is ticked. Leave all other options as default. Run the report, and export it to Excel.

Identify overspend

Once you have the report in front of you in Excel, create a new column to identify the percentage of budget spent by each of your campaigns each day, such as in the example below. Once you have done this, you will then be able to see how close each of your campaigns came to its daily budget.

Suppose you are a retailer of European holidays. You have two campaigns – one for Venice and one for Amsterdam. Both campaigns have a daily budget of $100.Looking at the % spent column, it is clear that the Venice campaign is regularly reaching its budget. Reducing CPCs for Venice keywords would likely result in more clicks for no extra (or possibly less) spend.

By all means continue to set daily budgets to protect against freak spikes in traffic which you cannot afford, but make sure CPCs – rather than budgets – are your primary tool for spend management.

Summary

When you notice any of your campaigns regularly hitting daily budgets, ask yourself a few questions:

1. Are you achieving less than satisfactory results from your current AdWords spending? If so, reduce your CPCs – you will likely see more clicks for no extra spend.
2. Are you achieving satisfactory or good results? Do you have extra funds available for AdWords? If so, increase your daily budgets – you will likely see more clicks for the same CPCs.

Either way, it’s a win-win. You will either get more clicks for the same budget, or more clicks for the same average CPC. Effective spend management is essential for a performing PPC campaign, so make regular budget checks a priority.

Alan Mitchell is an experienced Google AdWords consultant helping businesses in Australia increase their return on investment from PPC marketing. For more information on how efficient PPC budget management can benefit your business, get in touch today for a free consultation.