Posted By
Wesley Picotte on 12/03/2009
In my last post, I wrote about budget management in paid search campaigns. In it I describe a paid search management tactic called campaign segmentation, and how to create multiple, targeted campaigns from a single campaign's ad group structure. By doing so, you can gain significant control over your paid search investment in a few simple steps.
In this post, I'll talk about ad group segmentation, another fundamental approach to improving paid search campaign performance. The potential benefits for segmenting your paid search campaign ad groups vary, but primary amongst them are improved click-through rates, improved conversion rates, and improved quality scores. Doesn't sound so bad, right? And, like campaign segmentation, ad group segmentation is fairly straightforward.
Essentially, the process involves dividing your current ad groups into smaller, more tightly related keyword segments. At White Horse, we consider a variety of rationale in order to determine our segmentation approach on a client-by-client basis, but a good place to start is by examining click-through rate (CTR).
CTR is a measure of value for your paid search campaign; you can use it to determine how effectively each of the terms within your keyword portfolio drive site traffic, and search engines use it as a basis for determining quality score. It could easily require a series of blog posts to fully articulate the functions of quality scores and the parameters that affect them; if you're not already familiar with this mechanism, understand for now that it is a critical component to successful paid search advertising that governs bid strategies, campaign share of voice, and more.
Back to CTR...search engines make the basic assumption that a high CTR signifies high relevance between a search term and your text ad. This then equates to a good value or experience for their users and over time, it will cause an engine to associate strong quality scores to a campaign. Simple enough, right? High CTR, high value, good quality score—your paid search investment is paying off.
Well, sort of. CTR doesn’t always denote high business value, and here is where you need to be careful when contemplating ad group segmentation. White Horse paid search campaigns are all tied to site-side success metrics; whether lead form submissions or direct purchases, we measure the volume of site-side transactions contributed by each term and base our segmentation on this—on value to the business (or client). Secondarily, we look for those terms that have a high search volume and strong CTR. The result of this combination, ideally, is high volume ad groups with high value for both the campaign (from the search engine perspective) and the business (from the advertiser's perspective).
In my post on campaign segmentation, I illustrated the concept through an example scenario in which a camera retailer creates three campaigns from an original campaign holding three distinct ad groups, thereby gaining significantly more control over its paid search budget and ultimately over paid search performance. Imagine here, too, that you’re that camera retailer, and that you’re using paid search to drive online sales of film. The term “camera film” has very high search volume, and your well-written text ads generate a good CTR from it. In fact, out of all of your film-related terms, “camera film” generates the majority of clicks, and consequently of cost. Since it’s a generic term, though, and since the 70 text characters in a text ad can provide only a limited amount of qualification, the traffic that the term drives doesn’t convert well. See the problem?
That high CTR equates to a high quality score—good for the campaign as far as the search engines are concerned—but the high cost (more clicks equals more cost) and low relative conversion hurts your bottom line.
Alternatively, consider the film-related term “Fuji Velvia 100F.” It is far more specific—it described a particular product from a particular company—and since you just happen to specialize in Fuji film, you can potentially derive much more business value from it. Thus, the rationale for your ad group segmentation begins to crystallize.
Another benefit to ad group segmentation is that by creating smaller groups of terms that are more closely related to one another based on their subject matter, you also create the ability to craft text ads that are much more closely aligned to the originating search term. The result, typically, is an improvement to CTR, which provides a waterfall of potential paid search campaign benefits including better quality scores, reductions to costs-per-click, more qualified site traffic, etc. Additionally, you can focus on developing creative that qualifies people more effectively based on generic search terms*, while ad groups like 'Fuji Film' or 'Fuji Velvia' would allow you to write very customized creative.
*A side note about generic searches—think dynamic landing pages, which offer a very flexible way to optimize against different types of search traffic…a subject for another post.
If you have questions about this or other paid search tactics, feel free to contact me at wpicotte@whitehorse.com.
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