How Keyword Research Is Tanking Your ROAS
November 20, 2012
Keyword research is a vital part of every PPC manager’s task list. Hitting up your organic keyword data, hitting up the search query report, whatever you do: it’s all in the name of expansion, expansion, expansion. You want your account to be huge and always have that conversion and ROAS line creeping up and to the right.
But what does that leave us with? Probably an account with a TON of keywords, right? And, I’m sure you do a good job when optimizing to make note of keywords spending above goal without bringing in revenue to either lower bids or pause them. Hopefully you do this for keywords with a high loss as well. But what about all those keywords you’ve added with hopes of gaining more revenue and conversions that haven’t spent very much, but haven’t converted either? You still have hope for them, right? Maybe they’re long-tail and low volume, but just feel like they should work. What do you do with these guys? How many have you accumulated over the years of managing your account?
Well, I decided to dive in and look into this in my accounts. The results were pretty awful.
I really like using colors in excel, so I apologize for the ambiguous titles. However, the “white keywords” are keywords that have spent less than $20 during this time, and therefore don’t have enough data to make a call either way on.
Here’s the data for another account:
Again, “white” keywords didn’t spend enough to give me enough data to decide if the individual keyword was good or not. But I can see that they’ve had a loss of almost as much as the keywords I decided were awful.
So, what can you do? You want to always be growing your accounts and finding new, revenue generating keywords is a big part of that. My advice is to set aside a little test budget each month for “white” keywords. Don’t just throw keywords in your account in mass uploads and forget to look at how they’re spending as a whole. Set aside a “white keywords” budget. You should be able to figure, mathematically, how much spend you can tolerate without tanking ROAS to test new keywords. The rest of the budget should be spent on keywords with proven track records of revenue generation. Of course, seasonality and market changes will occur that can change keyword performance, but this is the general guideline.
What do you guys think about this? Have you performed this analysis on your eCommerce accounts? Do you already work a budget for these “white keywords” into your strategy?
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