Aug 52009

There Are No Bad Keywords

Raise your hand if you've heard someone advise advertisers to "turn off the poor performing keywords", or say "That group of keywords didn't work".

These statements betray a deep misunderstanding of a fundamental truth in PPC: there are no bad keywords!

Many many attributes of a PPC ad can be bad. An ad can have lousy copy, a poorly chosen landing page, be targeted globally when it shouldn't be, etc., but the keyword itself is almost never a problem.

This may sound like heresy. After all, I myself have written volumes on the importance of keywords, and the dangers of automated keyword generation. So, how could I say that keywords can't be bad?!?

Simple: keywords fire ads that generate traffic. The more targeted a keyword is to the advertiser's product or service and the more indicative the keyword is of buying intent the higher the quality of that traffic. Poorly chosen keywords bring in low value traffic, but here's the point: the traffic rarely has NO value. When the ROI of an ad is bad the problem isn't the quality of the traffic, it's how much the advertiser paid for that traffic. Any traffic is good traffic if the price is right; the price might be zero for really un-targeted keywords (KW "Brittney Spears Pics" for a Pet food company), but usually isn't.

Obviously, you can run into major cost overruns by launching poorly targeted keywords with "category average" bids. There's no question that learning what the traffic is worth can be expensive, and launching stupid keywords does not help the cause.

But assuming that we're not talking about keyword mistakes, but simply keywords that are general, somewhat ambiguous, or indicative of research rather than purchase the quality of the traffic isn't zero, so neither should the bid be zero. {Okay, sure, if the value of the traffic is $0.03 per visit and you need a 20% cost to sales ratio, then zero is the right bid.}

Now, we might find that for Acme furniture company, the keyword "furniture" only returns $0.30 per click in sales, and given margin structures Acme can only afford $ 0.08 per click on that term. Further, we might find that an $0.08 bid with our best possible ad copy and landing page still generates an ad on page 32 of the SERP and generates roughly zero traffic. Practically the same as turning it off.

But it is NOT the same. First, when we start talking about wide swaths of keywords rather than one or two, the affordable traffic we're talking about isn't zero. Moreover, that $0.08 bid might not keep you on page 32 forever. As other advertisers "do the math" they may find the value of traffic on that keyword isn't great for them either. As the market rationalizes that page 32 ad might find itself on page 1 at some point, generating plenty of traffic and, all importantly, at a price the advertiser can afford.

Many many advertisers and agencies make the mistake of bidding based on sunk costs. Suppose in the above example Acme started bidding $0.60 per click for "furniture". They generate tons of traffic and see that their Cost to Sales ratio is a disastrous 200%. The answer isn't to declare furniture a bad keyword, and it certainly isn't to pause or delete the phrase. The answer is to bid what the traffic is worth.

There are other techniques to improve the value of traffic on a general term. Using a combination of match-types, sniffing search logs for negative associations, restricting the syndication, culling out poor performing ips and improving landing pages; all of that should be done and not just for the "problem children".

But the the folks who say that reasonably targeted keywords "don't work" don't understand the first principles of bid management.


12 Responses to "There Are No Bad Keywords"
John Lee says:
George, To summarize, you're saying in lieu of pausing/deleting a keyword, just dramatically lower the bid *in hopes* that someday the entire market for that keyword will shift to a point where your dramatically lowered bid is once again competitive for traffic? Assuming advertisers follow the protocol you mention of "reasonably targeted keywords" I suppose this could work. My only fear is that this seems like a (insert cliche`) set-it-and-forget-it tactic. Now to really play the devil's advocate... If you do your homework and find that a keyword is driving traffic at a lowered bid, but you cannot attribute sales/conversions to that keyword (regardless of the quality of traffic) - do you still insist on keeping the keyword active? I want to agree with you, but the devil on the other shoulder just won't shut up! ; )
Hi John. I know I'm stirring the pot. My own team is on my case, too. By no means am I suggesting a set it and forget it approach. The data pours in constantly forcing PPC managers to adjust their valuations to changing conditions. What I am suggesting is this: We've seen many instances in which agencies try keywords at the top of page one, in the middle of page one and at the bottom of page one, and if none of those "work" they turn off the campaign/adgroup saying "those terms don't work". Like I say, the value of traffic on some KW may be pretty close to zero, and the difference between pausing the terms and bidding them into oblivion may seem like splitting hairs, but I'm really not talking about those terms. I'm talking about the instances where it might cost $1 to be on page one and the traffic is only worth $0.72. Don't pause the terms. Keep collecting data, even if it's thin. The landscape may shift to help you out; more data might accrue to make you think the traffic is worth more than $0.72, or maybe you just keep getting a trickle of affordable traffic on the term and that's all you can afford. "Off" is the wrong approach.
Shay OReilly says:
I couldn't agree more George. Keep stirring! The beauty of an auction is that you can choose any price for the traffic - specifically what it's worth to you. Measuring that worth and adjusting your bids accordingly are operational issues. There are tools and techniques that allow this. Capturing 'the long tail' is not just about capturing a few profitable clicks from rarely searched terms with strong economics but also capturing a few clicks from high volume terms with weaker economics. Your point about marginal cost vs fixed/sunk cost is also an important one that deserves wider adoption.
Marc Adelman says:
George, In theory I agree with you. There are no bad keywords, just bad KW - Adtext - cpc - landing page relationships. Setting below 1st page bid should also, in theory, be an action taken before killing a KW. The random nature of user searches and the ever changing competitive landscape also plays into the peaks and valley phenomena of KW performance. So one shouldn't assume that a kw-adtext-cpc-landing page relationship that has been tried and tested and still doesn't work may not work in the future. In fact, the KW - Adtext - cpc - landing page relationship should be viewed as one PPC object with several parts. This view alone will force a deeper approach towards optimization. If this relationship is deemed to perform poorly after optimization has been applied, then one has to step back and make sure that the different parts that make up this larger object are matched correctly. This moves outside the world of pausing a KW or changing a bid. "Off" is the butcher approach. Good logic fueling flexible algorithms is more of an arthroscopic surgery approach. On the other hand - there are times, when cost needs to be reigned in quickly and actions need to be taken outside of what we have already mentioned. Of course, one can always go back to the data and test again. In these situations data is lost....yes, but management/client is happy. Their margin is more important to them then the data is to me (Unfortunately - cause I heart data).
I totally agree, Marc, and I don't mean to give folks license to post the dictionary. As one of our Senior Analysts said: "if my client has two lego products, the keyword "lego" will be a disaster for them. Are you saying I should launch it to find out?" No, of course not. There's no reason to turn off our brains. However, many agencies and in-house folks make the mistake of trying a collection of terms: at the top of the page, in the middle of the page and at the bottom of page one and then call them stinkers, and this is the wrong approach.
Marc Adelman says:
George, The approach you mentioned for agencies testing a KW is beyond wrong - it is caveman. I would love to actually speak to someone who implements this and see what else is under the hood of their expertise. I'm sure that conversation would fuel a few more intriguing postings:)
Chris Crompton says:
You could say there are no "bad" anything -- just things that perform poorly. But when people call something bad, they mean that it performs poorly, not that it doesn't perform at all. A bad student doesn't get a 0%, just a 60%. You still call him bad. If a keyword doesn't do a good job of reaching your target audience, it typically performs poorly. There are extreme cases of this, and subtle cases of this. I guess maybe it would be helpful to say "there are no bad keywords, just keywords that are bad for your product and/or your landing page at a price where you can get a decent amount of the keywords' traffic."
Thanks for your comment, Chris. The problem is if we're gauging performance by the cost/sales ratio generated we have to remember that we're controlling one piece of that equation: the cost associated with the traffic. If the traffic is worth less than we paid for it, that's our fault, not the fault of the keyword. Too many agencies put the blame on the keywords, rather than on their ability to predict traffic value accurately. As I said, some keywords might generate traffic that is so low in value as to be worthless, but we've taken clients who were told by other agencies that "non-brand keywords don't work for you..." -- they turned off all their competitive search terms! -- That's absurd.
groovefactory pr says:
Of course any comments like this are 'relative', if you are a small company with a limited ad budget - you need to do constant tweaking and pruning of your keywords. If after tweaking ads over and over and doing A/B/C/D testing - I am spending .78 cents a click for a term that is not delivering conversions - no matter how much traffic and search volume it is delivering, I am dropping yes in that case it is a bad keyword FOR ME. Same with terms that are so competitive that I could only afford to be on page 5 or 6. I mean really, what is the point of being that low? No one is going 6 pages deep to buy all I am getting is click fraud and tire kickers. So in the end, you could say that it isnt the keywords fault - but my own for not targeting more specific and fruitful keywords....but if they are not delivering for me, or if my ROI is upside down then yes, they are BAD FOR ME - and that is all that matters.
Thanks for your comment Groovefactory! My point is that by and large there isn't any such thing as "bad traffic". A marketing program that generated 100,000 visitors but no orders is okay as long as the cost per visitor was 0. If you get poorly converting traffic from a keyword that isn't a problem as long as you didn't pay too much for it. The key to efficient advertising is to bid only what you can afford to pay for the traffic on each ad. As you point out, that may leave you getting no traffic at all on certain terms, but at that point, those ads aren't doing any harm either. But, as I acknowledged earlier, from a practical standpoint, that doesn't mean you should launch ads on KW recklessly. If you go bankrupt or get fired before your bidding system rights the ship, you haven't done yourself any favors. Pick good, relevant, targeted keywords and instead of turning them on or off, bid them to their value and let the traffic come in cost effectively from whatever KW the market determines.


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