My regular paid search column at SearchEngineLand in case you missed it:

A quick poll:

How many marketers think sending the same email to the whole file will perform better than individually tailored emails based on each recipient’s past behavior?

How many think sending non-personalized direct mail pieces will outperform personalized outreaches?

Anybody? Anybody? … Bueller?

If no one thinks the monolithic approach would ever beat the segmentation approach, why is it that some PPC professionals advocate ditching the long tail KWs and letting broad match catch the tail?

The benefits of the long tail are exactly like the benefits of segmentation above.

1. The more targeted ad is served having better ad copy which raises CTR and therefore Quality Score. This leads to more traffic from the same number of user searches.
2. The more targeted user search necessitates a more targeted landing page. Not the “Fender Guitar” page, the “Fender 4 String Bass” page. That more targeted page will generate a higher conversion rate, hence more sales from the traffic generated.
3. Folks looking for “Fender 4 String Bass” will have a much higher conversion rate than those searching for “Fender guitars”. That fact coupled with #2 above means higher bids on the more targeted ads, putting the ads for the most targeted traffic higher on the page than the more general terms could be yielding more impressions and higher CTR.
4. With more of the highly targeted traffic going to the tail KWs the less targeted, more general KW will be bid down to more accurately reflect the value of the traffic. As I mentioned in my post on syndication partners, better resource allocation leads to a bigger program at the same efficiency.

The advantages of a thoroughly developed KW list are obvious in principal, but what about in practice?

The answer is an emphatic “YES!”

In a recent empirical study, we took apart campaigns from a number of our clients ranging in size, product types, price points and more, to see the degree to which the “Long Tail” matters. We found that the importance of those targeted searches varied tremendously from a low of 8% of the total business to a high of an amazing 83% of the total. The median of the study group was 31%.

Obviously if the program is tiny, and the tail is only 30% of the game, it might not be worth the attention, but for large programs even 8% is worth chasing. In the case above that 8% represented over $200K in sales per month.

Nevertheless, some argue that those targeted searches would be captured by broad match anyway, so there’s no real advantage gained by building out and maintaining a comprehensive KW list.

Not so.

As a test case, we took a client in the consumer electronics space who carries products from more than 1,000 different vendors. We then asked the question: what’s the traffic value differential between the highest traffic KW for each vendor brand, and the rest of the KW in that brand? In other words, if we just ran the highest traffic term for each brand on broad match to what degree would we be blending together traffic of vastly different quality?

The answer came back: “We’d be mixing apples and oranges”. In the test case and for vendor brands with enough traffic to have a tolerable signal to noise ratio the median variance in traffic quality (margin $ per click) between the brand-specific “head” and the brand-specific “tail” was 84%! And not always in the direction expected.

Throwing all the granular data into the head KW performance will very often result in significant overspending on one cohort of user searches and significant opportunity lost by underspending on the other cohort(s) of traffic.

So, there isn’t much question that for a substantial program the tail matters, and treating the head KW the same as its tail leads to significant mishandling of the bids.

The other rationale for ignoring the tail relates to the cost of building and maintaining it. “The time is better spent elsewhere.” Well, that could be true if either of the following is true: 1) it’s a small program with an insignificant tail, not worth the management cost to go after; or 2) you lack the power tools and algorithms necessary to build and manage the tail comprehensively with cost-effective human effort.

There is no solution for the first issue. If the whole program isn’t worth spending much time on, then certainly the tail isn’t worth it.

The second issue however is simply a resource and know-how constraint, which for a professional paid search manager should not be there. Telling folks “we don’t have the tools to manage your program effectively” is a hard message to deliver, but it’s the right message if it’s true. Telling clients: “The tail is unimportant,” or “The tail is effectively handled by broad match” simply isn’t honest for most sizable programs.

Technorati Tags: long-tail, paid search keywords, PPC Bid management