Q: Have you ever wondered: “I spend a lot of effort on long tail keywords, but why don’t I see more long tail conversions?”
The long tail keywords primarily assist your branded conversions.
Long tail keywords are the cheapest and most cost efficient way advertise — cheapest due to reduced competition and most cost efficient if used in conjunction with landing pages tailored for the specificity of the keywords.
A mature, properly managed ppc account has many negative and long tail keywords. The “head” and “shoulder” terms typically comprise 20% of the overall number of keywords and the long tail the remaining 80%. However, from a clicks and conversions standpoint, those numbers are often flipped, with the long tail keywords generating a much smaller number of conversions proportionately than you may expect.
To understand this situation, you must first understand how paid search relates to the customer purchase cycle.
PPC Advertising Customer Purchase Cycle
One of the great aspects of paid search advertising is it’s ability to influence the three stages of the customer purchase cycle, from Awareness to Purchase, via the use of display ads, search network, branded, and non-branded keywords.
Non-branded keywords, especially those terms that are generic or only tangentially related to the product or service offered, tend to be the first interaction in the chain of interactions that lead to a purchase. Example: “fun things to do”
Conversely, branded keywords tend to be the last interaction just prior to purchase, after the potential customer has researched the product, compared alternatives, and has become comfortable with the brand. Example: “samsung”
If every customer could be perfectly tracked from first interaction to last, you would see that long tail keywords provide “assisted conversions” while branded keywords tend to get the majority of the final interaction “conversions.” This situation would allow us to exactly quantify the affect the long tail keywords have on revenue and leads. Unfortunately, it is difficult to properly track the customer from first click to last given today’s multi-device, multi-location world.
It’s a multi-device, multi-location world out there…
Google recently published a study titled “The New Multi-screen World: Understanding Cross-Platform Consumer Behavior.” This study highlights that 90% of consumers use multiple devices (screens) to perform tasks, both simultaneously and sequentially.
The practical application of these findings as related to paid search are:
Work + Home — Consumers may start the search for a product on one device at work (i.e. long tail, generic keyword like “smartphone for business people”), then finish at home using a different device (using a branded term like “samsung smartphone”). In this scenario, the generic keyword “smartphone for business people” will show a click, but no conversion, while the branded keyword “samsung smartphone” will show both a click and conversion. Note: the generic long tail keyword “smartphone for business people” won’t even show an assisted conversion since multiple devices were used.
Paid + Organic, Multi-device — Consumers may begin their search via a paid search click for “board games” on a mobile phone, but may finish later on their tablet via a organic search click via the keyword “monopoly”. In this scenario, the paid search keyword “board games” gets a click, but no conversion while the organic term “monopoly” will show both a click and a conversion. Note: Again, there is no assisted conversion for the paid search term since multiple devices were used.
Google’s Adwords Team is working on it
If users are logged into their Google account at work and at home, Google *should* be able to consolidate data points acquired across multiple devices and networks into a single transaction stream.
Even if Google is able to pull off this data consolidation, there is no guarantee that your customers will be logged into their Google account on their work computer, home computer, cell, and tablet at all times.
Where are all the long tail conversions?
The long tail keywords primarily assist your branded conversions.
If prospective customers don’t find your website in the early part of their purchase decision process, your product/service will not be in their final consideration set. Put another way, if not for the long tail keywords, the branded keywords may not have captured the conversion at all.
While you may or may not have blindly believed other panic inducing terms, such as “Y2K” and “12/21/12”, it is wise to test whether your branded keywords are profitable before you turn them off.
The goal of this test is to determine the quantity and value of lost branded keyword clicks, conversions, and revenue when branded paid search ads are not presented to prospective customers.
Paid Search Branded Keyword A/B Test steps
1. Determine equivalent test populations
The first step is to segment your branded paid search audience into two reasonably equivalent populations in terms of absolute number of conversions over time. There are several ways to accomplish this segmentation:
Geolocation — Within a specific country, are there two equivalent sets of states, metro areas, or cities that produce equivalent conversions?
NOTE: When dealing with accounts that are limited to a single metro area, you may be tempted to split between “city name” and “zip codes within that city.” This method tends to skew the data since Google location specificity is inconsistent and probably tied to how the user connects to the internet (i.e. via a static IP at work, a dynamic IP at home, a mobile network, etc.) It is still possible to segment this way, it just takes more test phases to eliminate location/connection type bias.
Dayparting — Are there two equivalent sets of hours that produce equivalent conversions?
2. Create two new Adwords Campaigns
Next, create two new Adwords campaigns which will cater to each of your equivalent test populations and name them “Brand Test A” and “Brand Test B”. This step is critical to ensure that existing campaign historical data does not artificially skew the results.
Each campaign should be identical in terms of ad groups, keywords, ads, ad scheduling, etc. — the only difference is the population served.
When setting these test populations, make sure that you also add the negatives to each campaign as well. For example, if “Brand Test A” advertises to cities 1, 2, and 3, you will need to add negative locations of cities 4, 5, and 6 to this campaign as well to prevent possible cross-contamination of the data.
3. Establish “Baseline” metrics for the branded keyword test
Upon completion of setup, pause your original branded keyword campaign and run both new campaigns until you have at least 100 conversions for each campaign. This step ensures that the new campaigns are “up to speed” in terms of ad approval and impression share.
4. Run Phase 1 of the branded keyword test
Pause all keywords for “Brand Test A” (not the campaign itself). Run this phase of the test until you have at least 100 conversions for “Brand Test B”.
5. Run Phase 2 of the branded keyword test
Now enable all keywords for “Brand Test A” and pause all keywords for “Brand Test B” (not the campaign itself). Run this phase of the test until you have at least 100 conversions for “Brand Test A”.
6. Analyze the branded keyword test results
The Key Performance Indicators (KPI) for this branded keyword test are:
Overall Website Revenue
Natural Search Revenue
Paid Search Revenue
Since we created two new Adwords campaigns for our test, it is easy to view the results in Google Analytics by creating the following custom segments:
Now, using the “Ecommerce Overview” report in Google Analytics:
Plot the two test campaign segments, “Brand Test A” and “Brand Test B” for the entire testing period
Plot the “Brand Test A & B”, “Google Organic”, “Google Paid Search”, and “All Visits” for the entire testing period
Every business situation is different, and the analysis of the test results will vary from industry to industry and company to company. The most important question to answer is:
Is it profitable to advertise on branded keywords?
To answer this most important question, the following questions must be answered first:
How much revenue was lost during test phases 2 and 3 compared to the baseline phase for Paid Search, Natural Search, and Overall Website visitors?
How many advertising dollars did you save by not advertising on branded keywords in test phases 2 and 3?
Given your business’ profit margin ( NI / Gross Revenue ), what profit would your business have made from that lost revenue ( lost profit = lost revenue * profit margin )?
If your company’s advertising dollars saved is greater than the lost profit, does the lifetime customer value of the lost customers outweigh the difference?
What are the results of your branded keywords test?
If you found this article helpful, please comment below with your results (keeping your company name confidential of course).
Helpful information to include would be industry, pretest branded keyword spend per month, revenue lost during test, and ultimately, whether your company decided to continue advertising on branded keywords or not.
eBay recently commissioned a study that declared an end to branded keyword advertising.
The study shows that when turning Google Branded keywords off, eBay’s total click volume from Google only dropped by 3%.
At first glance, the conclusion that paid search spend is a waste of advertising dollars.
The problem with percentages is that they can be misleading when viewed out of context — given that eBay’s paid search volume as a percentage of their total search volume (organic + paid) is 6.2%, the 3% drop in overall search volume means that nearly 50% of eBay’s branded paid search traffic was lost!
Where did the other 50% of eBay’s Paid Search potential visitors go?
Since eBay owns the entire first page of natural search results for most search terms including the “eBay” term (i.e. ebay motors, eBay apparel, etc.), it is logical to assume that any prospects that didn’t click on a competitor’s paid search ad did one of the following:
Clicked on an eBay natural search listing — 50% of the brand keyword prospects clicked on a natural search listing rather than the now missing paid search ad.
Paid search competitors — Paid Search is a great mechanism for peeling away competitor’s prospects via special offers. In the absence of an eBay ad and presented with a “sale” ad from a competitor, some prospects may have decided to click on the competitor’s ad instead of eBay’s natural search results.
Abandoned the search or modified the search to a search term excluding the word “eBay.” — Only Google has this data for sure, but this action seems counter-intuitive.
Nothing. In the absence of a paid search ad, there’s nothing to click. Given the proliferation of “paid search spy” software out there, it is safe to assume that some of those clicks are by “bots” which are simply recording paid search data (i.e. landing page URL, landing page keyword density, etc.)
Did eBay make the right call by turning off branded keywords?
Consider that eBay has:
Relatively low profit margins –> Net Income / Net Revenue = 18.5%
Low branded Return on Ad Spend ( ROAS ) –> ( Revenue from branded / branded spend ) -1 = 18%
Negative ROI for branded paid search –> ( branded Net Income – branded spend ) / branded spend = -78%
It doesn’t make sense for eBay to advertise on their branded terms.
In fact, by not advertising on branded terms, eBay nets +$12M in annual profit while freeing up $18M in cash flow.
Should your company turn off branded paid search keywords?
Whoever coined the term “Google Tax” certainly did the company a disservice — advertising on branded keywords (or any other keyword) is either profitable or not depending on your company’s product/service, profit margins, paid search account management effectiveness and natural search (SEO) proficiency.
It may make sense for your company to turn off branded keywords if most of the following are true:
Your company owns the first page of natural search results completely or you have at least the top three or four natural search listings.
Your company’s brand keywords are not plagued by competitors’ ads with offers to entice your prospects away.
Your company has relatively low profit margins (i.e. resellers, affiliates, marketplaces, commodity product manufacturers)
Your top-most natural search result (usually your home page) conversion rate is equal to or exceeds the conversion rate of your branded paid search landing page.
Your branded paid search ad simply dumps the visitor to your company home page and does not utilize any additional paid search site links.