Image by Robert Yang

Let’s look at segmentation topics in light of search engine marketing. I’ve set up here a Q&A format simulation to look at some common scenarios regarding account builds, keyword management and segmentation for people looking to dive into SEM.

Q: If you were going to create an advertising account on Google for an eCommerce retailer, how would you structure the account to maximize performance?

Campaigns would be organized as granular by product line and themes as possible. Keyword to ad copy relationships need to be extremely tight insofar as to requiring a small set of keywords per ad group, with appropriate match types.

For example, “Justin Bieber Posters” would be in a different ad group than “Buy Justin Bieber Posters” to match elements of the ad creative with the appropriate queries. One could imagine that a searcher using a call to action (CTA) qualifier “buy” is deeper in the sales funnel than someone browsing for images. If you're really fancy though, you can create scripts to build reporting structure that differentiate CTA qualifiers from base terms.

Similarly, genres of products like movie posters vs. music posters would be in different ad groups with appropriate, relevant creative. We should always strive for relevancy from keyword to creative to landing journery as that informs good practice in a user-centric experience.

Negative terms incorporated into keyword sets should similarly be as focused as possible. We don’t want to run an infinite tab of terms to cut prospects off at the pass.

We want to be targeted so that our costs don’t balloon but we can still be flexible enough to route beneficial terms into the correct buckets. We want to balance keyword discovery of impactful terms while balancing traffic inflation from broadly matched keyword queries.

Overall, the keyword account would see a scaled and sequential build of keywords as we phase expansion after desired quality scores are achieved.

Q: How would you manage geotargeting and placements?

Geo targeted campaigns are important if we want to increase focus in certain areas in order to prioritize budgets and essential traffic. Expansion into different markets in regions around the globe calls for a nuanced approach in campaign builds.

A quick side note on localization for regional campaigns:

Though you may not know a second language, the keywords and text ads are still important in that meaning and context are properly conveyed. A localization expert in your organization or freelancers will help you create the fundamental scope of how you would advertise.

Leverage partners and freelancers to help you create an index system. The system helps you infer appropriate terms to describe your product and also could help you programmatically build creative units.

Considering that there may only be 1 or 2 individuals to help you on this, targeted and focus projects/deliverables will create the fundamental elements that help you scale faster. Even better, if you had a copywriter focused on localized creatives, it would be beneficial to work with them to create editorial guidelines in which you can repurpose distinct call to action for testing and optimization purposes.

With other placements, Display Networks separate campaigns are created if we used banners vs. text. Further segmentation could focus on devices and testing mobile, desktops, operating systems, and app stores for install campaigns.

Q: What is Quality Score and why is it important?

Quality score is a real-time calculation that measures how relevant the keyword is to the ad copy to the core business. The score represents a rank from a scale of 1 to 10. The higher your score the easier it is to achieve a high rank on SERPs (search engine results pages) with a lower CPC (compared to the bids of competing, neighboring advertisers).

There are several components in calculating quality score. One factor that determines your grades is click-through rate or CTR performance. This is one of the main determinants for Google to assess how relevant a search query is to the ad copy.

Additionally, CTR history influences quality score for the entire account. This could be seen as a trust factor. With a longer timespan to track historical performance of CTRs in an account, Google Ads can use this data to anticipate quality scores and performance for new campaign builds.

How well a campaign is geo segmented also contributes to quality score for keywords in that campaign. And finally, the root domain of the advertiser contains page information that additionally gives input to QS mostly on the technical side regarding page load and speed, unnecessary popups or redirects.

What are some of the major levers that an SEM program manager can use to impact performance in their Google AdWords accounts? One obvious example is that If you raise bids, your position could improve.

Keyword expansion – By updating your keyword libraries through search query reports and additional reports through organic search activities you can cast a wider net of terms that would help prospect new keywords. This lever helps ensure continual traffic and sales activity from long tail terms with benefits seen in lower cost per click and possibly, higher conversion rates.

Ad copy development – By continually trafficking and rotating ad copy to test and improve our CTR we would be able to increase quality scores for search terms, help lower our cost per click and require less spend to achieve a premium rank.

Negative Keywords – By updating our negative terms per ad group we would be able to run a more efficient program that focuses only on terms intended for searchers and exclude irrelevant terms that would not drive the bottom line for us. Results can be seen in higher conversion rates and lower cost per acquisition for a campaign.

Q: My company wants to increase profitability and ROI of its SEM program. Which metrics would you look at to develop your strategy to improve performance? What parameters (such as date range, cost thresholds, etc.) would you set to show you the most useful data?

For a strategy to capitalize on seasonal trends your analysts should map out trending by months, seasons and holidays to determine how we should spend per period, the spend amount per period is based on an index that looks at conversion rates for a specific date range.

I would pinpoint holidays in this report to anticipate ad copy development, promotional activities and bid increases. From there keyword gaps are reviewed to identify missing terms specific to that period (i.e. “College dorm posters” for the beginning of the school year, or “art prints for mom” for Mother’s Day).

To arrive at a bidding strategy for that particular period one would then look at overall keyword performance to gather cost and transaction data. Using these two pieces of information I would apply an allowable bid per keyword for my bidding strategy.

By multiplying conversion rate and cost per transaction you could arrive at a marginal cost per click. From the resulting marginal CPC, I would layer on additional costs such as marginal costs or commissions to arrive at an allowable CPC for a given search term.

Q: If my company’s goals changed and were more focused on top line revenue than immediate ROI, how would you change your strategy?

I would change the bid model reflected in this way: targetCPC = (keyword conversion rate x allowable cost per transaction).

There would definitely be flexibility for both scenarios on this formula when I take into consideration traffic volume, significance of data and time range for a particular keyword activity.

Q: My company has 20 million keywords across a range of product categories, and a variety of catalog items, each in all three match types, how would you structure the performance data to identify action items to increase traffic and revenue? What key pieces of information would you need to make this segmentation as valuable as possible?

I would prioritize keyword data by sales activity, themes and clusters to identify critical keyword segments that are important for driving your organization’s revenue. From a summarized matrix of keyword groupings, I would compare the cost per acquisition and revenue per keyword.

From there I would calculate a cost to revenue ratio to see how much further we can raise our bids. The lower the ratio the higher our bids. Higher ratios mean decreasing the bids for the keyword groups as well as investigating ad copy performance and observing landing page conversion data.

As far as increasing traffic, I would look at impression data by volume and identify areas where we had high impressions but low CTR to find opportunities to improve ad copy sets for a particular group of terms. I would include a column for Quality Scores to give an overall sense of health in the keyword configuration and decide on next steps if a keyword had low quality and low CTR but high impressions.

Some additional useful information I would use in order to analyze gaps in keyword sets would be: frequency of specific product purchased, keyword traffic from natural search and search queries for additional keyword ideas backed by performance metrics.

For particular purchase metrics I would look at the backend data for regional sources of purchases for a particular product, revenue numbers per region to arrive at an index to budget per location and even looking at the technical side of the site to see if load time was an issue and affecting conversion or exit rates.

Seasonal information will also be reviewed to forecast when we would expect high traffic as well as low. Also, with campaigns in a foreign language we might review localization issues with the pages themselves if we are not seeing good traction with conversions.