Efficient Frontier Insights

Search Campaign Restructuring Tips

The following post shows the benefits of search campaign restructuring and offers tips on how to restructure your campaigns. It was written by Vividh Chaudhary, a Business Analyst at Efficient Frontier.

Organize, Organize, Organize

Account organization is one of the most overlooked aspects of search engine marketing. We have all heard that search engines reward intelligent campaign organization, but the benefits go beyond that. When I get a new client account to manage, the first thing I examine is how the campaign is organized.

Why Organize Campaigns

1. Organizing your accounts boosts performance

Improve Quality Score. Search engines reward organized accounts by improving their quality score and discounting CPC. Why is that? We all know how much search engines value user experience. When users conduct a search, they are more likely to click on relevant ads. If an ad group contains similarly themed keywords, the ad copy can represent those keywords more accurately and is more likely to get clicks.

More clicks mean more money for the search engines and thus they can afford to discount the CPC. It is a win-win situation for everyone. Searchers have a better experience, search engines make more money and the advertiser gets more targeted traffic at cheaper rate.

Improve Content Targeting. Campaign organization is also highly beneficial for content targeting. The bidding for content placement happens at the ad group level and not the keyword level. If keywords belonging to multiple categories are grouped together in one ad group, search engine algorithm can get confused and the ads would get placed at irrelevant web pages. Consider restructuring your poorly performing content campaigns before turning them off.

2. Organization brings efficiency to campaign management

Spend Management. If you want to promote a certain product, you can easily allocate more funds to that product campaign if your campaigns are organized by product type. Similarly, if the product goes out of stock, you can easily pause the entire campaign without having to pause individual keywords.

Tracking and Analysis. If the account performance goes up or down you can quickly and easily identify the source of performance shift if the campaigns are well organized.

How to Organize Campaigns

Create campaigns and ad groups such that they represent a theme and group Keywords by product type, searcher profile (age, gender etc.) or any other factor important for your business. Each ad group should be a collection of close variations of keywords and the ad copy should represent those keywords.

Campaign Organization Example

Consider this example of a poorly structured retail SEM account. The account has just one campaign for all the product categories namely video games, books, television, digital cameras and others. Within that campaign each product category has just one ad group and thus, every game from Xbox 360 to Nintendo Wii has to be advertised with just one generic ad copy.

There is an instant restructuring opportunity here. I would recommend creating separate campaigns by product categories, which would enable separating video games, books and other product types into their own campaigns. By doing so, products like Xbox 360 and Nintendo Wii would have their own ad groups and much more accurate and targeted ad copy describing the product.

Such an exercise can bring an immediate lift to the campaign performance and in similar cases we have seen 5-10% ROI lift within one month for no change in ad spend.

However, it is important to note that when you move keywords or ad groups across campaigns or add new keywords, ad groups or campaigns to an existing account, the account can experience a short term loss in history and the quality score. But as a search marketer you shouldn’t be afraid of this short term penalization as the long term gains like quality score improvement, better content performance and a more efficient campaign management far outdo the short term losses.

As a Business Analyst at Efficient Frontier, Vividh manages client advertising campaign strategies and performs data analysis to manage and grow client accounts. He holds a MS degree in Management Science from Stanford and a B. Tech from India Institute of Technology.

Motley Fool UK Case Study at SMX London

Last Friday Jonathan Beeston, our UK Director of Client Services, presented a financial services case study at SMX London. Fool.co.uk started optimizing (or optimising, as they write in the UK) their search campaigns using Efficient Frontier's bid management technology in April 2007, and within two weeks experienced a significant increase in volume and decrease in CPA. After just one month volume had increased by 83% and CPA had dropped by 43%.

We didn't stop with just bid optimization for Fool.co.uk - we also helped expand their keyword list into the long tail, restructured the campaign, and expanded the campaign from just credit cards to loans, mortgages, insurance, and banking. We also refined ad copy, conducted keyword testing, landing page optimization, and match type expansion, and made use of our simulations and forecasting. 

Fool.co.uk is one of the leading finance sites in the UK, with over 2 million members and 600,000 monthly visitors. Their search marketing efforts are helping to increase value for partners and grow the site even more. The past six months of algorithmic campaign optimization combined with smart search marketing practices have resulted in an overall drop in CPA 86% and an increase in click-out value of 320%.

This example is what makes search engine marketing so interesting - it's not very hard for an advertisers to cost-effectively acquire new customers through search, but the additional investment in optimization can produce results that far exceed expectations.

Best SEM Industry Blogroll

Keeping up with news about search engine marketing can be time consuming. I've found that Search Engine Land consistently covers the most relevant and interesting news, so if you're going to read one industry blog, read that one. If you don't want to add quite so many posts to your inbox or feed reader, subscribe to the Search Cap for a daily digest of the day's SEM news.

Search Engine Land's recently updated blogroll is a complete list of industry blogs organized by blog type and can be seen on the sidebar of the homepage. Blogs are truly the best way to keep up with what's happening in this rapidly changing industry, so check this list out if you want keep up with the latest news and events.

Algorithms White Paper

Today we launched our new website, which introduces the new Efficient Frontier logo and corporate identity. As part of the launch, I wrote a white paper about the algorithms behind our technology. The paper can be downloaded here.

Efficient Frontier's algorithmic approach involves click modeling and revenue modeling for every keyword in a portfolio, and then chooses the optimal bidding strategy based upon those models. Without such models, it would be impossible to know what level of performance your campaign could achieve just by changing your bids.

Researching the white paper was a fascinating process - I looked into the history of mathematics, computer science, and economics in order to explain the application of modern portfolio theory to search engine marketing. Our founder, Anil Kamath, had a unique vision that pioneered much of today's thinking behind search marketing optimization. If the white paper whets your appetite for more, read this interview with Anil by Eric Enge.

Share of Efficient Frontier Search Spend Continues Shift to Google

In the past year, more than $400 million in search engine advertising spending was managed by Efficient Frontier. The terabytes of data we have collected in the process can offer meaningful insights into trends in the search marketplace, and I am excited to have the opportunity to share them with you on this blog.

At any given time, Efficient Frontier's clients have over 45 million ads appearing on the search engines and their content networks.  In every case Efficient Frontier is managing the advertiser's spend to well-defined performance metrics, so where we spend our clients’ ad dollars is a very good indication of the intrinsic value of the different components of the search engines' networks. The chart below shows just how strong the shift has been toward Google over the past 3 years.

 

The GOOG stock frenzy and recently announced Q3 growth of 57% from a year ago is reflected in actual spending levels: In October 2007, Efficient Frontier’s US clients spent 74% more on Google than in October 2006. The earnings announcement also states that 34% of Google’s revenue came from its partner network.  Only 4% of Efficient Frontier’s US Google spend occurred on AdSense in October 2007, indicating that AdSense’s popularity does not extend as deeply to the ROI conscious advertisers among Efficient Frontier’s client base as it does with Google’s entire customer base.  Stay tuned to this blog for more data on trends in content versus search.