I’m going to be talking about this at the SES show in London next week but I thought it was worthwhile putting it out here too. We found a very simple (and in hindsight, obvious) tactic to improve the ROI of automatically generated paid search campaigns. By way of background our Ad Champion service (which is still in beta) automatically creates Google campaigns from site search activity. It’s a very cool product because it creates large campaigns and allows you to take advantage of the search tail everyone is talking about. Most of the terms in the tail don’t get searched for very often and it’s not worth manually managing ads for those terms. Having an automated system of selecting and managing those terms allows you to take advantage of them. They typically have higher conversion rates and cost less because there is less competition.

One of the problems we found with this system is that some of the phrases that are used in the site search get searched for a lot on Google. They’re not in the tail so they can cost a lot and have a lower conversion rate. This graph shows how much we spent on each keyword over a period of time, ordered from highest to lowest.

We found by removing just 50 keywords we could reduce the cost of the campaign by 60% but only reduce the sales by 2%. At first it seemed counter intuitive – to remove the keywords that were giving us most of the traffic. But this change was enough to change a campaign from a negative to a positive ROI.

This entry was posted by Shaun Ryan on Thursday, May 25th, 2006 at 9:13 am PST and is filed under Uncategorized. You can follow any responses to this entry through the RSS feed. You can leave a response, or trackback from your own site.