Search: Choosing Your Words (and Price) Carefully Part 2

Donovan Cronkhite
President, RJM

Posted On August 14, 2005

Search Engine Marketing is supposed to be easy. The entire theory around the process is that the customer is already searching for your website and they only need a sign pointing them in the right direction. While the theory still holds true, the truth is that like any other marketing opportunity, it takes thought and strategy to make the effort worthwhile.

Invest in Knowing Your Business

In a recent Forbes Small Business article, WarrantyDirect.com, an Internet company that sells extended automotive warranties, was quoted as spending $30,000 to $35,000 per month on search engine marketing. This has definitely paid off for them - sales increased 55% and earnings another 82%. Getting there, however, required a knowledge of their business and customer that allowed them to build an efficient strategy to market online.

Based upon customer and business knowledge, WarrantyDirect.com adjusts their word and price settings for online ads up to eight times a day. The company has found that serious buyers are more likely to visit on certain days of the week, or even certain hours of the day. They've found that the number one ad position is not always the most desired, that numbers two or three do equal amounts of sales at a much lower cost. They've also found that picking the right words for your ad is key.

"The keywords that you choose for a search engine ad are as important, if not more, than the copy you place in any other marketing media," says Bob Michaels, President of RJ Michaels, Inc. "People are searching for your business based on a single word or, at best, short phrases. Choosing the right keywords can be the difference between a campaign that generates no inquiries, but costs a fortune, and a campaign that brings in a high number of qualified buyers for little money."

First Hand Knowledge

When RJ Michaels, Inc. set up our first Google AdWords campaign, the importance of choosing the right words became readily apparent. "We knew that many companies purchasing Google AdWords were selecting keywords that were too general. This was creating a large bill for them without any returns," remarks Michaels. "So we started with the opposite theory – go specific in our choices. That didn't work either. Google rejected our first attempts because they were so specific they wouldn't create enough impressions."

Google's built in tools allow businesses to select their keywords and get an estimate on the amount of impressions that the ad will receive, the approximate click-through rate and associated cost. They allow businesses to try out several variations on keywords and phrases to find the sweet spot that everyone is after, the most impressions for the least amount of cost.

Businesses can spend a lot of time at this phase of the buy trying to find the right words. Purchase keywords that are too general and the visitor who clicks through to your website is more likely to not find what they are looking for and leave without purchasing or inquiring on services. Swing too far in the opposite direction and the amount of people searching for an ultra-specific keyword decrease to a point where nobody sees the ad.

"We ended up purchasing the words 'web site design' and 'website development', as well as the exact phrase 'website design'. These seem very general, but they created a good deal of traffic with an effective pricing scheme," explains Michaels.

The Results of a Local Buy

RJ Michaels, Inc. purchased these three phrases on Google with a location radius limit of 100 miles. Over the course of about a month, the ad was seen over 49,000 times and had a click-through rate of around 0.1%. By the end of the month, the total cost of the campaign was less than $100.

"I'm positive that we could have seen both a higher cost and higher click-through rate on this campaign," says Bob Michaels. "But, for this demonstration project, we started with a very low dollar amount we were willing to pay for each click-through and had to adjust this up at the beginning because we were unsure what it would take to rise into the top ten positions. These became baby steps in a long journey."

Different keywords also gained a surprisingly different result. The content of the ad gained the most impressions, around 48,000, but the lowest click-through rate. "Web Site Design" gained a respectable 1.4% click-through rate, but the exact phrase "Website Design" garnered more impressions and only a slightly lower 0.9% click-through rate. This illustrates the options and decisions that must be made not only between keywords and exact phrases, but the possibility of regional or unknown spellings (is website one word or two?). The most surprising result of the experiment was that "Website Development" gained a very high click-through rate of 2.7%.

"There is no doubt that this campaign needs some tweaking. But overall, I think it was a success," Michaels commented. "It will be interesting to see how the one remaining factor influences our test campaign."

The One Remaining Factor