9 June 2011

PPC Search Marketing: The Basics of Keyword Strategy

Lesson #56: PPC SEARCH MARKETING, Part VI - Keyword Strategy

What You Will Learn
In this lesson 56 and the next we will marshal what we have covered regarding PPC Search Engine Marketing to date and take it to the next level. In this lesson we will lay the groundwork and in our next lesson we will present you with a table and some mathematical formulas to hone your Search Marketing skills to a fine science. In this lesson we will provide the background necessary to fully master the tools we will present in the next lesson.

In our last lesson we discussed Keyword Value. We mentioned that the value of a keyword is related to “position”. When a search is made on a search engine with a particular keyword, more than one ad usually appears in the results. In many cases, there are seven or more ads that appear on the first page of the results. Whether your ad shows up on the top of the list, at the bottom, or somewhere in between is what we mean by “position”. In this lesson and the next, we will discuss the importance of determining the correct position for a keyword ad...and we will provide you some very precise tools to do so. Knowing how to determine the best position for a keyword ad allows you to accurately test and evaluate your keyword list. From there we will discuss the decision of which keywords you should bid.

To recap what we covered in the last lesson; as a rule of thumb, you must avoid keywords that are so valuable to others that the bidding has made them unprofitable for you; while seeking those keywords that have greater value to you than to your competitors. You should especially seek those keywords that have value to you, but have been overlooked or simply have no value (for whatever reason) to the other bidders. This approach makes it possible for even the small scale home-based entrepreneur to compete effectively in Search Engine Marketing. In this and the next lesson, we provide the measurement tools to help you accomplish these objectives..

Market Stability or Market Flux Over Time
You need to be aware that, while keyword values do naturally vary over time in response to large market conditions, there are times that they are more in flux than normal due to temporary circumstances. When a new competitor enters the bidding for a specific keyword, it draws a reaction from the existing bidders. Sometimes bidders will bid artificially high just to test a new bidder. Sometimes, like bluffing in poker, bids are driven unprofitably high temporarily when certain bidders try to intimidate the field to gain a psychological advantage. These battles settle down quickly, however, as no one can really afford to bid more than value for any length of time. The point to remember is that you may need to look at values for a particular keyword over time to make sure that you have an accurate picture.

Necessity of Tracking
We mentioned in Lesson 49, but need to repeat here, the importance of tracking abilities on your landing page and underlying Website in competitive search marketing. When you think about it, the ability to identify the value of a keyword does not exist without tracking. With tracking, each arrival to your landing page is identified with a specific ad, with the specific search engine, and with the specific keyword that the visitor used in their search on the search engine. With tracking, the visitor can then be followed through your site right up to the payoff link. With proper tracking, the visitor can then be followed into the SFI system by SFI keycode and then followed right through any purchase they make. Without this type of tracking, you can not judge the value of the keywords you are using. Without this type of tracking, you can not know which keywords are producing and which are just expensive dead weight.

The VeryVIP Pro, Rocketstart, and International packages have precisely this type of tracking built into them, ready for you to use immediately. SFI affiliates without a VeryVIP Website may be lacking the tracking tools necessary to develop an effective Keyword Strategy. While the search engines provide “conversion tracking”, it cannot be used with SFI V-Store purchases or any of the other SFI conversions because you do not have access to the SFI conversion page to add the necessary code. All of the conversions from all of the affiliates are completed on pages in the SFI system to which only SFI has access. If your chosen conversion was simply a newsletter or autoresponder signup, which is finalized on your own site, you could use the search engines’ conversion tracking by installing the code on your conversion page. For anything finalized by SFI, however, you can not use it. It might be possible to purchase and install some tracking software that you could adapt to use the SFI Keycode system, but that would be a complicated process. VeryVIP has taken care of these issues for you already so that SFI affiliates using VeryVIP Websites have a way to effectively compete with PPC Search Engine Marketing.

Steps In Developing Your Keyword Strategy
With proper tracking, you are ready to refine your keyword strategy. The process involves these steps: 1) generating and expanding your keyword list, and 2) testing your keywords. Testing each keyword has two sub steps: 1) determine the best position for the keyword, and 2) determine whether to bid the keyword or discard it.

We will look at each of these steps in turn, but first let’s clarify some terminology.

Keywords—Reference to “Keywords” in this series of lessons includes both keywords and “key phrases”. That is, by “keywords”, we mean single words or multiple word phrases. On this point, you should be aware that most consumer searches involve only one or two word phrases. Around 40% of consumer searches use only one word, around 50% use two words, and only the remaining 10% use more than two words in their searches. It very rarely occurs that a consumer uses four or more words in their search. Thus, unless you have a very unusual subject matter, the goal is to create a list of one word keywords, a slightly bigger list of two word phrases, and a very small list of three word phrases, all taken together as your keyword list.

Position—We discussed “position” above. By position, we mean where your ad shows up relative to the other ads for the same keyword in the search results. Keywords have different values in different positions. Thus, to truly evaluate a keyword, you must first combine it with a position. For example, the keyword “sitebuilder” in position 1 (appearing at the top of the paid ads in the search results) is different from the same keyword “sitebuilder” in the 6th position. We will be discussing keyword/position combinations and how to evaluate them in this and the next lesson.

Cost Per Click (CPC)—We will be using the term “Cost Per Click (CPC)” in our table and our formulas. As previously discussed, it refers to the amount you are charged when your ad is clicked on in search engine results. Different keywords and different positions will result in different costs per click.

Impressions—“Impressions” refers to the number of times your ad appears in search engine results, whether it is clicked on or not. If you have made a very low bid that puts you in a very low position, your ad may rarely actually appear or may appear so far back in the results that it is not actually seen by anyone.

Click Through Rate (CTR)—This refers to how frequently your ad is clicked on when it does appear in the search engine results. This measurement is expressed in a ratio. If, on average, your ad is clicked on once out of every ten times someone sees it, it is given a CTR of 1/10 or .10. If it is, on average, only clicked on once every 100 times it is seen, it is said to have a CTR of 1/100 or .01

Conversion—We have discussed the term “conversion” extensively already. A conversation occurs when someone who has clicked through to your site actually takes the action that you have defined as your conversion – which may be buying your product or joining your program or other similar action.

Conversion Rate (CR)—The conversion rate refers to the ratio of those visitors to your site that take the desired action that you have defined as your conversion with respect to the total number of visitors to your site. If you have defined your conversion as the purchase of a specific product and only 1 out of 200 visitors to your site actually purchase that product, your CR is 1/200 or .005.

Conversion Value (CV)—This is the value that you have determined for your conversion in a particular search marketing campaign. It is what the conversion is worth to you in monetary terms. For example, if you make $150 from the sale of a product and you have defined your conversion as the sale of that product, the CV is $150.

Conversion Cost (CC)—This term refers to the cost to you to obtain a conversion, usually with reference to a particular keyword in a particular position. You can calculate the CC by dividing the cost per click (CPC) by the conversion rate (CR). Said another way, you can calculate the CC by multiplying the cost per click (CPC) by the number of clicks necessary to obtain a conversion.

Other sources may use different terminology and different acronyms to discuss these concepts. Thus, hopefully it has helped to set out the above list for your reference while studying these lessons. With our terminology and acronyms sorted out, let’s return to the steps in developing your keyword strategy.

Generating and Expanding Keywords
Recall that we first introduced you to the process of keyword generation in Lessons 18 and 19. There it was for the purpose of preparing your site for organic search optimization (i.e. gaining a good position in the traditional “organic” search results). Nonetheless, the procedures we discussed there apply here as well.

Basically the idea, as we discussed in Lessons 18 and 19, is to put yourself in the shoes of Web users who might be looking for what you have to offer. Try to figure out which words and phrases they would use in their search. Read some newspaper and periodical articles on the subject and see what terms are used in the discussions. Do some searches on the search engines and read the pages that result. Look for terms that apply that you may not have thought of on your own.

Then, use the procedures in Lessons 18 and 19 to expand your list (find roots and derivatives, synonyms, etc.). If your site has existing logs that show which search terms were used to get there, review these logs to see if there are terms you have not come up with yet. You can also use your Web logs to determine which terms in your list appear most often.

Once you have prepared and expanded your list of keywords, you are ready to take them one at a time and determine the best position for each keyword.

Testing your keywords
There are two sub steps in testing your keywords. First, you determine the best position for the keyword. Second, you decide whether to bid on the keyword or discard it from your list.

Intuitively, it may seem backwards to chose the best positions for your keywords before you decide whether to use or discard them. The math behind the process, however, is a lot easier if you assign a position to a keyword before you determine whether to use it or discard it. A keyword may work in some positions, but not in others. Once you determine its best position, you are then prepared to evaluate the keyword on the basis of its best performance. This gives you the best picture of how the keyword will work for you.

To determine the best position for a keyword, you use the formula:

P = (CV – CC) x CTR x CR

Where “P” represents the profitability of the keyword/position combination. I will discuss this formula in detail in our next lesson. I preview it here so that you may begin to be thinking about it.

Development of a comprehensive and precise Keyword Strategy is crucial to your success with PPC Search Marketing. It is impossible to evaluate your keywords without a good tracking system in place on your Website. Keyword values and the factors involved will fluctuate over time and with market conditions. You should become familiar with the terms and acronyms involved in Keyword Strategy development.

The steps in developing Keyword Strategy are 1) generating and expanding your keyword list, and 2) testing your keywords. Testing each keyword has two sub steps: 1) determine the best position for the keyword, and 2) determine whether to bid the keyword.

The procedures discussed in Lessons 18 and 19 can be employed to develop and expand your list of keywords.

To understand how to test your keywords, you must understand the importance of positioning. The position in which your ad appears in the search engine results for a particular keyword is crucial to the results you will obtain from your ad. The value of a keyword, both to you and your competitors, is dependent upon the positioning in the search results for the keyword. Your Keyword Strategy, thus, needs to take into account each possible position for each keyword and evaluate your keywords relative to each position. From this evaluation, you can determine the best position for each keyword. Once this is done, the keyword can be evaluated against other keywords in your list based on its best possible performance. With this knowledge, you can determine which keywords to bid and which to discard.

What's Coming Next
In our next lesson, we will continue our discussion of Keyword Strategy and will provide you with a table and mathematical formulas to use to determine the best position for each keyword in your list and then, in the lesson after that, compare and evaluate all your keywords based on their best possible performance.

Author Bio
Article by George Little.
For more information on the Internet Income Course and other works and courses by George Little, see www.profitpropulsion.com.
For Web Hosting services specially designed for SFI affiliates, see www.profitpropulsion.com.

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