In order to use match settings and increase return simultaneously, you’ll have to understand a few things about match settings and search queries. One is that the level of impressions significantly decreases for phrase and exact match versions of keywords. And secondly, applying match settings to keywords should be done only with the intention of lowering “high” conversion costs or slowing the amount of clicks to conform to a limited daily budget.

When attempting to lower high conversion cost, it is important that you take all the preceding steps to lower conversion cost before applying match settings. Match setting will likely result in lower traffic and consequently lower sales volume. If you race ahead and apply match settings prematurely, you might forgo the opportunity to lower conversion cost without lowering traffic and sales.

This is disastrous because once you apply the match settings, you won’t be able to receive as much feedback from search query reports that could help you better qualify visitors to start. Also, you will effectively be taking other underlying problems having to do with inefficiencies in the website and just shoving them under the carpet. In other words, if we apply match settings simply to lower conversion cost quickly, you might lower your conversion cost and not be motivated to fix the other lingering inefficiencies in the campaign or on your site.

So when is it a good time to apply match settings? I recommend applying match settings in 2 scenarios:

1) The Conversion Cost is way above your target CPA (cost per acquisition/conversion) AND there are alot of single occurrences of irrelevant variation appearing in the search query reports that is too difficult to control with negative keywords.

2) The budget is extremely limiting compared to available impressions and you want to make sure the clicks you do pay for go toward the exact or phrase match variation of the keyword.

Testing ad variations simultaneously should always be done in the first scenario since the objective is to lower conversion cost. You’ll want to make sure you know which match setting variations are going help you achieve your desired CPA before you rule out any of them.

To run you through a short example, let’s assume the Target CPA is $50 per conversion. Historically, you have been running this particular keyword at $120 per conversion which is totally unprofitable for this product. (You know it is unprofitable because the keyword describes a product that you could never make a profit on by paying $120 to advertise it.) You have tried optimizing your website for a higher conversion rate and also applied necessary keywords but the conversion cost is still too high for the keyword.

It’s time to test out some match settings. You might do this for several keywords with higher conversion costs so be prepared to test multiples.

Keyword Before Match Setting Variations

Keyword = $120 per conversion

Keyword After Match Setting Variations

Keyword (Broad Match) = $170 per conversion (Conversion cost is likely to go up because phrase and exact match settings will trigger most of the very relevant queries and their volume.)

“Keyword” (Phrase Match) = $60 per conversion

[Keyword]  (Exact Match) = $ 48 per conversion

I would advise everyone to let the data population add up before making any official assessment about the new conversion cost stats. The above example portrays the possible outcomes of three different match settings. After enough clicks have accrued and we see numbers like the ones above, I would either pause the broad match version or isolate it into another campaign with a smaller budget. I am always hesitant to simply pause out words because a huge lack in visitors could shock the system resulting in extremely low sales. If you isolate these words, you can lower its spend and try and work on its conversion cost later through other methods.

I would keep the phrase and exact match even though the phrase is still above the target conversion cost. It’s much closer now and you can continue to work on it. You might find you can get it down to the actual target with some more negatives and ad text qualifiers.

With broad match setting out of this campaign, you have effectively freed up some of this keyword’s wasted budget allocation which can now be spent on profitable keyword click costs. The result is more profitable sales and overall net returns.

DISCLAIMER: In my experience, advertisers claim to be focused on conversion cost but tend to be even more sensitive to total sales volume. The above techniques are designed to lower conversion cost but could and probably will result in lower but more profitable sales volumes.

This entry was posted on Sunday, May 23rd, 2010 at 9:31 pm and is filed under Keywords, Match Settings, Search Query, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.