Two Methods Of PPC Keyword Selection

When you’re creating a new PPC campaign, everyone knows that you need to start with a good keyword selection. But a real point of contention is just how you should go about building your keyword list. In my experience, I’ve seen two good ways to build out your keyword lists: I call them the top-down and bottom-up approaches.

The top-down approach involves picking the keywords that are likely to drive top search volume. Some people call these “head” keywords (as opposed to “long-tail” keywords). For example, if you were creating a PPC campaign for running shoes, a top-down approach would involve creating an ad group titled “Running Shoes” and filling it with top-down keywords like “running shoe” and “running shoes.”

The advantages of the top-down approach are that you will be almost guaranteed a lot of search traffic (assuming you have a high enough budget to get the right amount of impression share), and it doesn’t take that long to identify your main “head” keywords. After a few minutes on the Google Keyword Tool, you’ll probably have it all figured out. The disadvantage is that bidding on those head keywords is going to be very expensive very quick. With this approach, you should expect to lose money as you gather data, filter out poor-performing keywords, and add negative keywords. But, you’ll be sure to get the data you need fairly quick due to the high search volume.

For this approach to work, you’ll have to devote at least some of the head keywords to broad and phrase match types. Then, you can look at search query reports to identify more specific keywords (in this example, a good keyword might be “men’s size 9 running shoes”), and add them to new or existing ad groups. The top-down approach favors speed of data gathering in exchange for an initially high cost.

The other approach, bottom-up, involves going after those more specific keywords from the outset. In fact, you’ll want to totally avoid those head terms in favor of long-tail keywords that will achieve a better cost per acquisition. This will allow you to keep your CPA low, let you stay profitable from the outset, and use those profits to fund further PPC efforts. The downside to this is that it will take a lot more time and effort to build out your initial keyword list, and you won’t drive as much traffic since you’ll be targeting low-traffic search terms.

With this approach, you should start off with some very specific keywords, and use spreadsheet concatenation to expand your starting keyword list. Make one column for an adjective or attribute (i.e. “size 9″, “blue”, or “cheap”), another column for your core term (in this case, “running shoes”), and possibly a third or fourth column to make your terms even more specific. Then, use a spreadsheet concatenate formula to make all the possible combinations of those words.

When you add these in to your new campaign and run it for a while, you’ll find that most of the keywords you created are duds. But, if you cast a wide enough net, you’ll see a lot of keywords that get one or two clicks and then convert, leaving you a very low CPA on the keyword level. You won’t drive a lot of traffic, but by bidding on more obscure and less competitive keywords, you can often get a better return on ad spend than the top-down approach. Once your account is running well (and you’ve weeded out some of those duds), you can start slowly adding in head terms to see if you can turn a profit on those keywords as well.

The top-down approach works best for large-budget PPC accounts that need answers fast. The bottom-up approach works best to PPC advertisers that don’t have a lot of budget dollars and need to keep CPA low. But, you should experiment with both methods to see which one works best for your company.

About Shawn Livengood

Shawn Livengood is a search engine marketing professional based in Austin, Texas. He has extensive experience managing pay-per-click ad campaigns for clients in various industries, from small home-based businesses to large international companies. You can connect with Shawn on Google+.
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One Response to Two Methods Of PPC Keyword Selection

  1. Interesting idea Shawn, for my own SEO dabbling i’ve tended to go for “head” terms – although in our market, the search volumes for pretty much any relevant transactional keyword are so small (but competitive) that anything on the radar pretty much bills as a head term. I’ve a few friends in other sectors though who’ve been busting their budget this way, so I’ll suggest they take a look at your method!