Search engine marketing (SEM) is all about relevancy and correct targeting. How relevant are you on Google AdWords in relation to the search volumes?

Search Engine Marketing (SEM)

Search engine marketing, or SEM in short, is all about relevancy and correct targeting. How relevant are you on Google AdWords in relation to the search volumes? I’ll try to explain what I mean using a metaphor:

Fishing for Matches

Imagine fishing in a huge lake. You bring your fishing rod. The lake is huge and in time you will most likely get a lot of fish, but it will be time consuming (read: expensive) as you have no idea where the best fishing spots are.

Let’s say that it takes you 5 days to scour the entire lake (read: cost = $5000) and you get 100 fish (read: 100 transactions).
The cost per transaction (CPA) is $5000/100 = 50$.

This is a broad-matched keyword strategy.

Some advertisers are fine with this. For a large budget, they get a lot of fish (read: transactions). We don’t settle with this, as we don’t like our clients paying more than necessary.


Narrowing Your Focus Area

Let’s take it one step further. After having explored the whole lake, you’re pretty sure where the best spots are, so you only visit those spots and ignore the spots without any fish.

The duration of your fishing trip is 2 days (read: costs you $2000) and gives you 95 fish (read: 95 transactions).
The cost per transaction is $2000/95 = 21$.

This is a phrase-matched keyword strategy.

We’re on the right track now. We want the fish, and we’re getting it, but we want it now (read: cheaper!)


Let’s go even further

This third time going to the lake, you’re perfectly sure where the majority of fish are. You go straight to that place, and while you won’t get as much fish as you initially got while fishing in the whole lake you’ll get a lot more fish per hour (read: reduce the cost per transaction).

This time it took you 1 day (read: costs you $1000).
Compared to the 5 days (read: $5000) it took to scour the entire lake, this was really fast (read: cheap).
During this trip, you get 90 fish (read: 90 transactions). The cost per transaction is $1000/90 = 11$.

This is an exact-matched keyword strategy.


Summary

  • $5000 gave you 100 transactions using broad keywords only.

    (CPA = 50$).

  • $2000 gave you 95% of the transactions using phrase keywords only.

    (CPA = 21$).

  • $1000 gave you 90% of the transactions using exact keywords only.

    (CPA = 11$).

Imagine what would happen if you put your $5000 into highly relevant exact match keywords after having scoured the lake for what could be years. The amount of transactions would go through the roof at a very reasonable cost per transaction (CPA).

I know what you’re thinking. When it comes to SEM you first need to scour the lake to get any idea where the fish are. We at Precis Digital do this too, but we supervise it closely and run it in controlled environments for a set amount of time.
Moreover, because of our great experience with online marketing we often don’t have to scour the lake at all as we’re pretty sure where the fish (read: transactions) are to begin with – we’re sort of locals that live in close proximity to your lake.

The general problem is that some advertisers might either scour the entire lake for too long without knowing how to handle the data or simply what to do with it.
This leads to the conclusion that it is very important to have a clear picture of your long-term SEM strategy.

We at Precis Digital are proud of the fact that we’re truly data-driven. Our team of mathematicians, statisticians and data scientists work to ensure that we always have data to back us up in our decision-making when it comes to optimizing our clients online marketing efforts.

We continuously strive to improve our processes and understanding in relation to Google AdWords and other paid marketing channels by for instance attending international SEM summits and by holding internal SEM training in high regard. This enables us to fulfil the company’s vision of being the best at what we do, wherever and for whomever we’re doing it.

Oskar Thunmarker Team Lead Linköping