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Too Broad! (In: Pay Per Click - Google/Yahoo & Others)
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flyingrose
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Joined: Oct 30, 2003
# Posts: 3361
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Posted: 2007-Apr-24 00:24
Now that many advertisers know their cost per conversion through using Google's free conversion tracking and/or Google Analytics they'll be able to see a common challenge more clearly.
Unless you can continually improve your advertising and site, profits will continually decline due to competitive pressure. While part of this is from increased numbers of advertisers, the design of Google's system accelerates competition artificially.
Here is an example explaining why. Suppose we have five advertisers and each is advertising their own special niche. For simplicity's sake and in honor of Tonerman who has more struggles with Google's system than most, I'll use his industry in my example.
Each of our example advertisers sells printer cartridges but each has a different inventory and is bidding on different keyword phrases:
Advertiser 1 only has cartridges for HP inkjet printers
Advertiser 2 only has cartridges for HP toner printers
Advertiser 3 only has cartridges for Canon printers
Advertiser 4 only has cartridges for Lexmark printers
Advertiser 5 only has cartridges for Epson printers
If each of these advertisers is bidding primarily on different keyword phrases, each only has to outbid advertisers competing in their specific niche. Each can target their specific products and generate a positive ROI.
If Google's system decides to "expand" broad match to equate many of the phrases they each use, competition for those keywords in greatly increased. Instead of hundreds or possibly thousands of separate search results for five different niche markets, now they're all forced to bid against each other for ad space.
This behavior can greatly increase advertising spend while simultaneously lowering conversions. Here is why:
Originally a search for a specific brand and model of printer cartridge showed ads specifically for that brand and/or model and landed visitors on those specific product pages.
An expanded broad match search now mixes ads for different brands and models or printer cartridges in general. This not only greatly increases advertising costs it also reduces the likelihood the searcher will find the product they're seeking.
If they manage to get to the advertiser's site, even if that seller has the item the visitor may not find it. If this situation is affecting you, now could be a good time to improve the search function of your site.
Google's system has always worked like this. Keyword phrases that were low traffic, with low bid costs, very high CTRs and excellent conversions will suddenly drop off the first page of results.
If you bid high enough to improve your position you will see much higher ad costs due to both higher click costs and much higher traffic. Because your ad is being shown for many unrelated searches impressions and clicks will be much higher and conversions much lower.
In the past it was easier to add new search phrases and products to find a new niche. As more and more keyword phrases that have been used by you or other advertisers are broad matched this will get more and more challenging.
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custardmite
Joined: Mar 12, 2007
# Posts: 3
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Posted: 2007-May-16 14:40
It's quite a serious problem, and it can destroy your campaign overnight.
I was managing a campaign for a company that sells leather beds, and suddenly their traffic doubled overnight. I tracked it down to the broad match, and switched it off - it's interesting to note that a Google search for "upholstered beds" in the UK returns leather beds, wooden beds, upholsterers, headboards and contemporary beds, but no mention of upholstered beds - it appears that many other companies haven't noticed yet...
At least the DKI returns the word that it matches to, not the actual search term, or these sites would all have products in their titles that they don't sell - perhaps we should be grateful for small mercies?
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flyingrose
Staff
Joined: Oct 30, 2003
# Posts: 3361
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Posted: 2007-May-17 05:52
Hello custardmite and welcome. Yes, this is an extremely serious problem which is why I started the thread and tried to get Google to modify what they introduced into their system that created it.
Although I don't know that I have ever seen it written, Google's system is what would be considered a "neural net". A "neural net" supposedly "learns". How that applies to advertisers is that Google's system continually broad matches keyword phrases.
This has always been part of their system and has impacted advertisers for years; however, the longer something has been advertised online and the more keyword phrases get equated the tougher it is to make money with Google ads.
Your example explains why. At one time you could buy clicks on the search "upholstered beds" reasonably, searchers could find what they wanted, and they would buy it.
Then Google's system decided "upholstered beds", "leather beds", "wooden beds", upholsterers, and all the other items you mentioned are the "same" as "upholstered beds". For your ads to show up you now must outbid all those other advertisers.
Not only that, but the buyer will have a much greater challenge trying to find what they want to buy!
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