Are you targeting the entire universe of prospective customers via your paid search campaigns? If you are unsure, you’re not alone. There are many factors that go into running a successful paid search initiative, including mapping out the right account structure, performing extensive keyword research, building ad creative, crafting campaign landing pages, analyzing and optimizing campaigns based on analytics, etc. Paid search has definitely grown in complexity over the past several years, and innovation in SEM is not slowing down. It’s one of the reasons I’ve been performing more and more paid search audits recently. Similar to SEO audits, paid search audits enable you to understand the strengths, weaknesses, and opportunities across your SEM campaigns. Based on an audit, there are usually a number of items to address, including adjusting campaign settings, revamping account structure, refining keyword targeting, changing network targeting, etc.
One extremely important part of an SEM audit includes analyzing a company’s keyword targeting, or reviewing the keywords a company is running to target prospective customers. In the current paid search environment, if you don’t target the right keywords, you’re missing huge opportunities to reach targeted users. And that directly impacts the effectiveness of your campaigns.
Keyword Targeting & The Galaxy Effect
When it comes to selecting targeted keywords, how many categories and keywords should a company target? Most companies can quickly figure out the obvious starting points for their businesses, but that’s typically not enough. For example, some companies simply run branded keywords or keywords that consumers already associate with the company at hand. In my experience, it’s common for companies either just starting out in paid search, or companies without a lot of experience in SEM, to unknowingly limit their keyword targeting. This can lead to missed opportunities and potentially wasted budget. I call this phenomenon “The Galaxy Effect” and it can severely limit the potential performance of any SEM effort.
I call it The Galaxy Effect because it’s very easy to focus on one star in a Galaxy, because it’s so bright and powerful (the people that already know about your brand, products, and services). But there might be tens of thousands of stars in a galaxy that could very well include prospects. So, if you’re goal is to increase your customer base, gain incremental sales and revenue, etc., then The Galaxy Effect will often fail you (or lead you to very limited success).
To be clear, I’m not saying to ignore branded keywords and people that already know about your brand or products. I actually think it’s a smart move to target them in many situations. Instead, I’m saying you should perform extensive keyword research, understand the range of categories and keywords that prospects are searching for, and then structure a robust set of paid search campaigns to target those prospects. Then, using a strong analytics setup, you should analyze and optimize those campaigns to increase performance. That very well might mean pausing campaigns and ad groups that don’t perform well, but you might also find incredible ways to target prospects that weren’t apparent before your research. This will enable you to hone your campaigns on the highest performing ad groups and keywords. If you don’t go through this process, then you are probably leaving money on the table. That’s money that your competitors might very well be scooping up. That’s why The Galaxy Effect bothers me so much. It leads to lost opportunities…
Here’s a graphic showing The Galaxy Effect. It represents targeting a limited number of prospects in a given market versus targeting the entire universe of prospects in that market:
An Example of Identifying The Galaxy Effect
Imagine for a second you were hired to perform an SEM audit for a medium size business doing about $50MM in revenue. They contacted you because they started running paid search last year, but they want to better understand their opportunities in SEM. They tell you that they are very happy so far with their paid search performance, so you ask for some top-level statistics (just to get a basic feel for the account before you begin the audit). They send along an email with the following statistics:
Top-Level Campaign Performance for Past 6 Months: