For Keyword Targeting in Paid Search, Beware The Galaxy Effect

Description: the-galaxy-effect-sem-universe.jpg

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:

The Galaxy Effect

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:

Glenn Gabe
Featured SEO Writer for SEJ Glenn Gabe is a digital marketing consultant at G-Squared Interactive and focuses heavily on SEO, SEM, Social Advertising, Social Media Marketing, and Web Analytics. Glenn has over 18 years of experience and has held leadership positions both in-house and at a global interactive agency. During his career, Glenn has helped clients across a wide range of industries including consumer packaged goods (CPG), ecommerce, startups, pharmaceutical, healthcare, military, education, non-profits, online auctions, real-estate, and publishing. You can follow Glenn on Google+ here.

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13 thoughts on “For Keyword Targeting in Paid Search, Beware The Galaxy Effect

  1. “After the audit, I restructured the account to have 4 campaigns, 78 ad groups, and 11,850 keywords.”
    Very interesting, Glenn. That’s over 150 keywords per ad group. How do you keep the ads relevant to the keywords in the group when there are so many? Also, it would be interesting to know what match types you use with so many keywords. Are they all exact match? I am always looking for ways to improve paid campaigns and agree that someone getting started now has a steep learning curve compared to what we had years ago.

  2. Thanks for your comment Chuck. Some of the ad groups had a handful of keywords, while others had many more. It depends on the category at hand. I’m a big fan of using phrase and exact match as much as possible, which can lead to more keywords per ad group (again, for some categories).

    And yes, the learning curve now for SEM is steep. I’m glad I started when I did. :)

    1. Thanks Seth. I’m glad you liked my post. I’ve seen The Galaxy Effect enough times that I finally decided to write about it. I hope the post can help more people neutralize it. :)

  3. Insightful post. Do you find that across all the clients you’ve worked with there are categories of often missed keywords? For example, a plumber may have the following categories: brand keywords, explicit keywords(plumber, boston plumber, plumber help), competitors names, etc. What categories are often missed?

    Thanks Glen!

    1. Thanks Luke. I’m glad you brought up a local example. For the plumber you listed above, prospective customers might be searching for many issues or problems that plumbers can help with. In addition, there may be various areas of focus for specific plumbers. Then you could potentially target people searching for how to install x, y, and z (and possibly by part or manufacturer). Then there are area-specific searches that might yield targeted visitors. Using New York as an example (I’m from NY), SOHO, midtown, upper west side, Chelsea, etc. might be viable areas to target keyword-wise. Those are just a few quick examples of how you could possibly expand your targeting.

      Regarding how many times I see missed opportunities, it really depends on the specific business at hand. If a company has hundreds of products all targeting different categories, then they might be missing thousands of potential keywords. A good brainstorm and extensive keyword research really helps when you are starting off. I hope that helps.

      1. That does help. I’m sure this is different for everyone, but when I start my KW research I usually focus on the explicit and brand keywords. Thanks for pointing out some of the other categories that I usually miss. The Galaxy Effect is a great reminder that I can always find more KW opportunities!

  4. I am so glad this internet thing works and your article really helped me for my campaign. Might take you up on that home advice you gave. Perhaps a guest appearance would be good.

  5. Very interesting article. I’m a bit confused though: How can you manage to find 10000+ keywords for only 1 brand? And it seems that you agree to pay for SEM on branded words… I hope you meant it for competitors brands, otherwise it seems pretty strange to pay for someone who is already looking for you?

    1. Thanks for your comment. No, the thousands of keywords were not for the brand. The additional keywords were for the various categories that they should have been targeting, but weren’t.

      Regarding running brand keywords, this completely depends on the business at hand. You need to test this for each client to see if it makes sense. There are times you would want to run those branded keywords even when ranking in organic search. i.e. If the company is in a hyper-competitive industry. There are times I have advocated pausing branded keywords and then there are times I have pushed to keep them running. Again, you need to test this out for the company at hand. I hope that helps.

  6. At first, i thought Galaxy effect is something crucial. But i guess companies having limited budget and resources can survive and gain profit despite of having a galaxy effect. Galaxy Effect is totally seems like a think big concept. However, big businesses and companies having overwhelming budgets can afford it and generate more than double revenue subsequently by targeting a wide range of categories and keywords.