Over the past 2 years, I’ve talked to many e-commerce companies and heard a common theme about AdWords: Our AdWords bids are high due to competition, there’s a significant loss of cash in AdWords, and we’re making a loss. by advertising on AdWords. AdWords will be a cash burner if your business manages AdWords manually. There are a couple of strategies with which you can make AdWords a profitable channel.
Most eCommerce companies focus on AdWords campaigns with primary keywords. For example, a “red dress” or a “blue shirt” are considered top keywords. Competition for top keywords is high, often leading to high bids. Due to high bids and correspondingly high cost per click, the return on marketing investment is low and leads to a loss of cash. Ecommerce businesses tend to think that AdWords isn’t working for them, but they’re only focusing on head keywords and haven’t thought innovatively about long-tail keywords.
Long-tail keywords have the ability to drive website traffic at a low cost per click and a high return on marketing investment. For example, “red cotton dress” or “plain red polyester shirt” are considered long-tail keywords. Businesses are losing significant AdWords traffic without long-tail keywords. Each long-tail keyword may drive a small amount of traffic, but collectively, millions of long-tail keywords drive a huge amount of traffic.
However, it is not feasible to manually implement and manage long-tail keywords. SEM automation is required to generate millions of long-tail keywords, rank them in the right campaign and ad group, and then deploy the keywords along with the campaign, ad group, and ads into AdWords. Once keywords are implemented, keyword bids need to be adjusted through automation based on keyword performance to ensure a high return on marketing investment.
I’ve seen most small to mid-sized eCommerce businesses set up their AdWords campaigns with an initial set of keywords and corresponding bids at the ad group level. The offers usually increase in the first few days to get more traffic. Once campaigns start getting traffic, most marketing managers let it run on autopilot, making changes to keywords and bids once a month on average. This approach lowers ROI and marketing managers tend to lose confidence in AdWords. To get the most out of AdWords, long-tail keywords need to be constantly added and bids on all keywords need to be adjusted based on their performance. Monitoring bids for thousands of keywords manually on a daily basis is a challenging task. Automation can help adjust bids on a daily basis. Based on the search queries received on the site, new long-tail keywords may be added to your campaigns daily at a lower bid. These two strategies improve the ROI of your company’s AdWords campaigns.
My experience shows that long-tail keywords can generate up to 50% of overall AdWords revenue and push AdWords campaigns into a profitable zone. About a million keywords would be normal for a medium-sized eCommerce business. I would recommend e-commerce businesses, especially midsize businesses, to explore the option of automating AdWords for profitability.