Targeting The Tail: How To Get The Most Out Of Every Marketing Dollar

Last year, I wrote this article about targeting the tail of search queries to maximize return on investment in Paid search advertising. For the benefit of everyone, I share it with you in its entirety: 

A lot has been said about pay-per-click management since its introduction in the late 1990s by GoTo.com, now known as Yahoo! Search Marketing. Google jumped on the bandwagon as first-generation “paid search expert” Kevin Lee was fueling education and general enthusiasm for a brand new form of online marketing known as pay per click (PPC).

I remember the day it became clear to me that in order to get the most out of every online marketing dollar utilizing pay per click, we had to target the tail, or focus on search words that are used less often, but carry a far greater level of information. The term “targeting the tail” took some time to get into our everyday online marketing conversation, but intuitively our discovery confirmed itself over time as we dug into a gold mine. This article unleashes the gold nugget of Search Marketing. So listen up.

Even though PPC management techniques have been around for years and the underlying principles for targeting the tail are quite simple (really, a million of microscopic target markets that need to be looked after with precision in every step of the PPC creation process), few pay-per-click campaigns reflect this basic principle. Just plain not taking the time needed might be to blame for this lack of sound customer-service focus in elaborating a campaign, but for now, let’s take a look at some other arguments for targeting the tail.

The Challenge: Rising Click Cost
SEMPO recently published their latest report, “State of Search Engine Marketing 2005”, where it clearly points out that the biggest share (83%) of online marketing expenditures is spent on paid search advertising. That being said, as more and more companies are fighting hard for the top five paid positions, all that they see climbing nowadays is their average cost per click and their blood pressure.

The Tail And The Purchase Sales Cycle
If you build PPC campaigns in a competitive environment like travel, you know by now that this query is searched more than 2.7 million times a month (source: Yahoo! Search inventory tool). The first question that should come to mind is: Where do all these people want to go? A little more analysis allows us to discover that a one-word search query is often initiated by an online shopper who is not quite ready to buy, but as they progress in the sales cycle, they will eventually refine their search query to something substantially more specific that reflects their true intent. What was at first an intuitive online behavior was confirmed later on: focusing on tail search term queries is like selling to customers when they are far more advanced in the sales cycle, and therefore much closer to a completed sale. Responding to the uniqueness of their intentions and desires is in fact good customer service.

Campaign Optimization
Once you understand the need to target the tail and you have established the keyword inventory you are planning to use for your campaign (including misspelled words, synonyms etc.), it is time to work the ad copy. It is in fact quite painful to go through every keyword contained within the tail, regardless of your product/service category. As a Google or Yahoo! Search Marketing rep will tell you, in order to make sure your customers understand that you are talking to them, you need to repeat the search terms in the title of your ad as well as in the description. Of course, they also need to land on a page that reflects the content of the initial search term they used, but that is another topic all by itself. Doing so implies that you write the ad copy on a keyword-by-keyword basis, which is especially the case for Yahoo! Search Marketing, as they allow you to refine your campaign at the keyword level. Sometimes it takes days or weeks to go through your keyword list, but when you are done, you will be flabbergasted by the results and will thank your lucky stars that you took the time to work your keyword list to that level of detail. At the end of the day, not only will you be more impressed with the results of your campaigns, but also your customers will think your site is relevant to their true intent and will respond positively to it.

Closer To Completed Sale: ROI
As I pointed out earlier, one of the secrets of a successful pay-per-click campaign lies in the tracking and the measure of the ROI (Return On Investment), especially when it comes to the search terms located in the tail and their corresponding cost per click. I have found that there is in fact an inverse relationship between the quality of a search term in its ability to convert into sales and its cost. In short, terms that cost less convert better. Then again, it takes a bit longer to build campaigns that contain hundreds, if not thousands, of search terms. By doing so, it should not come as a surprise that the average cost per click of a newly optimized campaign can go from over a dollar per click to $0.50 or even lower. If you can get more qualified traffic per dollar you invest, while every other variable remains stable, you will generate more sales at less cost. You will then be able to measure your cost of sales over time and will be pleased to see it dropping as you drill deeper in the tail.

Conclusion
I have heard too many business owners say that they care about their customers and are always striving to find ways to serve them better. If that is truly the case and you believe you are building a customer-service-driven organization, then you should take the time to understand all the search terms that your target audiences uses in search engines to build pay-per-click campaigns around their desires, needs and wants. Their search behavior should be your guide in developing your online marketing plan, which implies using all the search terms within your category. Targeting the tail is not difficult per se, but it needs time, dedication, and effort. Fortunately, there are tools out there to help you get the job done, and, by doing so, not only will you be delighted with the results, but so will your customers.

Permalink /// Comments (1)

Comments

1. super site!

   Posted by mike18 on 05/16 at 05:39 AM