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In many ways, effective Adwords account management is a balancing act. Whether you’re trying to balance sales volumes with the cost per sale or trying to write a compelling advert whilst trying to stand out from your competitors, you’re often pulled in opposite directions.

I am often approached to appraise accounts for advertisers, and one of the most common problems that I see is also perhaps one of the most understandable, it’s the result of failing to find the balance between relevancy and optimisability.

In a well-managed account, the advert should relate to the keyword, and frequently, a tailored landing page is beneficial. In addition, the conversion rate could be slightly different for every keyword, so if you take this to an extreme, you could argue that having an Ad Group for every keyword would make sense.

However, there can be problems if you take this too far. Assuming that you have a reasonably complete keyword list, most of your keywords are likely to get very few clicks and conversions.

On a recent review of my accounts, I found that typically, 70% of my clicks were being driven by around 3% of my keywords.

So how do you go about managing the bids and optimising the adverts for the other 97% of your keywords?

Most of them will get one click per month, if you’re lucky. As a result, at a keyword level, you’ll never get a clear idea of the conversion rate for most of your keywords, and you won’t be able to reflect the value of the clicks that they generate in your bids.

Similarly, establishing which advert is more effective in a test is impossible unless you achieve a minimum level of traffic.

There are other problems as well. Suppose that you have an Ad Group targeting ‘Toasters’ on Phrase Match, and another targeting ‘Hinari Toasters’. Your generic Ad Group would need the word ‘Hinari’ as a negative keyword, in order to ensure that searchers see the correct advert. 

That’s fine, but what happens if you have hundreds, or even thousands of Ad Groups with the potential to overlap each other? It would be almost impossible to stop the same search query from triggering adverts from different Ad Groups, meaning that your bid adjustments would be ineffective and advert tests flawed.

It’s interesting that if I look back five years, I was seeing the opposite problem far more often – all of the keywords lumped into a single Ad Group, with a generic advert and one bid for everything.

Now, things are frequently going too far the other way.

Where is the balance that will allow you to get the best results from your campaign?

There is no perfect solution for this that will fit every account, but here are a few thoughts that may help with the balance.

Ad Groups should be mutually exclusive

No search should be able to trigger adverts from different Ad Groups , otherwise you won’t be able to set your bids for that search query; reducing the bid on one Ad Group will simply drive the impressions into another one.

In order to do this, every Ad Group needs a distinct identity. You need to be able to explain what the people in that Ad Group are looking for, whether it be cheap toasters, Hinari toasters, 4-slice toasters or just toasters in general.

Follow this rule, and it should be easy to generate a list of negative keywords to apply to the other Ad Groups in order to ensure their exclusivity from one another.

Bids should be set at Ad Group level

This sounds contentious, but my argument is simple. If the conversion rate is sufficiently different on two keywords in the same Ad Group that you need to apply different bids, surely this indicates that there is a fundamental difference between the people that are searching for them.

If this is the case, then there’s a good chance that different advert text, and even different landing pages, may work better for them. If two keywords in an Ad Group perform very differently, split them into separate groups and manage them separately.

There are two reasons to split keywords into different Ad Groups

Either you want to apply different bids to them (i.e. you believe or know that the conversion rate or conversion value will be different), or they are likely to respond to a different advert or landing page (e.g. putting the word ‘Hinari’ in the ‘Hinari Toasters’ Adverts, and landing people on the Hinari toasters page).

Only split your keywords if there is a clear benefit to doing so.

Following these simple rules will allow you to write and test relevant advert copy very easily, adjust bids at Ad Group level without reducing your return on investment, and manage your negative keywords much more easily.

Shane Quigley

Published 27 September, 2011 by Shane Quigley

Shane Quigley is Co-founder at Epiphany Solutions and a contributor to Econsultancy.

8 more posts from this author

Comments (15)

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Adrian Bold

Adrian Bold, Director at Bold Internet Ltd

Very good overview Shane. Thank you.

Building massive AdWords campaigns from the outset can often lead to problems. It is much better to grow slowly and steadily using the type of strategies you have outlined here.

almost 5 years ago

Manfredi Sassoli de Bianchi

Manfredi Sassoli de Bianchi, VP Marketing at jobinasecond

I absolutely agree with you Shane, the best keyword structure for a PPC account, is never the "perfect" one, but the optimal one for the resources you have available. The aim is finding the right balance.

The support of the right bid management platform can help to speed up a number of tasks and allow more time to be allocated in monitoring a granular structure.

almost 5 years ago

Jonathan Beeston

Jonathan Beeston, Director, New Product Innovation, EMEA at Media & Advertising Solutions, Adobe

Good article Shane but I think your argument on setting bids at the Ad Group level is too simple.

Even if the conversion rates are similar for keywords in the same group, the auctions may not be. A £1 bid for one keyword may get you position 2, but for another position 4. You will have inherent inefficiencies by not setting bids per keyword.

almost 5 years ago

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Mark, Digital Media Monkey

"Bids should be set at Ad Group level" - tend to agree with the sentiment, but this doesn't account for the effects of competition. Two similar keywords with similar meaning and uses might require different bidding strategies due to varying levels of competition in the live environment?

almost 5 years ago

Shane Quigley

Shane Quigley, Co-Founder at Epiphany

I'm not sure how bidding at Ad Group level causes inefficiencies, assuming that the conversion rates of keywords are similar.
I would suggest that your bids should be based on the value of the click that a keyword generates, rather than the position that the bid would achieve.
By equalising your ROI across the keywords and Ad Groups in your account, you will generally maximise your overall ROI for a given level of spend, with the exception of a few circumstances.

I would only take the action of competitors into account if they caused the conversion rate to vary by position - this can happen in certain situations, but is fairly unusual. If this were the case, I would move the keywords into different Ad Groups, as their conversion rates would justify it.

almost 5 years ago

Jonathan Beeston

Jonathan Beeston, Director, New Product Innovation, EMEA at Media & Advertising Solutions, Adobe

Bidding at Ad Group only works if the keywords have not only similar conversion rates, but also similar bid/position auctions and similar impression volumes. Otherwise you will certainly be bidding inefficiently.

almost 5 years ago

Matt Whelan

Matt Whelan, Paid Search & Display Director at Guava

I'd like to dispel the myth that an account can ever be "too granular". This is not the case, but the optimum account structure does take time to manage and require people who are experienced in dealing with AdWords at scale. This may be beyond the reach of some smaller advertisers, but for anyone with a serious investment in PPC, you're throwing money away if you cut corners in an attempt to avoid "overcomplication". If you do not structure your keywords into tight highly relevant ad groups your QS will suffer and you will lose out to your competitors in terms of both click share and profitability.

As others have said, ad group bidding just doesn't give you enough control over your results. If you feel like you have too many keywords to manually manage, look at investing in an automated bidding solution to help.

Regarding hundreds of overlapping ad groups - its not impossible to ensure mutually exclusive groups at scale - it just takes some intensive negative keyword planning (in fact for us this became such a common occurance we built a tool to help us do it!).

Managing PPC accounts to an optimum level isn't supposed to be easy, but there are serious rewards for not cutting corners.

almost 5 years ago

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Katie Saxon

I've encountered accounts that are over-complicated to the extreme, with so many ad groups that many simply never had impressions. Admittedly the problem was more to do with assuming that chucking every possible variation of a keyword into the mix - whether there was any search traffic or not.

almost 5 years ago

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Neil Campbell

Good article. I think one of the biggest over-complications is using 20 long tail phrase matches (often with no volume) instead of 1 or 2 modified broad matches. Sorting in Editor becomes a huge chore. Separating broad & exact matches in different ad groups with negative exact matches for the broad group then ensures you're driving traffic to the correct match type.

almost 5 years ago

Ashley Burgess

Ashley Burgess, Head of Web Analytics at Periscopix

Without quantifying what 'too much' or 'over complicated' actually means in the context of many different campaigns/markets this argument could go on for days. It is still not the biggest concern for most advertisers. Getting more granular (in an intelligent way) should still be the focus for most advertisers.

I have two main concerns regarding ad group level bidding:

1. This approach assumes that you make the decision on keyword ROI/conversion performance once. You then group like keywords and proceed to manage bids for that body of keywords as if their performance was to be the same forever. Of course this is not the case, campaigns do not sit in a time vacuum and keyword performance changes day to day, season to season etc. Does this mean that you constantly move keywords from group to group as their performance changes? This sounds pretty time consuming and would kill any chance of building up a measurable keyword-level performance history.

2. In order to find keywords with similar conversion behaviour, you are going to have to break keywords that relate to the same product/service into multiple ad groups. For example 'cheap hinari xyz toasters' will behave differently to 'super delux hinari xyz toasters'. If you're grouping by conversion performance then you end up with many ad groups for each product. Thereby increasing the complexity and size of the campaign. Surely something you were striving not to do?

almost 5 years ago

Margaret Robertson

Margaret Robertson, European Marketing Director at Canvas HolidaysSmall Business Multi-user

As an advertiser I can't say this article and the ensuing discussion gives any real clarity or reassurance of what constitutes best practice, and if anything only supports the argument that there is no single best way to manage Adword accounts, and it is quite complicated !! Successful paid search campaigns like all advertising require a balance between subject matter expertise,interpretation of metrics and of course understanding the particular consumer behaviour, business and trading patterns of the product/service being advertised.

almost 5 years ago

Shane Quigley

Shane Quigley, Co-Founder at Epiphany

I feel you may have missed the point I was trying to make, Matt.

The arguments against making an account too granular aren't regarding cutting corners, or time-saving, and our process for optimisation is in no way determined by the resources that we have available. Perhaps I should have explained the reasoning behind our approach more clearly.

Where keywords are different, in terms of what users are looking for (something that can be determined either by looking at the keywords themselves, or by considering the conversion rates, where there are sufficient clicks to calculate them with any degree of confidence), then of course they should be split into different Ad Groups in order to deliver targeted advert text.

The point that I was attempting to make was that if a keyword is only generating a few clicks per month (as the majority of keywords do, unless you are simply putting a few keywords in using broad match), then there is no way to estimate the value of the clicks that it generates with any degree of confidence.

Further, any Ad Groups that are only generating a few clicks per month will not allow for a:b advert testing – you’ll never get a significant difference between the click through rates, and certainly not the conversion rates.

I have yet to hear a single explanation of why you should care what position your advert appears in when setting your bids - bidding excessively in order to ensure that the maximum budget is spent, or to impress people with your advert’s high position, is hardly in your best interest as an advertiser.

Regarding the overlap of Ad Groups, it is clearly impossible to avoid this, if there aren’t specific terms that identify the keywords within an Ad Group. As you have said, your Ad Group structure requires planning in order to ensure that the same search can’t trigger adverts from different Ad Groups. However, to take an extreme example, if you put every keyword in your account into its own Ad Group, it would be nigh-on impossible to ensure mutual exclusivity (unless you limit yourself to Exact Match).

It could easily be argued that using Bid Management to adjust bids is a way to cut corners to save time, but unless the bid management tool can take into account website issues or temporary stock issues, it will lead to inappropriate adjustments. This may be necessary for a few very large accounts, but for the majority of accounts, there are serious rewards for not cutting corners with your bid adjustments.

almost 5 years ago

Shane Quigley

Shane Quigley, Co-Founder at Epiphany

Thanks for your comment, Ben.

I would never recommend grouping keywords based solely on their conversion rates, if such splits in your keyword groups make no logical 'sense'.

I would only group 'cheap Hinari xyz toasters' separately to 'super deluxe Hinari xyz toasters' if both keywords had sufficient data to measure the conversion rate and average order value with a degree of confidence, and found visitor activity to be different. If this was the case, then people searching for a 'cheap' toaster may respond to a different advert (possibly highlight a sale, or prices in general), or respond to a different landing page (perhaps sorting by price, rather than popularity).

What I was getting at with this blog was that if an Ad Group is only getting one or two clicks per month, you can't adjust bids, advert tests or landing pages in any informed way, as you have insufficient data. Bid Management tools do not resolve this issue, as they suffer from the same lack of data as a human.

almost 5 years ago

Matt Whelan

Matt Whelan, Paid Search & Display Director at Guava

Hi Shane - I wasn't advocating bidding for position, i'm advocating maximising quality score by maximising relevancy. You may not care about position (in every case), but you should care about your keywords ranking in a higher position than your competitors when you bid the same amount.

Using a bid management tool is absolutely NOT cutting corners. Yes, a correctly implemented automation strategy will enable time to better spent on other areas, but it will also enhance decision making and in many cases lead to a level of performance beyond that which could be achieved manually. Again, it all depends on your strategy, but with your groupings you're actually advocating a more "portfolio" based management style - eg pool related keywords so you obtain actionable data - and that is something certain bid management tools are extremely good at.

I do see your point that managing low volume keywords can be difficult, and I would say that everyone needs to look at the contribution these keywords are making to their overall account, in terms of both volume and conversion, before embarking on any strategy.

almost 5 years ago

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