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 significant loss of AdWords cash, and we’re making losses. by advertising on AdWords. AdWords will be a cash burner if your business manages AdWords manually. There are a couple of strategies that you can use to 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 primary keywords. Competition for top keywords is high and often leads to high bids. Due to the high bids and the 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 doesn’t work for them, but they’re only focusing on top keywords and haven’t thought outside the box 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 traffic from AdWords without long-tail keywords. Each long-tail keyword can generate a small amount of traffic, but together, millions of long-tail keywords generate a large 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 correct campaign and ad group, and then deploy the keywords along with the campaign, ad group, and ads in AdWords. Once keywords are implemented, keyword bids should be adjusted through automation based on keyword performance to ensure a high return on marketing investment.
I’ve seen most small to medium-sized eCommerce businesses set up their AdWords campaigns with an initial set of keywords and corresponding bids at the ad group level. Bids 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 keyword and bid changes once a month on average. This approach decreases ROI and marketers tend to lose confidence in AdWords. To get the most out of AdWords, long-tail keywords need to be added constantly, and bids for 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 can be added to your campaigns on a daily basis with a lower bid. These two strategies improve the ROI of your company’s AdWords campaigns.
My experience shows that long-tail keywords can drive up to 50% of overall AdWords revenue and push AdWords campaigns into a profitable zone. Around a million keywords would be normal for a medium-sized eCommerce company. I would recommend eCommerce businesses, especially midsize businesses, to explore the option of automating AdWords for profitability.