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  • Author: Advertise.com Team
  • Date: April 28, 2014
  • Category: Contextual Advertising, Keyword Management, Online Advertising, Remarketing
Boost Your ROI in Competitive Advertising Markets

By Jordan Bell, Marketing Manager

We can’t all advertise in a vacuum. Unless your business operates in a specific niche unknown to most other companies (and today, that’s unlikely), you’ll undoubtedly face some tough online advertising competition.

As you probably already realize, you’re not the only one bidding on keywords for your target market, or ad space on relevant websites. Not all of us can afford those double-digit-priced clicks at high volumes, especially in the more competitive industries like retail, insurance, cars/automotive, legal services, and so forth.

But even if you can afford it, finding profitability with budget-draining campaigns can be a huge challenge. How can you more effectively dominate your targeted ad space, but not get into a spending war with your competitors? And how can you be sure you’re maximizing your ROI, or getting a positive ROI at all?

Start Optimizing Your Keywords!
No matter what text ad medium you’re using—be it Search or Contextual—optimizing your keywords is of grave importance. Every irrelevant click costs you money and hurts your ROI, which is why it’s important to measure: keywords and search strings used to reach your site; how much you’re paying for these terms; and how much of an impact they are having on your conversion or traffic goals.

Try Negative Keywords
Take a look through the keyword strings that triggered your ads. What if you sold a specific style of men’s [wrist] watch, but are getting ads clicked by users looking for a way to “watch men’s tennis?” These are clearly wasted dollars for an ad that could have been triggered by broad match keywords like “men’s watch”. The marketer could fix this by adding a negative keyword like “tennis” and save more ad dollars from useless clicks. Reviewing your keyword reports and search queries periodically should show you ad-generating keyword strings you never anticipated, but want to get rid of!

Implement Keyword Matching
One way to improve your relative ad performance is to match keywords to your ad titles. You can do this by re-organizing terms that resonate with specific audiences and their search behavior. For instance, if you’re a real estate agent, you may have “house” groups and “home” groups so that you can match people who search “buy a house” or “buy a home” to ads that use their term of choice.

Go Beyond Your SEO Keywords
When it comes to SEO, the sky’s the limit. Based on your content linking strategies, you can go after almost any keywords that make sense for your business. But when it comes to PPC advertising, bidding for the same generic keywords as on your SEO list will often result in high CPCs and CPMs—the issue you’re hoping to mitigate. That’s why you should optimize your keyword list by looking for keywords and phrases that you aren’t already organically ranked for, but that represent what your customer is looking for. You can cross-check your SEO list to identify advertising keywords that might be cheaper but still drive relevant traffic to your site.

Look for the Long Tail
Long tail keywords can help you identify customers that are further along in the purchasing process or who know more about what they want. While there may not be as many searches for those particular keyword phrases, they tend to be higher quality because the person searching knows what they want. And competition will be less on these keywords, meaning your CPC will be lower and your ROI should be higher comparatively. 

Remarketing
Want to slash costs and improve your ROI? Remarketing is your friend. Remarketing clicks cost, on average, 22% less than search clicks according to a recent case study. If your customer left your site without taking the action you wanted (maybe they got distracted or it wasn’t the right time), a strategically implemented Remarketing campaign could get them back for a much lower cost conversion. In other cases, you can achieve greater lifetime value on existing customers by Remarketing to them at a lower cost than trying to acquire new customers. In the referenced study, higher conversion rates mixed with the lower cost per click led to a 25% lower conversion cost. But results can be even better, whereas one of our current clients selling flowers online was able to earn as much as 14x ROI through their Remarketing campaign.

Work Backwards from Target CPA
One of our key optimization strategies with clients is to work backwards from their conversion goals. Once you have enough data on the average conversion rates of particular landing pages, you can calculate back to the CPC you need to generate traffic with. Here’s an example: Say you’re looking for a $25 cost per acquisition goal, and you have a conversion rate of 4% of those who click your ad. That means you need to aim for an effective CPC of $1.00 in order to reach your $25 CPA goal.

Here’s as a helpful calculation to figure out your target CPC:
CPC  =  CPA  x  Conversion Rate
CPC  =  $25  x  4%
CPC  =  $1.00

That said, if your maximum keyword bid and effective CPC don’t allow you to generate enough traffic—which can happen because you get priced out by the competition—then try to improve your conversion rate by re-designing and optimizing your landing pages.

Since 2001, Advertise.com has offered competitive online advertiser and publisher solutions to companies around the globe. Our mission is to help advertisers achieve their best ROI with high-quality, cost-effective ad units, as well as provide our publishers with monetization tools that yield the highest revenues. Contact us to learn more or get started with your advertising campaigns.

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