Search Marketing - "buy the rumour, sell the fact"

By Rod Jacka

When setting up your paid search campaigns, Google Adwords and Yahoo Search Marketing both suggest keywords to use. This feature makes it easy for you to find popular keywords. It also helps you estimate how many clicks you might get. There are also excellent tools such as WordTracker and Keyword Discovery that can assist you to research keywords.

But popularity isn't everything; it's conversion that really counts.

One adage that I have always liked from the world of finance is "buy the rumour and sell the fact". What this means is that if there is a rumour that a share is about to rise in price then traders will often buy that share based on this rumour. They do this so as to not miss out on a potential opportunity to make some money as the price rises (or falls).

What separates the good traders (i.e. the ones that stay in business) from the poor ones is "sell the fact". A disciplined trader will rapidly dump any shares they hold when the rumour turns out to be false. They will take a small loss and then look for other opportunities. At the core of most successful share trading schemes is a strong discipline to keep losses small and to make the most of any rise in the price.

With a little bit of lateral thinking we can apply the same approach to our search marketing. To do this you treat each of your new keywords that are added to the campaign as a "rumour" and invest some money into them. Once they are attracting clicks to the site we then look for whether they convert combined with other performance indicators. Once we know the "fact" we can then decide to sell or change the keyword.

To do this successfully you need a professional web analytics tool such as ClickTracks, Google Analytics or Urchin. You also need to define your website goals and ensure that your campaigns are tagged correctly. With all of this in place, you can then start to assess the value of each keyword. In order of priority here are the factors that I assess for each keyword:

1. Conversion Rate: Goals achieved / total visits from that keyword. Higher is better
2. Bounce Rate: Visitors who leave immediately / total visits from that keyword. Lower is generally better
3. Time on site: How long on average do visitors from this keyword spend on the site. Longer is generally better
4. Av. Pages per visitor: How many pages on average do visitors from this keyword view on the site. More is generally better

Where a keyword fails to have good values on at least 3 of these it should be dropped. Assessing keywords in this way can help you to priorities your advertising budget and to only take small losses whilst making big wins.

For assistance with implementing this approach please contact the Panalysis Team or join our online PPC optimisation course.