google adwords: when to switch from broad match to exact match

In Google Adwords, you can use three different types of keyword matching: broad, phrase and exact match. These matches help you to target specific visitors based on the search queries that they use to search. It is probably one of the most important feature in Google Adwords that you have complete control over.

Unless you have a very specific idea or good grasp over what you are targeting, most tend to start out with a broad match generic keyword when creating their campaigns. At some point, you might realize that it is not working as well as it should and you need to diversify to get better returns. But when and why would you do that?

It is all about expectations that you have for the campaign. You should never go in completely blind without a plan, having said that it is really hard to predict ahead of time which keywords are going to convert the best for you. This means you will need to gradually collect some data for the campaign that helps you to extract good keywords from the bunch.

A good rule of thumb is that you set some generic benchmark expectation for the campaign before you even start. This helps with comparing the results over time. You should set some targets such as:

  • How much traffic are you expecting to generate from this campaign?
  • How much budget do you have for this campaign?
  • How much revenue do you expect to generate from this campaign?

You should be able to come up with some more simple questions that are specific to you campaign and/or the product you are trying to advertise.

Also you should be able to come up with some easy answers for these questions. For example, let’s say in the next month we want to spend only 100 USD on this campaign, and we want to get at least 250 visitors to the website. This traffic should generate revenue between 1500 and 2000 USD. This is probably a very outlandish example (i just want to emphasize that it is just an example) and the exact values will depend very much on the specifics of your campaign.

So, when should you switch from broad match to exact match (or phrase match). I believe that you should always use exact and phrase match rather than broad match, but answering the following questions should give you a better idea as to what is more suited to your scenario.

  1. Are you getting a lot more impressions or clicks than you targeted? Getting more traffic than you had hoped for is not necessarily a bad thing. It could also be a sign that your campaign is not targeting the audience very well. The impressions along with other metrics such as CPC (Cost Per Click)  and CTR (Click-Thru Rate) should answer that question. Your keyword is probably too generic and the broad match type is not helping as well. Ideally, you need a low CPC and a high CTR.
  2. Is the Click thru Rate (CTR) for the keyword very Low? Again this is a sign that you are targeting an audience that is way broader than you should. Low CTR can hurt your quality score and increase the CPC and budget. Now, I understand that Low CTR is a very subjective term dependent very much on your campaign. Ideally, you should be targeting for a CTR higher than 5% or so.
  3. Are you paying a high Cost per Click (CPC)? We decided that we wanted to get 250 visitors for 100 USD, which means your ideal CPC should be around 0.40 USD. If you are seeing a value much higher than this, then you should start to optimize your campaign to better target your customers. It is quite possible that you underestimated the CPC, but if that is what you want to pay then you should start targeting a much more specific set of customers.
  4. Are you running out of budget regularly? If you find yourself running out of your daily budget then you it is a sign that you are spending your money on clicks or visitors that you should not. It is time to skim the clicks and target only the best converting users and keywords.
  5. Are there a lot of non-converting clicks or Low ROI (return on investment)? We started with the idea that about 250 visitors will generate a revenue of 1500 USD which is about 6 USD per visitor on average. If you are generating an average revenue that is less than this guesstimate, then it is probably time to let go of the low converting users.

If you answered NO to all of the above, then good for you. You have pretty much nailed your keyword and the audience, but keep an eye on it as it can change over time. Also, it is important that you make the analysis after you have had enough data over a period of time. I suggest at least a week worth of data.

So, if you answered YES to one or more of the above questions, then it is time to rein in your campaign. One of the best way to do this is to optimize the keywords and the match type. As I mentioned earlier, I am a big fan of exact and phrase matching.

Two (or Three) exact match keywords is better than one broad match keyword …

When you decide to change the match type to exact match, do not just change the match type of the current generic keyword and call it a day. This could drastically reduce the campaign effectiveness and it might swing to the other extreme, almost getting no traffic at all. Also, this will not (in most cases) capture the search queries that you do want to target.

I suggest a three step approach when changing the keyword match type:

  1. First, fine tune the initial estimation that you made further using the new statistical data that you have got in past week or month. For example, Is the budget enough or should i spend a little more (or less), if so how much? Is the user estimation realistic or should i increase/decrease it ?
  2. Find the search queries that is converting the best. You can use Google Analytics data along with Adwords data to find the exact queries that have generated the most revenue. This is the keyword/user you should explicitly target. Add this exact search query or keyword to the campaign and use exact match type for that keyword. You could use the phrase match if it is a long tail keyword. This keeps your best users and best converting keywords at least at the same level of conversion.
  3. Modify the bid on generic broad match keyword to better reflect the new estimate. Normally, i don’t recommend removing the generic keyword altogether. This keyword can still generate good data for the next iteration. You can reduce the bid amount for keyword if the CPC is too high. Once you have enough number of the exact match keywords, you can remove the broad match completely.

Now, you will need to go through the same iteration multiple times, every few weeks or so to hit your target criteria. Even after you have met your target, you can still keep optimizing the campaign further to better your returns. However, you will need less and less number of iterations and you can increase the time interval between them.