Demystifying SEM: How specific do Ad Groups really need to be?

To continue the series in which we use real world examples to make SEM and other digital marketing topics easier to swallow, here is another question from a local business owner:

In thinking of the theme, Kid's Performances, should I group keywords and ads with Kids, Children, Toddler together, or is better to have an ad group for each? I guess I am wondering how finely I should organize the groups.

So, the core of the question really is: how specific do ad groups really need to be? 

The answer: pretty specific. 

Marketing Meme: Grumpy Cat

Why?

While it is tempting to plop all your keywords into a few ad groups and call it a day, there are many benefits to having very specific ad groups...and many drawbacks to not doing so.

In general, the more specific your ad groups are, the more related your ad text can be to the keywords in your ad group. This is important for CTR (click-through-rate) and ROI (return on investment) and will ultimately impact how much you pay for ads and how much you get in return. It can even have a long term impact on user trust and confidence in your business. In short, having specific ad groups is necessary for the health of your business!

Here's an example to demonstrate the real world application of this concept:

Take, for example, a company selling shoes, "Advertiser #1." The company wants to sell boots on their e-commerce website, so they start with an ad group for boots. They put all of their boot keywords into that ad group: nine west boots, gucci boots, high heeled boots, rain boots, etc. Boots is a clear theme, and they write a relevant ad text:

Boots on sale

Shop all the hottest brands.

Up to 30% off today!

This is an adequate starting point. BUT... let's say the competitor,"Advertiser #2," has a better structure, in which Gucci Boots, Nine West Boots, high heeled boots, rain boots etc. all have their own unique ad groups. 

Advertiser #2 is going to be able to make her ads even more relevant to the user who is searching for each of these items:

Gucci boots ad group:

Authentic Gucci Boots

Premium leather, sleek & stylish.

Shop hundreds of Gucci designs!

Rain boots ad group:

Premium Rain Boots

Keep your feet warm & dry.

30% off rain boots today!

Why is Advertiser #2 better?

Advertiser #2 is not constrained by needing to use generic language that is applicable across a range of different brands and styles that should all have their own nuanced tone and value props. Instead, with specific ad groups, she is able to easily address the specific customer segments for each product group with the most relevant language possible. 

Why is relevant language so much better?

Beyond the obvious, that it's important that users know what you're selling, there are additional reasons why relevancy is so important. On search engines, savvy users are used to seeing generic ads for companies that don't actually sell the product (Find 'whatever you want' at eBay...), and so Advertiser #2's ads have the added benefit being *very* clear to a skeptical user that she is, in fact, selling Gucci boots, whereas company #1 may just be an over-stretched ebay-like ad, running generic language across millions of products that it doesn't actually sell. 

Additionally, let's say that Advertiser #1 does in fact have some products that are 30% off (as stated in the ad), however Advertiser #1 isn't allowed to discount the Gucci products. She may have a higher CTR due to the sale language, but when the users get to the website, they will likely bounce and be annoyed because there aren't actually Gucci boots that are 30% off. By having separate ad groups, Advertiser #1 could segment sale language so that it only applies to the applicable product areas and brands, thus increasing ROI, conversion rate and user satisfaction and trust.

Advertiser #2 will see the results of her initial extra effort indefinitely, because the great thing about internet advertising is that there is a revolving door of new potential customers shopping for her products all the time. What starts as a few hours or days of extra effort pays off in perpetuity. 

OK, so now that it's clear why you should strive to have specific ad groups, we should talk about exactly where to draw the line.

How specific is specific enough?

To decide, you should ask yourself:

1) Can I write more targeted ad texts that will get a higher CTR by having a separate ad group? 

In the example of the Nutcracker requested by the client (at the beginning of this post), I would separate toddlers into their own ad group and then combine kids and children into one because they are basically synonyms. Toddlers are a more unique group and users searching for "nutcracker for toddlers" will find an ad that calls out toddlers more relevant.

2) Is there enough potential traffic on these variations to warrant the extra effort of a unique ad group?

This is tougher than it sounds to decide, especially in the Nutcracker example because 1) it is a niche product in which the traffic is generally pretty low to begin with and 2) it's highly seasonal.

Theoretically, they should look at traffic in November/December (the high season for Nutcracker), but the Google keyword tool only shows you monthly average stats. Everyone should take these stats with a grain of salt -> they very often show 'no search volume', which doesn't mean you shouldn't add the keyword, because: 

1) Based on Google's own stats, ~500 million keywords get their first impression (show for the first time) every day. 

2) It doesn't hurt to have keywords with no traffic, even though the system gives you scary warnings. There is no negative impact of zero traffic on your quality score (the main metric they use to calculate how much you have to pay). 

3) If a user searches for "nutcracker performance" in October because they are an early planner - it's good that you have it on your list already. 

In the absence of clear data in the tool, I basically ignore it and add keywords that I think are relevant to the topic, however I will typically not break out entire ad groups if the tools show no traffic for anything related.

At the end of the day, it is up to your judgment. If you think a set of low traffic keywords is super relevant to your business - add them, put them in specific ad groups, write great ads and then wait and see. There is no disadvantage to doing this, other than managing your time.

If you are looking to prioritize, create the most specific ad groups for areas of keywords that have both the highest traffic and the highest relevancy to your business, then work your way down the list. NEVER combine high traffic words that are peripherally related to each other in the same ad group - ALWAYS give them (plus their plurals and synonyms) their own ad groups. You will need to manage their performance carefully and optimize their ads with extra focus that cannot be achieved in a blobby generic ad group.

If you'd like additional traffic data, you can take a look at Google Trends to get some sense of seasonality and traffic data over time. If you want to play with the Google keyword tool (it can be fun to look for search volume of random words, like 'justin bieber' and it shows you a different view than Google Trends), you can access the tool on the "Tools and Analysis" tab of the AdWords account and then go to "keyword planner" and then choose "get search volume for a list of keywords" and then type in the ones for which you want to review traffic stats. Note that in this interface the back button will take you back to the main account page, not the last page of the tool, which is annoying, and that the ux of this interface changes *constantly*.

And so, in conclusion:

• Make your ad groups as specific as you can.
• Draw the line if there is no traffic on the whole potential ad group, unless you feel strongly otherwise or there is a seasonal reason.
• Think as a user, they don't know your keyword or ad group, all they see is your ad.
• Look at the competition to see what you have to beat on the search results page. Give yourself the structure to be able to beat it, and that means SPECIFIC AD GROUPS!
• Allow yourself the structure in the account to be honest about your sale language. 
• Use tools to make your structuring efficient! AdWords Editor is a MUST.

Good luck! Remember that while it can be mind-numbing to break out specific ad groups, you will be paid back the rewards for your labor indefinitely.

Stay tuned and subscribe for more posts on SEM and many other topics near and dear to the 2014 Digital Marketer's heart!

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