Tiered PPC Bidding Strategy in Google AdWords

When setting up a new ecommerce website, many owners decide that at some point they will need to set-up and launch a Google AdWords campaign, however, doing so is not as easy as adding funds, creating ads and keywords then letting it run.

Over the last 15 years, I have met and had hundreds of conversations with many ecommerce website owners who tell me AdWords does not work, and in fact tell me it is a money pit. When I look into their AdWords campaigns, I can only nod and agree with them as their accounts are indeed configured in such a way that they’re just eating away at any money they put in.

Changing their minds is difficult, after all Google AdWords is available for all to use and anyone can create and set up a campaign, and this is where the problem lies.

AdWords is, for better a word a ‘monster’ but a ‘monster’ that can generate huge revenues for any business, large or small if managed correctly. Google offer a certification programme to individuals and companies. ‘To gain qualification, exam takers must pass both the Advertising Fundamentals exam and one advanced-level exam’.

Without a doubt, if managed correctly Google AdWords is a fantastic advertising platform, if implemented by professionals.

One of the major issues and questions I hear from individuals when they are building out and launching a new PPC campaign is: “what match type should I use?” and the simple answer is; every business is different, what works for one does not work for the other, the answer lies in putting each match type to work.

A little known way of doing this is by implementing a ‘Tiered PPC Bidding Strategy’. This method I have advocated for years, not only to new businesses, but also to established businesses that are already using AdWords.

If you are trying to ensure that you are paying the lowest amount possible per click, you can employ a Tiered Bidding strategy to help ensure you’re not paying more for less. In other words, avoid spending more that you have to on queries that come in at phase match.

When set up properly, using a combination of all match types can help cover the ground needed to drive relevant and high quality traffic to your site and in the long term save you huge amounts of money.

In most cases if you set the same bid amount for an exact match and a phrase match keyword, the phase match will not only cost you more per click, but will also, more than likely, be served more than the exact match keyword. The same pattern will be the same for broad match verses phrase match keywords.

Implementing a tiered bidding strategy will ensure that you pay the lowest Cost per Click (CPC) whenever possible as opposed to the higher amount associated with phase and broad match keywords. Adjusting your bids in such a way will make sure that AdWords serves your lowest match type keyword whenever possible.

Match Types & Your Tiered Bidding Strategy

Let’s begin by looking at each match type, what we want it to cover and how it plays an essential role.

Exact Match

This match type lets a keyword trigger your ad to show only when someone searches for the exact keyword or close variations of the exact keyword you added to your account. When the search query matches up with ad text and landing page, this presents an opportunity to achieve a high quality score.

When applied to a tiered bidding strategy, exact match should be the most utilized match type.

Phrase Match

When implementing a tiered bidding strategy, phrase match keywords can play as a supporting role for keywords, not covered by the exact match. Phrase match allows you to target what we call ‘long-tail’ search queries, while still showing relevant Google ads. Long tail search queries are search queries with multiple words, for example:

• ‘size 10 white Adidas trainers’
• ‘where can i buy adidas trainers’

When setting up a tiered bidding strategy it is important to include your ‘route’ keyword phrases as phrase match keywords. So for example if you sell trainers online, you would benefit from having keywords such as the below on phrase match.

• White Adidas Trainers
• Black Adidas Trainers
• New Adidas Trainers

This is because you likely won’t have the search query "size 10 white Adidas trainers" as an exact match keyword. By adding these as phrase match, a Google ad will still show when these search queries are used.

With all these match types it is essential that that you have relevant ads and relevant landing pages, which will result in a better quality score and result in lower CPCs (Cost per Clicks)

Broad Match and Broad Match Modified (BMM)

This match type has often been seen as a moneymaker for Google and in many cases, a Google Adwords Account Managers worst nightmare. Broad Match and Broad Match Modifier should be used with caution, however when used in a Tiered PPC Bidding Strategy it can help pick up and find unique, long-tail search queries (ones you had not even thought of) that could become very profitable.

Attempting to cover every search query using only exact match is almost impossible.

Using broad match can work by catching all the long-tail search queries that do not match up with the exact and phrase match keywords that you have implemented.

For example

• Exact Match will catch users searching for ”adidas trainers”
• Phrase Match will catch users searching for “size 10 white adidas trainers”
• Broad or Broad Match Modified (BMM) will catch users searching for “size ten white and blue adidas trainers”

This type of search query is quite precise as someone is searching for a specific size and a specific colour of trainers. It is a precise search query, and could well be the users 6th search query; however, it is a search query that is more likely to lead to a conversion/sale.

Tiered Bidding Implementation

If you are serious about implementing a tiered bidding strategy, you will need to set your bids based on match type (it is essential that this be adhered too, otherwise the whole strategy will not work)

For example, you will need to set your bids up in the following way (please note the amount you set for each match type will depend on your budgets and what you are willing to pay per click)

• Exact Match: £10 (highest bid)
• Phrase Match: £8 (second highest bid)
• BMM: £6 (third highest bid)

Explaining why we set it up in such a way is simple:

Your exact match keywords, will more than likely have the highest quality score, providing your account is set up correctly with very tight themed campaigns and ad groups, with very relevant ads that go to highly relevant landing pages.

Your phrase match keywords, will follow suit, with the exception that the quality score should be slightly less due to the lack of relevance for certain search terms, or a lower click through rate (CTR), because ads have been showing for none relevant search queries.

Using a tiered approach allows your exact match keywords to be shown consistently for searches. Phrase and broad match keywords support the exact match keywords and are in place to find and catch search terms that you have not thought of or added yet as an exact match keyword.

Run Search Query Reports

For this strategy to work effectively, as with all PPC campaigns, you have to be patient. You must continue to look for search queries caught by phrase and broad match that come up more often and add them as exact match. You can run a report on a daily, weekly basis to find these search queries. For new campaigns, I would suggest that you run this daily.

Putting a tiered bidding strategy in place is not easy and for many it will involve restructuring accounts so that campaigns and ad groups are tightly themed by relevance, ads created around the theme and landing pages optimised to increase the quality score.

Decrease in the Cost per Acquisition (CPA)

In many accounts where I have implemented a tiered bidding approach, I have seen that in just a few weeks there has been a considerable decrease in cost-per-acquisition.

As search queries matching phrase and broad match keywords were highlighted, paused then added as exact match keywords, there was an increase in quality scores across the account.

Increase in Ad Rank & Position

One specific benefit in improving quality score is that the average ad rank increased, which in many cases means an increase in the overall traffic without the need to increase bids for first page or top page positions. In fact, if you want to keep the same position that your ads were appearing in, you can decrease the CPCs.

Summary

While implementing this approach does not guarantee anything, more often than not it is a great foundation to running a profitable campaign and enables you to find search queries that you hadn’t even thought of and ones that you have overlooked, whilst paying less for more. Ongoing management and bid optimisation will need to be made, but implementing this strategy can help drive search queries to the correct match type and in doing so display the correct ad.

Adjust your bids so that your more restrictive match type safely wins.

Making sure your more restrictive match type wins will be dependent on both your Max CPC and the Quality Score.

As said at the start ‘Google AdWords is for better a word a ‘monster’ but a ‘monster’ that can generate huge revenues for any business large or small if managed correctly’

Tony Bury is an Online Marketing Expert at ekmPowershop.com, the UK's leading hosted eCommerce solution