Red Flags: Inefficient keywords

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Why is it important?

Next to “negative keywords list”, this is the second test concerned with optimizing search campaigns on Google Ads. In this case, the app scans all search campaigns and analyzes the performance of keywords over the last 30 days in order to identify so-called inefficient keywords. As the name suggests, the idea is that removing these keywords from campaigns might improve performance.

A keyword is said to be inefficient if one of the following two statements describe their performance:

  • 0 conversions, and spend higher than 4 * AOV. Even if one purchase happens, at most 25% of total spent would be accounted for.
  • More than one conversion, but CAC higher than 4 times AOV. These are keywords which drew in customers, but not in sufficiently high numbers to justify cost. 

Still, these keywords might still be very relevant to your business, so removing them would have an overall negative effect. The solution to the “inefficiency” problem would also need to account for this. In that case, we can think of previously mentioned keywords as not being represented correctly and try to fix this by creating specific ad groups for them, with new ad text which might be a better fit. Another idea is to try and create more appropriate landing pages. A third option would be to consider placing them as negative keywords. Due to high cost, these keywords should at least be monitored closely.

What if the test fails?

The app searches for previously defined inefficient keywords, and if any are found, they are reported. Once identified, they can be placed in a different campaign and associated with different ad text, or landing page. Another option is to use them as negative keywords, depending on how relevant they are to your business.

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