Adobe reported that Google's product listing ads (PLAs) accounted for 17 percent of total paid search spending in mid-December 2012, while other reports indicate that some retailers are spending up to 30 percent of their search budgets on PLAs. Despite these increasing investments, many marketers overlook fundamental strategies for optimizing their PLA campaigns – strategies that they would consider integral to any AdWords campaign.
A prime example is the gross underutilization of negative keywords in PLA campaigns. Let's examine similarities between keyword and PLA campaigns in addition to why negative keywords are absolutely necessary to maximize PLA campaign performance.
Similarities Between Keyword and PLA Campaigns
In keyword campaigns, you have three match types you can associate with a given keyword: exact match, phrase match and broad match. Each serves a different purpose:
- Exact Match: You want to market to users whose queries match identically to the keyword (e.g., "red dress").
- Phrase Match: You want to market to users whose queries contain the keyword phrase (e.g., "bright red dress" or "red dress size 6").
- Broad Match: You want to market to users who whose queries are related to the keyword, and you are allowing the search engine to determine which queries are "related".
The same keyword on exact, phrase, and broad match can be envisioned as concentric circles. Only one query will match with an exact match keyword; more queries will match the same keyword on phrase match; even more queries will match on the keyword on broad match.
Broad match maximizes exposure for the advertiser with the least amount of effort, but broad match keywords can lead to many unqualified clicks and higher average cost per acquisition (CPA), because:
- Search engines aren't perfect: Queries they determine are "related" to your broad match keyword may in fact not be sufficiently related. For example, let's say you only sell children's ballet slippers, and you bid on the keyword "children's ballet slippers" on broad match. A search engine might match this keyword with the query "adult ballet slippers," given that 2 out of 3 terms match. A click on your ad would be wasted CPC.
- Search engines are paid by click, not by conversion: As such, they have an interest to drive as many clicks to your ads. Whether or not those clicks result in conversions is a risk that you bear.
Why Negative Keywords are Absolutely Necessary
To manage the risk associated with broad match keywords, search marketers deploy negative keywords. Many marketers deploy broad match keywords to "discover" good versus bad queries. Queries that convert are promoted to exact and phrase match while queries that do not convert (but drive a lot of click cost) are added to a negative keyword list.
The important things to understand are, in your PLA campaign:
- Every one of your product targets behaves like a broad match keyword, and
- The more products in your product target, the broader the match and less control you have.
In a keyword campaign, if you were prohibited from using exact and phrase match keywords and could only use broad match keywords, you would spend much more time and energy managing your negative keywords.
Your PLA campaign is like a keyword campaign that only uses broad match. Because of this, you need to spend a disproportionate amount of time managing negative keywords. The more product targets you have in your PLA campaign, the more negative keywords you need.
Without negative keywords, your campaign can spiral out of control in one of several ways:
- You match too many queries, consumers don't click on your ad, and the quality score of your products (derived from CTR) plummets.
- You match to too many queries, driving up unqualified clicks that don't convert, and your total spend and/or average CPA balloons.
- You can't increase bids to grow your campaign, because your PLA campaign starts generating too many unqualified clicks.
- Google "tipping" effects: Google starts showing a product that has a better click-through rate than comparable products but worse conversion. The more Google shows the product, the higher the Quality Score grows, and pretty soon, only one of your products in a category is getting impressions. This too leads to a higher CPA.
The following use cases demonstrate some of the most common situations requiring negative keywords.
Example 1: Avoid Non-Converting Queries
Assume you sell shoes. You have a whole line of basketball shoes, and some of the most popular ones are Nike Kobe 8 shoes.
Consumers are often searching for the next generation of a product (e.g., Nike Kobe 9; Apple iPhone 5s), and you discover that you're getting a lot of clicks but no conversions for the query "kobe nines". That's because Google is showing your Kobe 8 basketball shoes to consumers who are really looking for information on the release date of the Kobe 9s:
To avoid having your product shown to these users, you should add the negative exact match keyword "kobe nines" to each of your Nike Kobe 8 shoes.
Example 2: Funneling Traffic to More Suitable Products
Imagine you sell 1.7 oz, 2.5 oz, and 4.2 oz bottles of Armani Code cologne. If your 4.2 oz bottle is shown side-by-side with your competitor's 1.7 oz bottles, this will make your product look 2x more expensive, like in this actual PLA screenshot:
By taking the various feature differences between your products – such as "large" for the 1.7 oz product target and "small" for the 4.2oz – and entering them as negative keywords, you're driving traffic to the product that is most in line with the customers intent and therefore most likely to lead to a conversion. The negative keywords enable you to ensure Google picks the right product for the right user query.
As PLA spend continues to capture more of the total paid search pie, marketers must use every tool at their disposal to maximize return on spend. Negative keywords should be a strategic imperative for any retailer, especially those with thousands of products/product targets in their PLA campaign.