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Tiered PPC Bidding Strategy Rectified

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Yesterday Justin Freid posted an article on Search Engine Watch, How to Implement a Tiered PPC Bidding Strategy. While I agree with Justin’s premise that you should be bidding on all three match types, I don’t believe he has the approach correct.

In Paid Search, as in other advertising channels, Marketers strive for control – if I decrease the bid on keyword X, I can expect impressions, clicks and cost to decline. Unless you have each keyword + match type in their own campaign, with the keywords from the lower level match type as a negative keyword, you don’t have that control – impressions will migrate from one keyword to another.

Keywords are proxies for queries. If you simply have the same keyword in all three match types, then all three match types will qualify for an exact match query. Which keyword will get the impression is dependent upon its bid and quality score, i.e. which keyword will make the most money for the Search Engine.

If you lower the bid for the exact match keyword because the ROAS wasn’t where it needed to be, those impressions could migrate to the phrase match version. The additional impressions to the phrase match keyword may in turn lower its ROAS. If you then lower the bid on the phrase match keyword, you now may no longer qualify for queries that had been providing a good return.

For maximum control, you need the match types segmented by campaign, with the keywords in the more specific match type as a negative keyword. For example:

Campaign

AdGroup

Keyword

Match Type

Negative Keyword

Negative Match Type

Shoes-Exact

Nike

Black Nike Shoes

Exact

Shoes-Exact

Nike

Red Nike Shoes

Exact

Shoes-Exact

Nike

New Nike Shoes

Exact

Shoes-Phrase

Nike

Black Nike Shoes

Phrase

Shoes-Phrase

Nike

Red Nike Shoes

Phrase

Shoes-Phrase

Nike

New Nike Shoes

Phrase

Shoes-Phrase

Nike

Black Nike Shoes

Exact

Shoes-Phrase

Nike

Red Nike Shoes

Exact

Shoes-Phrase

Nike

New Nike Shoes

Exact

Shoes-Broad

Nike

Black Nike Shoes

Broad

Shoes-Broad

Nike

Red Nike Shoes

Broad

Shoes-Broad

Nike

New Nike Shoes

Broad

Shoes-Broad

Nike

Black Nike Shoes

Phrase

Shoes-Broad

Nike

Red Nike Shoes

Phrase

Shoes-Broad

Nike

New Nike Shoes

Phrase

Only with this approach, can you effectively control your costs and optimize your campaigns. The bid I put on the exact match version of Black Nike Shoes, will only affect impressions for Black Nike Shoes queries. If the query is Discounted Black Nike Shoes, then the phrase match version’s bid will determine the impression share. If the query is Nike Black Shoes, than the broad match version’s bid will determine the impression share.

As the campaign progresses, you review the search terms that triggered impressions for the phrase and broad match versions and where appropriate, add them to all three campaigns:

Campaign

AdGroup

Keyword

Match Type

Negative Keyword

Negative Match Type

Shoes-Exact

Nike

Discounted Black Nike Shoes

Exact

Shoes-Phrase

Nike

Discounted Black Nike Shoes

Phrase

Discounted Black Nike Shoes

Exact

Shoes-Broad

Nike

Discounted Black Nike Shoes

Broad

Discounted Black Nike Shoes

Phrase

With this approach, you don’t tier your bidding based upon match type, you bid based upon the keyword + match type performance.

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