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When to Cut the Long Tail

Posted By Richard Conn On January 4, 2012 @ 8:06 am In Featured,SEM | 12 Comments

The long tail has been a cornerstone of search engine marketing strategy since Chris Anderson first introduced the term in 2004. The underlying idea is that high-volume head terms tend to be fiercely contested, which raises CPCs, reduces ROI, and prices advertisers out of the market. So instead of competing for limited space on a crowded page, marketers should focus on long tail terms that have low search volume, but are highly specific, relatively cheap, and collectively deliver a significant amount of clicks. This line of thinking has led many SEM marketers to aggressively expand their keyword set. SEM tool providers have gotten in on the act as well, using automated scripts to add long tail terms on an industrial scale. But is this effort really worth it? What is the right number of keywords for an account?

To answer these questions, marketers need to dig deep into their data to identify how their keywords are actually distributed. As a first step, I recommend pulling a keyword performance report for the last twelve months and then using a PivotTable to organize the data into a usable format.

[1]

 

My preferred method is to drag the Conversions into the Row Labels box and the Keywords and Cost into the Values box. Your Keywords will likely default to ‘Sum of Keywords’, so just click the dropdown arrow on the ‘Sum of Keywords’ menu, select ‘Value Field Settings’, and choose ‘Count’.

Once you’ve organized your PivotTable, sum the data based on the number of conversions to give yourself a sense of the distribution of head, torso, and tail terms. So what does this data tell you? Let’s look at a few examples.

 

 

[2]In the table to the left, the advertiser has about 90,000 keywords in their account. They have a very long tail, but it is not delivering conversions. Over 93% of these keywords have had zero conversions in the past twelve months. Not good, but at least these non-converting keywords only accounted for about 14% of spend.

 

[3]In this next example, the situation is more severe. Not only are 94% of keywords non-performing, but over 40% of the SEM spend was being wasted. What’s more surprising, the average non-performing keyword spent less than $5 per month.

 

This is a perverse version of the long tail; each of these keywords doesn’t generate enough volume to raise alarms, but collectively, the negative impact of these low-volume keywords is huge. This highlights the inherent tradeoff between granularity and transparency. The more volume that is derived from the long tail, the less data is available for managing each keyword. Taken to the extreme, conversion data can become nothing more than a series of 1s and 0s. By reducing the number of keywords, you can consolidate data into fewer elements, allowing for better decision making.

Based on this advertiser’s data, I aggressively cut back on the long-tail and paused all keywords that have had no conversions in the past twelve months. The result? ROI increased 5x, which freed up budget to reinvest in growing volume on performing terms.

The long tail can be a great source of efficient traffic and every account should have a healthy balance of head, torso, and tail terms, but marketers need to exercise caution. Here are a few steps to help better manage your campaigns:

  • Periodically measure your campaigns to see how your keyword volume is distributed.
  • Use caution with automated keyword expansion tools. No keyword should be added simply because someone searched on the term. Set criteria such as a minimum number of impressions or conversions before adding keywords to your account.
  • When the tail starts wagging the dog, it’s time to cut. Consider pausing out non-performing long tail terms (even those with very little spend). If it hasn’t converted in a year, you probably don’t need it in your account.


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[4] The Pareto Ad Spend Rules: http://www.thesearchagents.com/2010/07/the-pareto-ad-spend-rules/

[5] Top 10 Coconut Headphone Moments in SEM: http://www.thesearchagents.com/2009/07/top-10-coconut-headphone-moments-in-sem/

[6] New White Paper Analyzes Impact of Google Instant on SEM and SEO: http://www.thesearchagents.com/2010/09/new-white-paper-analyzes-impact-of-google-instant-on-sem-and-seo/

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