If you are like most advertisers, cost per acquisition (CPA) is a key element in determining paid search success. The lower the CPA, the better the perceived performance. As a result, unprofitable keywords often get paused if they rack up spend without delivering cost-efficient conversions. CPA, however, isn’t always indicative of success. To position a paid search account for growth, here are a few situations where it makes sense for you to bid on unprofitable keywords:
1. Competitive Conquesting
People in market for a new TV have plenty of choices – LCD, LED, Plasma, and 3D, among others. You will have a harder time convincing people searching for “plasma TV” to purchase an LED TV. However, that doesn’t mean you should exclude “plasma TV” from your keyword list. Instead, you should create ad copy and landing page content focused on reasons to choose LED TVs over plasma TVs. Ad copy such as “Looking for a plasma TV? Find out why LED is the better option!” may entice the customer to click through to your site and learn about various differences between the two products. After reading about improved picture quality, clarity in all positions, and advanced backlighting, the customer might start to question their decision to buy a plasma TV. Even if they don’t convert, you might have prevented that person from buying a plasma TV from a competitor and prompted them to continue researching their options. If they decide to buy an LED TV instead, your RLSA and Remarketing campaigns will be ready to bring them back to your site.
2. Longer Buying Cycles
For products with longer sales cycles, it is essential to create touchpoints at various stages of the customer journey. When choosing a college, for example, high school students and their parents could take several years before making a decision to enroll. If a potential student clicked on a PPC ad, downloaded enrollment info, and came back to the site a year later to submit an application, the PPC ad wouldn’t get credit and CPA would look higher than it actually is. In situations like these, a non-converting click early in the cycle could prove to be very valuable when the potential customer is ready to make a purchase.
3. Increasing Brand Awareness and Value
Similar to longer buying cycles, sometimes it makes sense to bid on keywords for the simple goal of creating awareness and establishing your brand as a thought leader. If your company sells power tools, hand tools, and other home improvement supplies, you should bid on keywords such as “how to build a house” or “home makeover ideas” to reach potential customers early in the cycle. You can leverage these keywords to build credibility and increase brand awareness, but only if you provide helpful content. This involves creating landing pages or downloadable content to help answer the customer’s current questions. They might not need a new drill or hand saw at the moment, but they will be familiar with your brand and products when they do need those items. For limited budgets, this might not always be a viable option. Should additional budget become available, however, this is a great opportunity to utilize unprofitable keywords in a way that will drive leads and value further down the funnel.
The advice given above shouldn’t trump your common sense and industry knowledge. More often than not, unprofitable keywords drive up costs and hurt performance. However, there will always be exceptions that warrant a higher CPA for keywords depending on your goals and the customer’s position in the purchase funnel. Instead of focusing on CPA, some keywords should be used to differentiate your product or service, reach people early in the buying cycle, and increase brand awareness & thought leadership.