A Practical Guide To Leveraging The Long Tail For SEM

Today: Tools from Google AdWords and Yahoo Search Marketing that may not be news to everyone, but are definitely worth a second look. An in-depth guide to understanding the principles of The Long Tail and the practical application of it in SEM, followed up by the free read of the week.

Google AdWords: daily budget tool

I noticed something new recently inside AdWords that didn’t get much press… For years, the system has alerted you if campaigns in an account have been reaching their daily budget caps consistently and suggesting recommended budget levels to ensure full impression delivery throughout the day. In the past month, a new and much more robust tool, called the Daily Budget Analysis has replaced the basic two sentence budget recommendation and this feature has some really cool aspects to it.

Based on historical data, the tool shows a graph of the past fifteen days in your account, and lets you use a slider control to see how many impressions you could have gotten and what the estimated spend/CPC/clicks would have been at those budget levels.

Google AdWords Daily Budget Suggestion Tool

Yahoo Search Marketing: check out archived webinars

Need more training for yourself or help getting one of your colleagues ramped up on the Yahoo Search Marketing platform? Check out their archived webinar page for some great on-demand training. There is a note to check the current help section for specifics as it’s very probable that some parts of the webinars will become outdated eventually, but here are some of the available titles:

• Getting Started with Yahoo! Search Marketing
• How to Create Successful Campaigns
• How to Create Successful Keywords and Ads
• How to Improve Ad Quality
• Keyword Tips and Best Practices

As well, the slides from the power points are downloadable so there’s some great material in there to fill your agency presentations.

In depth: The Long Tail and SEM, four years later

Four years ago, Chris Anderson, editor of WIRED magazine, wrote an article that would become one of the most referenced theories in New Media: The Long Tail. Although the groundwork had been laid by other researchers in decades preceding (see the Wikipedia article for a more in depth history), Anderson’s article and subsequent books on this topic have been applied to many business models in both the online and offline worlds.

For those of you who have been under a rock for the last four years, The Long Tail refers to the reoccurring appearance of a long, drawn out tail section in graphs that rank popularity for an applicable data set.  Anderson’s article used an example of a business strategy that a company like Amazon.com may employ,  whose sales of many low-selling niche titles could equal or surpass the sales of blockbuster books which sold well, but totaled a relatively a small number of titles.

The Long Tail is a variation of the 80/20 rule (called the Pareto principle) which businesspeople have used for years as a rule of thumb; “20% of your products generate 80% of your revenue” or “20% of your customers account for 80% of your sales”. To further underscore this point, I also read recently that 25% of Amazon’s sales come from titles not carried in the average bookstore (of 40,000 titles).

Search Marketers have adopted the Long Tail as a way of segmenting their keyword lists. When an account’s keyword list is graphed with the vertical axis being search volume, there are normally three distinct sections:

• The Short Head – very high volume keywords, normally generic terms.
• The Fat Middle – medium volume keywords, that are usually a variety of terms.
• The Long Tail – the “niche” keywords such as specific products, SKUs, concatenated phrases, etc.

So, how does a search marketer best attack these three segments?

The Short Head

In just about every search account I’ve ever analyzed, there’s usually a short list of these high volume terms. Many times, it is the brand name of the company or name of the site. As well, these words are the keystones of your vertical. Terms that come to mind would be “computer”, “car”, “mortgage”, etc. Short Head words are generally expensive (other than branded head terms) as many other advertisers are bidding on these terms because they are the no-brainers when it comes to generating keyword lists. For example, “car” could be bid on by car manufacturers, auto dealers, NASCAR, automobile magazines, car museums, auto parts stores, etc.

Because there is significant volume on these terms, there are a lot of opportunities. To start, head terms should definitely be split into their own campaigns. I’ve even created campaigns with a single keyword in them when it made sense. With upwards of 50%-80% of your traffic on these words, it’s important to treat each other these terms with the same care as you would a full ad group in your account.

You should definitely understand how each term spends/converts during the day for dayparting opportunities. As well, geotargeting to the highest converting areas may make sense as an optimization strategy if you are reaching your daily budget caps each day. It’s also very important to keep a close eye on competitors in your head terms space. Using a tool like Ad Gooroo to track these terms to identify when new, aggressive bidders appear so you can react accordingly could be absolutely crucial to the effectiveness of your account.

The Long Tail

Tail terms are really where the fun is at with SEM! You may only have twenty head terms, but you can have millions and millions of tail terms. A good example of tail terms would be every title at Amazon or every product model number at a retail store. You can also take your core keyword list and concatenate it with word modifiers to come up with combinations such as “best car to buy” or “top rated cars in America”. You can use a tool like Keyword Lizard to quickly combine keyword lists.

But there’s good news and bad news. The good news is that tail terms tend to be a lot less expensive to buy because the competition is lower. Take the head term example above of “car”. The moment you add “car parts for ’69 Chevy” you have just eliminated a huge portion of competitors that are bidding on your term. As well, tail terms also tend to be more relevant to the user so you generally get high click-thru rates and higher conversion rates as well.

The bad news is that the volume on these individual terms are low so you actually need to not only brainstorm a big tail term keyword list, but you have to manage it as well. The sweat cost on changing bids, optimizing, and reporting even just ten thousand tail terms vs. twenty head terms is tremendous. That’s why my main recommendation for dealing with tail terms is to make sure you use a bid management tool with cost-per-conversion and position preference rules. You have to bring in some technology to handle the burden.

Of course, to uncover great gems with tail terms that convert is the goal. However, my favorite tail term strategy is to “round out” the numbers from the head and middle keywords with low cost, highly engaged traffic. For example, at the end of a campaign with 10,000 clicks at a $5 AVG CPC on the top terms, it’s great to have added in another 10,000 tail term clicks for $1 each. That averages out to three dollars per click and really helps final cost per conversion numbers.

The Fat Middle

Anderson’s first dives into this theory didn’t include the fat middle but it has emerged as the buffer zone between the head and tail with terms that have medium volume and engagement. Following our “car” example, I would say “buy car”, “car loan”, etc would be good examples of these terms. The Fat Middle is where the SEM pro can really shine. These are terms that could be undiscovered by other advertisers so the competition isn’t high so top rankings might be relatively inexpensive to achieve. Also, by adding words like “buy”, “rent”, etc, the middle terms are still generic enough to reach new users, but specific enough to match their intent, thereby bringing in more qualified traffic. The Fat Middle should not be ignored and could justify a huge portion of your attention and resources.

In summary, the most strategic way to use the The Long Tail methodology is to find the best synergy between the three groups. Use head terms to reach users at the beginning stages of the buying cycle and funnel them down through middle terms so that you drive up the volume on your inexpensive, high converting tail terms. In this fashion, you can always have a good mix of keywords in your account that are focused on both branding and direct response.

Free read of the week: The Long Tail article that started it all

Chris Anderson first presented his long tail ideas in a WIRED magazine article in October 2004. Below is the first part of the article, but I highly recommend that you read the entire article on WIRED and Chris’s first book, The Long Tail, Why the Future of Business is Selling Less of More, to better understand the long tail.

The Long Tail
Forget squeezing millions from a few megahits at the top of the charts. The future of entertainment is in the millions of niche markets at the shallow end of the bitstream.
By Chris Anderson

In 1988, a British mountain climber named Joe Simpson wrote a book called Touching the Void, a harrowing account of near death in the Peruvian Andes. It got good reviews but, only a modest success, it was soon forgotten. Then, a decade later, a strange thing happened. Jon Krakauer wrote Into Thin Air, another book about a mountain-climbing tragedy, which became a publishing sensation. Suddenly Touching the Void started to sell again.

Random House rushed out a new edition to keep up with demand. Booksellers began to promote it next to their Into Thin Air displays, and sales rose further. A revised paperback edition, which came out in January, spent 14 weeks on the New York Times bestseller list. That same month, IFC Films released a docudrama of the story to critical acclaim. Now Touching the Void outsells Into Thin Air more than two to one.

What happened? In short, Amazon.com recommendations. The online bookseller’s software noted patterns in buying behavior and suggested that readers who liked Into Thin Air would also like Touching the Void. People took the suggestion, agreed wholeheartedly, wrote rhapsodic reviews. More sales, more algorithm-fueled recommendations, and the positive feedback loop kicked in.

Keep reading the article at its WIRED archived page here.

Josh Dreller is the Director of Media Technology for Fuor Digital, an agency concentrated in the research, planning, buying and stewardship of digital media marketing campaigns. Josh can be reached at [email protected]. The In The Trenches column appears Fridays at Search Engine Land.