I was talking with a Google Account Manager when he asked me: "If you had a web site that sold shoes, which search key word would be more important...shoes or Nike Pegasus?" Interesting question, isn't it? While shoes is a more general term, Nike Pegasus focuses on a specific product a seasoned Googler (Yahoo'er, MSN'er) would enter. While Internet shoppers become more sophisticated and technology continues to evolve...the answer will most always depend on the ROI of each Ad word across a specified period of time, e.g. December 2006.
For our fictitious web site, let's assume we averaged 850,000 unique visitors per month. Out of those 850,000 visitors, 3% convert by buying purchasing shoes for at least $50 per pair, $1,275,000. Now let's apply the statistics for the key word "Shoes" during December 2006:
- Drove 1,000,000 unique visitors to the site during 12/2006.
- 45% of those visitors where 1st time visitors = 450,000
- 5% purchase conversion rate at $75 each = $3,750,000
- Cost per click = $.60 > $3,750,000 - $600,000 = $3,150,000 profit.
- 30% conversion rate for registering new accounts = 300,000
Results for "Nike Pegasus:"
- Drove 200,000 unique visitors to the site during 12/2006
- 55% of those visitors where new to the site = 110,000
- 8% purchase conversion rate at $120 each = $1,920,000
- Cost per click = $.50 > $1,920,000 - $100,000 = $1,820,000
- 40% converted by registering for new accounts = 80,000
Although "shoes" is a more generic keyword that "Nike Pegasus," its PPC is 20% greater due to its popular demand by the marketplace. "Shoes" drove more monthly unique visitors to our site than any other month for all of 2006 and earned $1,330,000 more in profit than "Nike Pegasus." Not bad, right? But check this out...The overall KPI conversion rates for Nike Pegasus is actually greater than the conversion rates for shoes. In other words, while "Nike Pegasus" drove less traffic and profit to our site than "shoes," its conversion rates as a percentage were actually higher! A greater amount of visitors per keyword spent more money per purchase and registered for new accounts.
I'd appreciate your feedback. What action can we take with this data? What should we tell our fictitious client to do next? Spend more on specific terms or generic terms? I know this depends on the business goals. I'm actually dealing with this in my real life job...generic terms driving more traffic but generating less conversion rates as a percentage. When I brought this up with my client, they mentioned that driving a visitor to the site was considered a KPI, not just converting. I hope I inspired creative thought.