Increase Profits By Using Negative Keywords

September 18, 2008

I have been testing several campaigns on the Big Three PPC networks over the past few months. The competition has become tougher and it requires high bids to show our ads on the first page. In general, my success ratio for campaigns fall under the 80/20 rule where only 20% of the campaigns are profitable.

I have wondered what could be the benchmark for a good ROI (Return On Investment) and after several inquiries with experts, I have figured that – between 80% and 100% – is a good ROI for affiliate marketers in PPC campaigns. For example, you spend $100 for ppc ads and your revenue on that campaign is between $180 and $200, then you are running a good profitable campaign. Some campaigns may have extremely higher levels of ROI, but for a benchmark – to evaluate a campaign for its success would be 80% to 100% ROI.

A few days back, I tested a campaign for one week and I glanced the analytical data. The campaign was producing an ROI of 65%. According to my ROI benchmark, it was down by at least 15% – but, I was unable to trash the campaign as a failed one because it was on the profitable side. I was looking for ways to increase my ROI at least to the 80% level.

The options before me were

  1. Write a better PPC Ad, get a better CTR and reduce the PPC Cost
  2. Create a better Landing Page to increase conversions

I did both of the above and after four days – I was able to push up the ROI, but only upto 70%. I was too confused whether to continue the campaign or just junk it. I browsed all the analytical data I had on this campaign and one spark of an idea struck me when I was looking at the keyword stats.

I was using all three variations – exact, phrase and broad matches – for every keyword on this campaign. The phrase match & broad match keywords were producing low conversions. I figured out and listed all the words that were in addition to my keyword in those matches that were producing low conversions or nil conversions. I entered all these words – 12 in number – into my negative keyword list on the ppc campaign.

What a dramatic turn?!

After four days, my ROI reached 100%. Although the impressions reduced, the clicks and CTR was up for the campaign. It was a dream come true for me on this particular campaign and I am happy that I have discovered a new technique to increase profits by using negative keywords effectively. This was possible only because I had an analytical system to track all data related to the campaigns.

If you are an affiliate marketer, I strongly suggest you to keep an analytical system in place and am sure that – it could give you new ideas to increase your profits by cutting unproductive costs.