Analyzing keyword profitability isn’t as cut-and-dry as we marketers would like to think it is. That said, there are ways to judge a keyword’s potential profitability, but it involves classifying your keywords into categories.
- Category 1 – Your first keyword category is the low-level keywords that don’t get a lot of click-throughs. Whether we’re talking about PPC advertising or organic search marketing, the keywords in this category historically don’t get click-throughs, however, their conversion rate might be high. In other words, the keywords don’t get a lot of clicks, but when they do they convert them into sales.
- Category 2 – The second category of keywords is the category that gets lots of clicks and only a few conversions. This is a very unprofitable category because you are spending money on those clicks and not getting much of a return on them.
- Category 3 - This is your blockbuster category. These keywords get tons of click-throughs and have a high conversion rate.
So what do you do with these categories of keywords? The first thing you should do is stop using the Category 2 keywords. They are costing you money. The other two categories of keywords may or may not be making you money. That depends on the cost of acquisition per customer.
Categorizing your keywords this way will allow you to eliminate unprofitable keywords early and fast while tweaking your paid and organic search marketing campaigns to improve the profitability on the remaining keywords.