According to Overture, 42% of all e-commerce transactions originate with a query at a search engine. As of February 2004, 19% of prospective buyers searched with one word only, 32% were with 2 words, 26% were with 3 words, 13% were with 4 words, and 10% were with 5 words. This means that 49% of searches are for 3 words or more and 81% of all users search for more than one keyword. Of interest is the fact that 55% of all keyword buys were for 2 word search terms according to Overture.

Overture receives 500 million unique search terms on their network and 450 million search terms have no bidders. The most successful advertisers bid on between 5,000 and 1 million search keywords and phrases.

Did you also know that click through rates increase significantly as the search includes more and more words? The click through rates for a one-word keyword phrase is 1%, 2.51% for 2 words, 2.75% for 3 words, 4.75% for 4 words and 7.06% for 5 words.

What does this mean? You should be optimizing your pay per click campaigns by expanding your keywords and phrases that you bid on. A very effective technique is to mix and match the words and phrases in your current campaigns. There are many other tricks to increase your keywords, such as adding words like "online" and "buy" to your existing keywords or phrases. If there is a direct match for a 4 or 5 word phrase, you’re probably selling exactly what your prospective buyer is seeking. With this in mind, it makes more sense to bid on many multiple word phrases that get a “precision match” as opposed to paying more per click for broader one and two word keyword phrases. Focus on increasing keyword phrases by thinking of all variations of your brand, your products, your company name and your URL.

Make sure your listings link directly to the products you are hoping to rank for. For example, if you bid on the term “Panasonic H67YT” you should have the landing page be the product detail page for the Panasonic H67YT as opposed to sending them to your home page and forcing the customer to perform an internal search for that product. Without landing pages, buyers are likely to click on the link, do not see the relevant item, click back on their browser and then go to the next search result on the list. The last thing you want is to do is pay for the click only to have the prospect never even see the page they were looking to find. Users overwhelmingly prefer a specific page to a more general page. Make it easy for prospective customers to find you and your products, and your online sales will escalate.

Whether you are running a pay per click campaign through Overture or Google, one constant holds true: businesses should base their bids on their own business metrics, not based upon their competitor’s bids. It is difficult not to fall into the trap of a bidding war, but businesses that focus on their return on investment will ultimately be around for the long haul. Google and Overture are totally different animals and while there is some cross-over, there are also tricks for each that can help optimiize spending on each.

Google gives advertisers the option of specifying matching criteria for keywords ranging from broad match to exact match. Often times, an exact match is more valuable than a broad match to the advertiser. Once you have defined your list of keywords, consider entering the keyword list as two separate campaigns. With one campaign, select broad matching, but specify a low maximum cost per click. With the other campaign, specify exact matching and specify a higher maximum cost per click. You will probably notice that your exact matching campaign has a higher click through rate, but fewer impressions than your broad match campaign. Google also has a negative keyword concept. Unless you are in the business of giving things away, you might want to add negative words such as “free” and “cheap.”

Copy is also of paramount importance when setting up campaigns. Savvy advertisers will test different copy to see what yields the best result. Whether you are advertising on Google or Overture, both companies recommend putting the search keywords into both the title and content of the ad, which are then bolded when that search term is queried. As you can imagine, this can be very time consuming. Fortunately, Google has a trick which allows ad titles to dynamically change based upon the search phrase. While we aren’t at liberty to disclose the trick here, feel free to email nexus@nexternal.com to learn more.

With Google, advertisers are very limited in the amount of copy that they can place on the ad. As an advertiser, you don’t have very much room to say a lot, so pretend that you are writing for the National Enquirer – grab your audience’s attention with very few words. Consider capitalizing the first letter of every word in the title and copy. With Overture, advertisers are given significantly more characters to work with. Ads that are tailored, clear, and factual yield the most clicks.

The international market currently represents a tremendous opportunity. There are fewer advertisers paying less money per click in the foreign markets. If you sell products internationally and want to use Overture, you will need to setup a separate Overture account for every country (check the upper right corner of the Overture homepage). Again, this is time consuming, but can be well worth your time if you have success shipping your products overseas. With Google, you can specify where your ads are displayed by country for each campaign. This is very convenient. If you don’t ship internationally, certainly don’t display your ads in these markets since the clicks are of no value to you.

With the holidays approaching quickly, now is the time to fine-tune your advertising expenditures. Increasing targeted unique visitors to your site is going to increase your online revenue which can make for a very happy holiday.

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