When it comes to local PPC, less is more.
More specifically, fewer ad groups are better than a lot of ad groups. The reason for this is because your daily budgets are smaller with local campaigns. When structuring your ad accounts, you’ll want to keep this important idea in mind.
By running fewer ad groups with a local campaign, you’ll see two main benefits:
- You get the most out of your smaller budget by letting your best ad groups do the work
- You give your long-tail keywords a chance to shine.
The SKAG Myth
Now, I know this is a controversial statement; it cuts across the grain of the most commonly held PPC beliefs. Nearly all experts will tell you that Single Keyword Ad Groups (SKAGs) are the way to go—that breaking down your keywords into as many ad groups as possible is the best practice when it comes to structuring a PPC campaign. It makes your keywords more relevant to your ad copy, gets you a better click-through-rate and a better quality score with Google, and you pay less for clicks. In short, it’s the bee’s knees. To do anything otherwise would be sacrilege.
But after running PPC campaigns for 4+ years for all kinds of businesses—printing shops, tutoring services, carpet cleaning businesses, estate sales, IT companies, your local barber, and everything in between—if I’ve learned anything, it’s that what works in theory and what works in practice are often two very different things.
When it comes down to it, the “best practices” we know today are flawed because they are based on national campaigns with massive budgets. What these practices miss is that you can’t treat local campaigns the same way you would a national campaign.
But talk is cheap—when it comes to PPC, it’s all about the numbers. So, what story do the numbers tell us about these two approaches?
Benefit #1: Let Your Best Ad Group Do the Work
Case Study: The Local Print Shop
Years back, we worked with a large printing & shipping chain. They wanted to run campaigns for a wide multitude of printing services—banner printing, brochure printing, flyer printing, business card printing, yard sign printing, vinyl printing, and so on and so forth. So, we built a PPC campaign template which designated ad groups not only for each of these services, but for all the relevant ways a user could search for them. In essence, this was the SKAG approach.
Using their flyer printing service as an example, we broke down the keywords into the following ad groups:
- Flyer Printing Company
- Flyer Printing Near Me
- Flyer Printing Service
- Flyer Printing Shop
Using this same approach for all of their services, we wound up with a massive campaign. When it was all said and done, we had a total of 95 ad groups! We ran 40 campaigns in all, each for a different local market, using small budgets that varied between $150 – $300. We let the campaigns run for a while and collected as much data as we could. Months later, we used the data to make a brand-wide optimization.
What did we find?
Only a small handful of ad groups got any real traction. We had 15 ad groups average anywhere from ~150 impressions to 6000 impressions, 31 ad groups range from 10-100 impressions, and 49 ad groups average fewer than 10 impressions.
The ad groups for more general searches like “printing near me” and “printing services” generated the most impressions. Meanwhile, the more specific search terms, like “large format printing company,” fell to the wayside, and averaged half an impression across all of our locations. This is because the more commonly searched keywords received all the clicks and ate up all of our smaller daily budgets, leaving the less popular ad groups with no chance to be seen.
So, we took these ad groups and consolidated them. Semantically, we were able to synthesize them into 38 ad groups. But this was still entirely too many ad groups for a local campaign with a small budget. So, we took this a step further, and broke it down to which ad groups received the most leads across all the campaigns:
|Ad Group||Leads||Cost per Lead|
|Printing Near Me||71||$37.47|
|Business Card Printing||33||$21.91|
|Yard Sign Printing||23||$27.99|
In the 3 months after making this change, we saw the following results:
- Our Cost-per-Lead dropped from $23.35 to $12.65
- Each location received 9 more leads on average,
- Our Lead-Through-Rate jumped 6%. This means that if a user landed on their site, they were 6% more likely to convert to a lead.
So, our client got more total leads and paid less for each lead they received. When operating on smaller margins like printing products, cutting this cost per lead amount was crucial for a good marketing ROI.
The conclusion here is that local campaigns are all about being selective with which ad groups you want to show using your limited budget: You want to pick the best ad groups and let them shine. By selecting only 12 ad groups to run on our small budgets, we only showed ads for the best keywords—the ones that converted into leads.
Benefit #2: Give Your Long-Tail Keywords a Chance to Shine
Case Study: The Local Tutor
We had a similar situation with a local tutoring client. They offered all kinds of tutoring services – SAT prep, ACT prep, math tutoring, reading and writing tutoring, chemistry, physics, and more.
Taking their ACT Prep service as an example, we used the traditional SKAG approach, and broke down this service into the following ad groups:
- ACT Prep
- ACT Prep Class
- ACT Prep Class Near Me
- ACT Prep Course
- ACT Prep Course Near Me
- ACT Prep Near Me
After months of running these campaigns, the results were nowhere near where we wanted them to be. So, we took a similar approach to our local print shop client and tried consolidating the ad groups. The 6 ad groups above were consolidated into one, overarching ad group for “ACT Prep.” After doing the math (without the tutoring help), we found a rather interesting effect.
In the new campaign, the more specific, long-tail keywords, like “act prep class near me”, “act prep course,” and “act prep course near me” received a lot more clicks and impressions than before. In the SKAG campaign, they received 0 clicks and hardly any impressions at all.
So, what is happening here?
It all comes down to the daily budget.
In this case, the ad group for the root query, “ACT Prep,” was eating up the spend every day, so the more detailed, long-tail keywords in their own ad groups, like “ACT Prep Near Me,” were not getting any traction. However, by grouping all these keywords together in one ad group, the long-tail keywords now stood a chance to shine. They started getting clicks and impressions. They started converting into leads. And this was something we did not only with their ACT services, but with every tutoring service they offered, up and down the campaign.
So, what were the results?
|New Campaign LTR||Jun||Jul||Aug||Sep||Oct||Nov||Dec||Jan||Avg.|
We saw a 5.2% increase in the Lead-Through-Rate for the two campaigns we tested vs. the other 7 campaigns we had running. This means that when someone landed upon our client’s website through our ads, they were 5% more likely to become a lead with the new structure vs. the SKAG structure. In essence, giving these long-tail keywords a shot was worth it in the end.
It may not seem like a lot, but if your business has a high margin for its services—in this case, the tutoring services can amount to thousands of dollars per year—you can really see an effect on your ROI. If 1000 people click on your ad, and 5% more of them turn into leads, you could potentially turn these 50 prospects into thousands in revenue.
The “Science” of PPC
If we learned anything in this “trench” of digital marketing, it’s that what works in theory and what works in practice are very different things. We listened to all the expert advice, and it ended up steering us in the wrong direction. And this is the point I want to nail home: at its core, PPC is not an exact science. The crucial thing to remember is that every campaign is unique, and every business will need its own tailoring. We are constantly learning new things about what the “best practice” is with PPC. It’s an ever-changing target. We started with the commonly held belief that SKAGs were best. But, after looking at the data, we found this wasn’t the case.
If there’s one thing you take away from this article, let it be this: local campaigns with small budgets have to be treated differently than larger campaigns with larger budgets. Even more so for us, our software needed the most data points available to make the smartest bidding decisions possible, so the effect on performance was even more pronounced. And while this may be the best practice today, it may not be the best practice tomorrow. All we can do is listen to the story the numbers tell us, and try to make the best decisions possible based on the data.