What is A Grouping Strategy?
A Grouping Strategy is an advertising and marketing method used for compiling, organizing, and testing various “paths” that ultimately lead to an advertiser’s website(s). There are 5 things we should think about when planning our grouping strategy: Keyword>Matching Strategy>Creative>Landing Page>Conversion
Each part of the grouping strategy must be constantly tested to ensure optimal optimization. The first part of this chain is hidden here. It's actually what comes before the keyword that provides the insight.
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What is the intention of a user who searches with that keyword?
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Can a different intention be inferred from users using that same keyword across various search engines?
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Should we show a person with a different intention a differently worded ad?
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Use a different matching strategy?
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Bring them to a different landing page?
What’s the Impact on Paid Search?
Grouping Strategy has an impact on both paid search and display advertising campaigns, but the clearest way to understand grouping strategy is to start by envisioning a Paid Search campaign. You can do this by going to your favorite search engine, typing in a keyword or phrase, and then going to the search engine results page (or SERPs). You will see there is a constant battle going on as marketers fight, not so much for the top of the page, but for overall brand supremacy.
All brands know that each paid position has a predictable CTR (click through rate). Their bid cost, in general, will be higher for top positions but can be lowered through factors like Quality Score (QS). Quality Score is a variable used by search engines like Google, Yahoo!, and Bing that can influence both the rank and cost per click (CPC) of advertisements.
Keyword > Matching Strategy
Apart from position and cost-per-click for that position, the marketer has to decide which matching strategy to apply to each keyword: Broad Match, Phrase Match or Exact Match.
Typically, marketers test each keyword with each matching strategy at each position to learn which combination converts most efficiently as well as which one scales best.
You might be thinking, “why not simply always bid for positions number 1-3?” This is because the possible inventory usually exceeds the marketer's budget; the game is about maximizing the impact of their budget. It's about optimizing and scaling.
By the way, the more targeted the advertising, the more expensive yet smaller the inventory will be.
What’s the Impact on Display?
Now, let's consider how grouping impacts display. We think we are simplifying the game by pre-determining the exact content and demo target and now all we have to do is worry about which creative to serve them.
But, let's look at the entire group:
The User's Intention > Choice of Creative > Served on a particular device > at that time > with that geo-target > landing page> Conversion path to desired action.
With all of those moving parts, how sure can we be that the correct target is M 34—39; HHI over $150k, interested in finance, etc…with the ad served when the content is relevant (contextual targeting) or irrelevant (Behavioral Targeting)? Even if we worked out the perfect grouping strategy recipe on a different site or network, can we be so sure it would convert that way again on a different platform we are testing?
If we guess wrong on the target or guess wrong on being too tightly targeted, we miss learning what is just outside of our bulls-eye. Maybe the next outer ring would convert better? Or have a higher AOV (average order value) or higher LTV (lifetime value)?
[Call for Comments] Please share your questions or comments about ad targeting below.
