Is your AdWords account feeling bloated? Uncomfortably overloaded? Increasingly taking over your precious time, money and energy?

Note: This post from the Google Advertiser Community is best suited to users already comfortable with managing AdWords accounts. For intro lessons to online advertising, click here.

As an AdWords Management consultant, I review many AdWords accounts and one of the most common symptoms I encounter is the use of too many keywords.

Many advertisers assume they need to include keywords that will cover every search term that might be relevant to their product or service. This isn't just the concept of "long-tail" keywords, but an attempt to draw people in who may only be peripherally interested in the product by using words that aren’t directly related to the core business. In most cases there is the potential for a conversion to occur for these terms, but the reality is those conversions hardly ever happen. We're not talking small numbers here; many of these accounts contain tens or even hundreds of thousands of keywords.

Recently I came across a great analogy for this common AdWords phenomenon. The Pareto Principle, named after its proposer, Vilfredo Pareto (1848-1923), suggests that approximately 80% of the effect comes from 20% of the causes. Pareto first suggested this correlation when he observed that in Italy, 80% of income was generated by just 20% of the population. This principle can be applied to almost any large data set including those in the AdWords keywords universe.

So what does the Pareto Principle have to do with keywords?

Let’s take a real life example. One account I reviewed last year contained more than 3.3 million active keywords. Anyone is likely to suggest that's too many, but consider in the 12 months prior to my review, only 41,000 of those keywords resulted in a conversion of any kind. That’s a lowly 1.2% conversion rate. In effect, that company probably could have paused 98.8% of all their keywords and made the same income. These figures are so extreme they're not even really a good fit for the Pareto Principle, but I find that generally speaking the idea behind this principle holds true:
Where an account contains a large number of keywords, it’s probable you’ll find a low percentage of those keywords are responsible for the majority of the income generated.

Is your AdWords account bloated with unnecessary keywords?

Here are the problems associated with running an account where most of the keywords do not appear to be contributing to the cause:
  • Cost: Obviously if the 80% of non-converting keywords are receiving clicks, that's money down the drain. If that were the case, the ROAS (Return on Advertising Spend) could be five times what it is currently. Of course, in reality, the 20% of successful keywords would probably be responsible for a larger proportion of the spend, but reducing any spend on the 80% is an opportunity for improvement in ROAS. 
  • Time: Time is money and managing AdWords takes time. The more words you have the more time your campaigns take to manage. Even large scale tools like Scripts, an AdWords procedure automation tool, will require a lot of work to manage large keyword counts and for very large counts the cost of developing automated solutions could be substantial. 
  • Flexibility: When AdWords accounts are fit and lean, they are easier to work with for experiments and short-term promotions. It's easier to keep track of changes and analyse their effects, easier to adapt targeting for locations, devices and demographics, create short-term promotions and ad changes, etc. 
  • Adapting to change: We all know the AdWords program itself can change and some of those changes require user action. If the account is efficient, those changes may be trivial, if it is bloated and unmanageable, a large change to operation could require weeks or months of additional work. 
The only real "upside" to such large keyword numbers is the opportunity for "assists", which is the practice of using related keywords to support your primary keywords. It may be that some keywords do not convert frequently but do assist frequently, and it’s important to check for such situations.
However, I'd bet those assists will still be trivial compared to the 80% that convert directly.

How do you review an AdWords account for the percentage of converting keywords?

  1. Log into the account and ensure only enabled campaigns, ad groups and keywords are selected, then click the keywords tab. 
  2. Select a good long date range - at least 6 months. Make a note of the total number of keywords (rows) - look at the bottom right of the screen. 
  3. Create a new filter, and choose Conversions >= 1 (or another filter, depending upon the relevant measurement of success). Apply this filter and make a note of the new number of rows. 
  4. Divide the second number by the first, and multiply by 100 and that's the percentage of keywords that have converted in within the specified time period. 
Whatever figure is revealed, consider what it means and play with the filters. It may be that the account has a lot of keywords that have converted just once, with a much smaller number that have converted more than 10 times, so spend some time examining various options.

What do I do if I find 80% of my keywords are not converting?

One option is to pause the non-converting keywords and assess the effect this has on the campaign. Before pausing these keywords, it’s important to ensure there have a way back to the previous state, and the capability to measure the effect closely for a trial period after the change. So don't do it on a Friday afternoon and then go on holiday for two weeks...

Alternatively, use Labels to label each keyword, Ad Group and Campaign paused (bear in mind that pausing all these keywords may cause some Ad Groups to have no enabled keywords, and possibly some Campaigns to have no "enabled" Ad Groups). The Label can then be used to recover all these elements and re-enable them if the experiment fails. It could be useful to create several Labels; one for those that should definitely be paused, another for those where it’s more ambiguous whether they should be paused, and another for those with assists, etc.

Run this analysis on your AdWords account, and if it turns out only 20% of the keywords are creating 80% of conversions, trial my suggested solutions and assess the results.

Remember: when it comes to keywords, often less is more, and quality always wins over quantity.

Continue learning with our free 'Get the most from your keywords' lesson on the Digital Garage.