When dealing with Google AdWords campaigns, advertisers have several options for selecting keywords. PPC expert and Founder of ClickEquations Craig Danuloff talked with me about when to use each one, and provided some advice about getting the most out of your campaign on a limited budget.

Chris Crum: When should advertisers use Exact Match?

CD: First, let me ask a question: If you only sell women’s blue sweaters, do you really want your ads showing up for men’s blue sweaters?  Probably not.  Before we talk about Match Types, it’s important to define some vocabulary I’ll use: keywords and search queries.

Keywords are the words you buy, ex: blue sweater. Search Queries are the words the actual words someone typed that may, depending on your match type, trigger your ad to show up in the search engine, ex: men’s blue sweater.  Match Types are a tool to help you target search queries.

As we talk about in the Match Type Keyword Trap (see our paid search white paper), it’s okay to use the same match types for the same words.  Each step from Exact to Phrase to Broad exposes your ads to a wider audience of less specific search queries.  Some of these queries are relevant and will prove profitable, but many will be irrelevant, or at least low converting.

For example, if you buy “blue sweaters” on phrase match, you could easily pay for the click of someone who searched “men’s blue sweaters” when you only sell women’s. And on Broad Match you almost certainly will pay for clicks from searches that you wouldn’t choose to target – for example ‘blue sweaters’ may be matched to ‘dog sweater’.

So the trick to choosing and using Match Type is to understand that the trade off is between precision and volume. Exact Match will generally deliver less volume but you can be very sure of what those searchers are looking for. This generally means you can pay a lot for those clicks because their interest and your conversion rates should be high.

Conversely, Broad Match will deliver a lot of volume, but the searches will be a mixed bag of on-target, near-target, and off-target topics. You’ll want to pay less for these clicks since so many won’t convert.

There are two possible initial strategies: you could start with only Exact Match keywords, expanding outward with more tests and then moving groups of words that prove very successful as Exact Match down to Phrase and even broad over time. This will control your budget and minimize waste. Or you could start with Broad Match and find patterns to promote to Phrase and even Exact as you see what works. You’ll want to be vigilant about adding negative keywords too when using this method. This strategy will drive more traffic faster, but at a lower return.

CC: When should advertisers use Broad Match?

CD: Broad Match buys you a basket of search queries. Like any grab bag, it will contain some great stuff and some duds. Using Broad Match is a good way to experiment in a category (but keep your bids and budgets low) but as you get serious it’s best if you ‘promote’ winning search queries into their own Phrase Match and Exact Match keywords.

Over the long run, if you actively manage your account think of Broad Match as a research tool whose job is to find you good Phrase and Exact match keyword candidates.

If you have a limited budget, have a low conversion rate or are very new to paid search, then don’t use Broad Match until you’ve got a steady ROI on your Exact and Phrase Match campaigns.

CC: When should advertisers use Phrase Match?

CD: Phrase Match is a way to sweep up a lot of queries and cover the fact that people search in nearly infinite ways. You can’t possibly think of every search query to use in Exact Match, nor is it necessary or reasonable in every case.  Phrase Match opens up a wider audience without as many crazy matches as Broad Match.  Phrase Match is a great type for new campaigns or accounts or when you’re struggling for volume.

There are few key points to using Phrase Match effectively:

- Start with your most profitable products and search queries from successful Exact Match campaigns

- Use phrases that are at least 2 words and preferably 3 or more.

- Build out your negative list as much as you can.  You’ll never think of all possible negatives, but the time spent hear is well worth it.

It’s critical to monitor your search queries closely to find phrases to move into Exact Match ad groups and negatives to add to your list.  Phrase Match is just a net to help with your keyword research.  Profitable or unprofitable search queries shouldn’t linger here long.

CC: When should advertisers use Automatic Matching?

CD: Automatic Match is an even more expanded version of Broad Match and should be used with extreme caution, if at all. The premise of Automatic Match is that Google is offering to figure out how to spend any unused portion of your budget by selecting keywords that you have not chosen and displaying your ads for queries that match those keywords.

Think about this for a second. Optimistically, it’s an automatic traffic and lead generation machine. You don’t do anything, Google just figures your paid search advertising for you. More skeptically, it’s a vendor telling you that they’ll spend your entire budget with absolutely no visibility into how or why, or assurance that results will be anything more than disastrous. Sound appealing?

I would only recommend it with very tight budgets and a very watchful eye on results. Note that you can be opted into Automatic Matching without giving your permission – so check your campaigns carefully to make sure this is turned off unless you really want it on.

CC: What advice would you give to an advertiser on a very limited budget to get the most out of their ppc campaign?

CD: If you haven’t started yet, first see if you can find some coupons for a free $50 – $100 in AdWords credits (Here’s one source).  That way, you can stretch your budget and experiment a bit to learn what works.  Read paid search blogs to learn from other people who’ve managed paid search before.

Focus on your highest margin products that you have in stock first.   Start with a very limited number of campaigns and ad groups.  Focus your text ads and ad groups very tightly around answering the question your targeted searchers are asking.  Build out your negative list extensively to avoid clicks that don’t relate to your product.  I’d suggest that you start with Exact and Phrase match first.  We’ve also had good luck find low cost segments of the market with content network campaigns (just remember to run them in separate campaigns!)

It’s also important to make sure you’re landing pages (where you send paid search visitors after they click your ads) are effective.  A 2% conversion rate instead of a 1% conversion rate can make a huge difference in the profitability of your campaigns.  To learn about web analytics, I recommend you read Occam’s Razor by Avinash Kaushik. To learn about landing page best practices and how to persuade visitors, I recommend you read GrokDotCom by Bryan Eisenberg and the folks at FutureNow.

Wrapping Up

In closing, I just want to thank Craig Danuloff for sharing his wisdom as it relates to PPC advertising. If you’d like to learn more about negative keyword campaigns, Mike McDonald interviewed Ken Jurina of Epiar, who offered some insight at PubCon a while back.