Google Adwords Keyword Effectiveness Index

(by Greg Carter)
When I want to price my pay-per-click fees “just right”, I’ve found a KEI extremely helpful in gauging how much competition there is for that phrase. I use WordTracker to do the job, along with some basic spreadsheet calculations. This allows me to identify key phrases ranging from”too hot” with lots of competition, too basement bargain “long-tails”, a term coined by Chris Anderson of <a href=””>Wired Magazine</a>.

To summarize Chris’s definition, the longtail defines a term that is not searched for very often and is virtually unique to your business, so that when it is queried in a search, your site will get the hit and convert at a very high rate. Below is a KEI exercised that I’ve used to find the keyword sweet spot (shown in green). These phrases convert at about 1.5% without and meet my budget. The KEI percent is Searches/Sites Containing your keyword or phrase.

So lets say you sell tennis racquets. If the number of searches done is 10, and the number of sites is 100, the KEI is 10%. Not bad. But wouldn’t you love it if the number of competitor sites containing you phrase is 50? Now there’s a better deal — a KEI of 20%. By the way, keyword searches are quickly being replaced by phrases due to searches becoming more knowledgable on how search works combined with the fact that they want more specific results returned among a sea of search results.

Finding the right balance of competition optimizes Advertising Spend: The "Sweetspot" = Searches/Sites.

Finding the right balance of competition optimizes Advertising Spend: The “Sweetspot” = Searches/Sites.

The KEI analysis I performed above shows key phrases I obtained using a keyword expansion tool to perform the KEI analysis prior to PPC bidding. Note the actionable item recommending that we make a concerted effort to optimize the site for the key phrases in pink to eventually be indexed in the search engines for the “hot” phrases in order not to pay for these popular and expensive keywords. PPC is good for a quick shot to get listed, but you don’t want to have to pay for the long haul.

So get working on those “Just Right” phrases !


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