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Paid Search Success Metrics by Length of Keyword

Most folks with paid search experience understand the “anatomy” of an account:  the head consists of broader, more general terms that offer great volume, while the tail consists of specific, narrower terms that offer great conversion.  If we assume that keyword length is an imperfect-but-still-worthy proxy for the specificity of a phrase, then we’d expect to see a mathematically positive relationship between keyword length and conversion.  Intrigued by this notion, I dug into RKG data to see what relationships are playing out for our clients. Methodology I began with a sample of our clients, determined the linear correlation between conversion rate and length of phrase, then tested that correlation for statistical significance using the t-test for correlation.  I performed these tests within each client separately – since the distributions of conversion rates and keyword lengths are unique to each client, such differences would cloud my results if not accounted for. Results The results surprised me at first, but, upon further reflection, make perfect sense.  For the great majority of clients, I found the correlation between keyword length and conversion to be positive and weak, but statistically significant. A positive correlation signifies that the two variables move in the same direction together, so in this case, longer phrases are associated with larger conversion rates, while shorter phrases are associated with smaller conversion rates.  The absolute value of the correlation measures how dependent or independent the two variables are.  A correlation of 0% means that the two variables are truly independent, while a correlation of 100% (or -100%) means the variables are completely dependent.  Lastly, statistical significance is a stamp of approval to say “this conclusion was not the result of random noise in data, but instead reveals a true, underlying pattern”. The correlations ranged between 1 and 7%, indicating a positive relationship as I posited, but on a much weaker scale than I imagined.  Correlation between 1 and 7% means that there is some dependence between keyword length and conversion, but that it’s at a minor level.  However minor, though, the correlations were statistically significant (at alpha =0.05 for those who like the details!), so the dependence really is there. The fact that the correlations are somewhat weak is far less surprising when we consider all the other factors that contribute to conversion rate:  selection of products, price competitiveness, site navigability, appropriateness of landing page, and on and on.  Put in this context, it makes sense that specificity of phrase (as approximated with keyword length) is a contributing factor to conversion, but not a major one. It’s also important to point out here that I sliced the data by engine, by match type, and by advertiser brand/non-brand.  I found that only non-brand terms on broad match exhibited significance, and that held true in both engines.  Brand terms and exact match terms did not display statistical significance, and thus for these terms we can’t be confident that there exists a real dependence between keyword length and conversion. A Second Analysis These conclusions were interesting enough to prod me to dig further.  Although paid search marketers are arguably less able to influence average order value (AOV) than we are conversion, it’s still an important component of success.  Conversion rates coupled with AOV determine the value of a click, so I thought it worthy of a correlation test all its own. For the great majority of clients this time, I found correlations that were significant, relatively strong, and negative.  In this case, negative really means indirect – so in this case, longer phrases are associated with smaller AOVs while shorter phrases are associated with higher AOVs.  It also turned out that AOV was significantly correlated with keyword length for more than just non-brand keywords on broad match – brand keywords on broad match were significantly correlated too, as were brand keywords on exact match on Google only. For the non-brand keywords, correlation rose to 15%, and for the brand keywords on broad match, correlation shot up to 20-30%.  I think the rationale behind these results is that more specific (and thus longer) keywords tend to refer to a singular product, or at least a narrower scope of products.  The user searching on this type of phrase, for example “Merrell whiteout 8 waterproof boots”,  is likely looking to buy only that product, whereas a user searching on a shorter, more general phrase, for example “Merrell”, is more likely to appreciate Merrell shoes in general, and thus offers a better chance of buying multiple pairs. Also keep in mind here that I calculated correlations and significance within each client, so the negative relationship between keyword length and AOV does not imply that on average, "Macy's" has a higher AOV than "Bloomingdale's", but that "Macy's" has a higher AOV than "Macy's cocktail dresses". Conclusion Although this study shows that longer keywords tend to have higher conversion rates and shorter keywords tend to have higher AOVs, it would be dangerous to rely on keyword length to be the main driver for either of these metrics.  It all comes back to the cardinal rule of statistics: correlation does not imply causation.  That is, longer keywords in and of themselves don’t boost conversion, but rather both length of keyword and conversion are related to the “lurking variable”, specificity. So if you’re looking to add some high-converting terms, don’t think long, think specific.  And vice versa – if you’re looking to add some high-AOV terms, don’t think short, think broad (but still relevant!).  If you do that, then the underlying relationships between keyword length and conversion or AOV should naturally follow.
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