How To Use The 80/20 Rule For AdWords?

The 80/20 rule

The 80/20 rule or the Pareto Principle, is commonly used to manage businesses, however, it can be used to take critical online marketing decisions. The 80/20 Rule has always been important, not just because it has been named after an economist from Italy, however, because it seems like the most effective way to achieve goals. This rule is also valid for campaign optimization or management. Below, we have listed several ways one can use to apply the 80/20 rule. Following are five ways; anybody can apply immediately and have a quick impact on AdWords campaign performance.

Identify – 20% of locations That Make 80% Conversions

The rate business conversions differ as per the performance of different geographic locations. Hence, this is a great opportunity to encourage the effectiveness of your campaigns, cut off the budget on what does not work and augment you budget for what is working well. In relation to monetize the performance of the locations in your campaigns, you have to log in to Google Analytics and click on Location, Geo and Audiences.

Identify – 20% of the hours of the day that generate 80% of the conversions

Each service or product alters differently at different times of the day. You must focus on your performance by the hour and find the hours which are working the best to maximize your effectiveness. In the dimension tab of AdWords, you can find the performance by hour of the day.

You can also save the same information through Google Analytics in case you want to distribute the traffic by source. This is easy, especially if you wish to know whether people from various sources work differently. Once, you find out your top 20% hours of the day, you can enhance performance in one of two ways:

  • Use bid modifiers to increase your top hours and/or reduce costs in the hours, which don’t work
  • Run a campaign for your best hours and one for the rest of the hours. This will give you both budget and bids flexibility.

This second solution is a bit tricky, taking into consideration that each location might work differently. If you have already built campaigns per location, you would need to create duplicates to run at different hours of the day.

Identify – 20% services or products that generate 80% of conversions

Majority of businesses serve more than one product or service, and each of them funds differently to the monthly turnover. You can optimize campaigns based on the performance reports and look up to what earns the most profit.

Once you have found the 20% of the items, which generate 80% of the sales, you can –

–          Build custom ad groups for the best items and modify the promotional text

–          Run a search campaign on Bing and Google

–          Create Remarketing campaigns both on social media and Google AdWords

 Identify – 20% keywords, which generate 80% of conversions

Everybody is endeavoring to recognize the top performing terms of a campaign to be capable to enhance results. However, just recognizing the terms won’t be sufficient. What makes you different is your way to use these terms.

Start by recognizing two forms of terms –

The 20% of keywords, which produce 80% of the traffic

The 20% of the keywords, which boost 80% of the traffic

Identify – 20% of the time of year, which do 80% of conversions

Majority of businesses do well in particular span of time in every year, which they consider as a high season. Finding out what months make the most conversions is important, especially when it comes to assigning marketing budgets. Assign more budgets during high season and lower the budget for none or low performing days.