The following excerpt is from Perry Marshall, Mike Rhodes and Bryan Todd’s book Ultimate Guide to Google AdWords. Buy it now from Amazon | Barnes & Noble | iTunes | IndieBound
The 80/20 Rule, aka the Pareto Principle, says:
- 80 percent of what you get comes from 20 percent of that you do: small effort, big reward.
- 20 percent of what you get comes from the other 80 percent that you do: Big effort, small reward.
80/20 applies to just about everything you can measure in a business. Sources of incoming phone calls, sizes of commissions for salespeople, sizes of customers, physical location of customers, popularity of products and quantity of each type of product defect can all benefit from applying the 80/20 principle. And yes, AdWords stuff too: keywords, impressions, ads, conversions and visits to web pages.
This means four-fifths of everything is trivial and only one-fifth really matters. This is a huge time saver. But, that’s only the tip of the iceberg. Let’s look at how 80/20 works specifically in Google AdWords.
First, it’s important to note that the numbers “80” and “20” aren’t carved in stone. Sometimes it’s 70/30, sometimes 60/40, 90/10 or 99/1. Keyword lists are very consistently 95/5. Since five percent of your keywords generate 95 percent of your traffic, you can optimize five percent of your keywords by peeling them out and sticking each one into its own unique ad group.
You get 95 percent of the optimization by doing five percent of the work!
“Peel and stick” is the single most important AdWords skill next to split testing. That’s because it allows you to happily ignore up to 95 percent of the stuff in your ad campaigns!
This isn’t only true at the keyword level. It’s also true at the campaign level. 80/20 also describes:
- How many clicks your ads get in each of the 11 ad positions on Google search (the top three premium spots get 80…
