The savvy search marketer always explores tail terms to improve overall performance. If done right, tail terms can convert better than the head and can also be cheaper in terms of Cost Per Click (CPC). Hence, effective tail management lifts the performance of the overall campaign.

When exploring the tail, marketers are always faced with the dilemma of risk and reward. Bidding on underexposed keywords aggressively might bring in a lot of conversions and uncover gems in your campaign. However, you could also end up spending a lot without any conversions. The question then is how to identify potential candidates while mitigating risk.

The most effective way of managing the tail is to use an algorithmic approach where you can use a finite mixture and confidence models. This is a technology-based approach that scales very well and has done very well for the clients I manage. However, if you are a small advertiser without access to sophisticated technology you are probably looking for a simpler heuristic method.

Consider a campaign of 10k+ keywords as shown above. Among these, you have enough data to determine if the keywords are good or bad for 1,470 of them. These are high confidence keywords where we know exactly what to expect. However, the majority of these, 8,908 to be exact, are lower confidence keywords where we do not have enough data. Of those, 3,000 plus keywords have seen page one and, hence, have been given a chance. However, 5,797 keywords have not seen page one and, therefore, are potential gems. Marketers should focus on these keywords.

However, here comes the risk part. If many of these keywords are already bid over the average campaign CPC (here $1.07), then bidding them higher would increase your risk. You should focus on the low bid keywords as they have not been exposed and have a lower risk potential. These keywords (marked in red) are your best learning opportunity. In these keywords, several of them have not even seen an impression. So, in a sense, these keywords should preferentially be bid up and monitored. Once the low bid, low position keywords have been exposed, you can move to the next tail opportunities such as low bid-higher position and high bid-low position keywords.

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