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What’s a Keyword Funnel

When you’re deciding what keywords to use for Google Ads, you need to try to find ones which are less competitive. When we talk about less competitive keywords we're talking about the more niche ones which aren't being chased after by every other company that sells the same products or services as you do.

The less competitive keywords tend to have a lower cost per click (CPC) because there are less people bidding on them. And if there are less bidders then, as with any auction, the price won’t get pushed up as far as when there are lots of people bidding.

Admittedly there will be some competitive keywords which you can't avoid using, even if they are expensive, because they closely describe your core products or services. For example, the keyword “insurance broker” is a competitive keyword but it’s one you’ll probably have to bid on if you’re an insurance broker.

But the more of the less competitive keywords you can include in your campaigns, the more you’ll bring down your average cost per click.

Cheaper Clicks & Warmer Prospects

These niche keywords don’t just get you cheaper clicks; they also tend to bring you warmer prospects – i.e. people who are more likely to buy the products or services you're selling.

To illustrate this, let’s consider a real-world example. Imagine you’re working in a high street shop that sells televisions. It’s a quiet time of day and so you’re the only member of staff on the shop floor. Suddenly, two customers walk in at the same time.

One of them says, “Hello, I’d like to buy a television.”

The other customer says, “Hello, I’d like to buy a television. It’s the Samsung 4K 50-inch one with model number RU7100.”

You can only serve one of these two customers, so which one will you choose?

keyword funnel - What’s a Keyword Funnel

Hopefully you'd choose the second one, as he’s the one who appears to be closest to the point of buying something. The first customer is still at the research stage of the buying journey so is less likely to generate you a sale at the moment.

It works the same way online. Generally, speaking, the more specific or niche someone’s search term is, the more likely they are to convert into a sale or a lead.

We're All Going on a Cheap Summer Holiday

What tends to happen online is that people will carry out multiple Google searches before they actually buy something or make an online enquiry. And each time they search, they will use a different search term as they move from the research phase to the purchase phase.

Let’s take holidays as an example. Imagine you’re thinking of booking a holiday and have just opened up Google to start searching. What’s the first search term that comes into your head?

Probably something fairly broad and generic like “cheap holidays”, “last minute holidays”, “cheap flights”, or “hotels”.

Those kind of keywords get massive search volumes. In the UK alone, there are an average of 450,000 searches per month for “cheap holidays”. But the chances of someone being ready to book a holiday at the point when they search for “cheap holidays” are pretty slim. So the conversion rate for “cheap holidays” is going to be tiny (let’s say 0.1%).

What will probably happen is that the person who searches for “cheap holidays” will come back to Google a bit later and search for something a bit more specific such as “holidays in France”. Maybe that keyword only gets 20,000 searches per month, but there's now a 1% chance of conversion.

This process of search refinement might go through several cycles until eventually our fictional holidaymaker knows whereabouts in France they want to go and what kind of accommodation they want. At this point they end up searching for something very specific such as “gite holidays Poitiers”. 

There might only be a 100 searches a month for this, but the chance of conversion could've gone up to 40%.

This process of someone carrying out multiple searches until they reach the point of converting is called the keyword journey or the keyword funnel.

Here's how the keyword funnel might look for our fictional holidaymaker who's decided to rent a gîte in Poitiers.

A keyword funnel example showing how the bottom of the funnel has lower search volumes but higher conversion rates

How To Use the Keyword Funnel to Your Advantage

Now 100 searches per month isn’t very much and, if you were a travel agent using Google Ads and bidding on these kind of bottom-of-the-funnel keywords, you probably couldn’t sustain your business on that. But you don’t need to.

A travel agent is going to have a huge range of different types of holidays in different regions of different countries – each of which will provide some very specific keywords such as the gite holidays one in the example above.

If you bid on lots of these low volume keywords then, once you add them all together, you'll find you can get just as much traffic as if you were to bid on “cheap holidays”. But each of them will have a higher chance of conversion and is likely to cost less per click (due the lower levels of competition from other advertisers).

So as a general rule, particularly for smaller businesses, my advice would be to let the big players like Expedia bid on the research-stage keywords such as “cheap holidays” and save your advertising budget for the keywords nearer the bottom of the funnel.

In other words, you let the big companies spend their advertising budget on educating people about all the good places to go. And then, once someone's decided where they want to go and what kind of holiday they want, you can swoop in at the end and get the business.

If you've got any questions about this post, or if it's given you any new ideas, please leave a comment in the box below.


And if you're interested in learning more about how to set up a Google Ads campaign, check out my free online course.

About the Author David Miles

As a digital marketing consultant, author and trainer, I specialise in helping businesses in the financial services sector use the internet to get more enquiries and increase profits.

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