Over the last seven to 10 years, paid search has proven to be a cost effective channel for affiliates and performance marketers alike to drive high quality leads while maintaining strong ROI. In fact, search engine marketing (SEM) frequently represents an inordinate portion of a performance marketer’s business – often more than they care to admit.

The decline in effectiveness of other online programs such as email and display has also shifted the balance to SEM. Finally, the portion of overall traffic driven via SEM has surged in the last three to four years as paid search-management systems have freed search marketers from mundane day-to-day manual bidding adjustments and made SEM even more ROI positive and efficient.

While performance marketers seeking to improve their SEM programs have traditionally focused on bid management improvements, is that enough to get ahead in today’s economy? The answer, of course, is a resounding “NO.”

With tightening budgets and diminishing returns, performance marketers need to sharpen their SEM game more than ever. Increasingly today, bid management is only a part of the equation when effectively managing your paid search program.

An advertiser’s position in keyword auctions at Google, Yahoo, and MSN are determined not just by bids, but also quality score (QS). So in order to remain competitive in today’s PPC marketplace, not only do you need sophisticated and automated bidding, but an iron-clad QS management strategy.

The all-important QS, of course, is the constantly-updated rating that Google, Yahoo and MSN assign to your keywords based on their relevance and performance, with high QS keywords being placed higher in search results at a lower cost-per-click (CPC). For the purpose of simplicity, this article will refer only to Google’s quality score process, though tactics can be applied across all publishers.

The increasing importance of the QS, coupled with the large reliance on SEM by affiliates and other performance marketers to drive sales, requires them to build an aggressive management strategy. At the end of the day, a 10 percent increase in QS results nets the same gains as increasing your bid by 10 percent.

Here are just a few of the keys influencing your score: Separate Church and State – Be sure to manage your paid search program separately from your contextual network advertising program. They behave differently, have drastically different quality characteristics and performance results and need to be treated as disparate entities. Contextual network clicks come from those not actively searching for your product, and thus more distant from the sale. Paid search clicks are from active searchers who are further along in their purchase consideration. Therefore, just like church and state, meshing the two together can prove to be highly volatile and lead to campaign chaos down the road.

Size Matters – At least, it does when it comes to campaign structure. It may seem counterintuitive, but in the world of SEM, it’s important to set up and bid on your campaign structure at the finest, most granular level possible. This is because the more detailed the ad group, the more relevant and specific you’re able to be when creating the copy to match that group, and the higher your score will go.

Take, for example, a company generating qualified leads for car dealerships. Rather than structuring their campaigns at the Ford, GM, and BMW level, they should have a separate campaign ad group for “BMW X5 in San Francisco” so that they can create the specific copy and call-to-action accordingly. The tighter the link between user intent, keywords matched and creative, the higher your quality score and ROI.

Mind Subtle Differences – If you accidentally told a fashionista, “what an incredibly lame dress” as opposed to “what an incredible lamé dress,” she might quickly turn away with a scoff instead of thanking you for the compliment. The same is true in the world of keywords. For example, our data show that revenue per conversion on “yard signs” (plural) is drastically higher than revenue per conversion on “yard sign” (singular). Why? Because the purchase intent for the search term, whether plural or singular, is drastically different, so each must be treated as an individual term, rather than broad-matching “yard sign,” which is the traditional catch-all strategy for capturing both the singular and plural forms of each keyword.

It Pays to be Negative and Exact – If you’re an affiliate generating leads for a travel company specializing in outback trips to Australia, and you buy the term “outback,” your ad may show up for anyone searching for the “Outback Steakhouse” or the “Isuzu Outback” car. A best practice is to shift traffic to exact queries with higher click-through-rate (CTR) and conversion rate. The same holds true for liberal usage of negative match. If you’re generating cruise leads, you don’t want to waste valuable clicks on gossip-mongers looking for the latest TomKat news (translation: negative match “Tom” from your keyword “Cruise”). In addition, reviewing raw search query strings regularly can help generate ideas for negatives and limit unwanted impressions.

Banish Low CTR – While no one knows the secret sauce of Google’s full QS algorithm, we know that CTR is a critical contributing factor, and the frequency and position of your sponsored listing appearing is a combination of price, CTR and other scoring factors. Therefore, it’s important to first identify poor-performing CTR ads, and then take it a step further to determine if CTR is being driven down by ineffective copy, lack of relevance to the keywords, or lack of relevance to your brand or product. Once you identify the culprit, you can make the appropriate tweaks as necessary. Never become complacent or satisfied with status quo, and instead constantly strive to refine, test and try new variations.

By following these simple strategies to increase your score, you’ll see immediate and effective results that boost conversion. Not only will you ensure your survival in these tough times, but your paid search campaigns will flourish with a higher score, which at the end of the day means more clicks for less.