Should you ever pause an Ad Group / Keyword?

You will face this scenario day in day out. You have 100s of ad groups, most of them are converting at a good conversion ratio but there are some ad groups which have a lower conversion ratio. What should you do in this case. We are assuming in this post that you have a good campaign structure with single keyword ad groups

Ad groups are completely irrelevant

Some of the ad groups can fall into this category, these keywords are not at all relevant to your business but are in your account because it is a long tail keyword. lets take an example of apple trying to sell their iphones through their website. They created a campaign for the keyword iphone and found out all long tail keywords and create separate ad groups for them. Pretty soon they realize that a lot of ad groups are related to iphone repair which is not something they provide. In these cases it is best to pause these ad groups

Ad groups are relevant but less converting

Lets say this advertiser also sees keywords which are related to their product but are converting at a lower ratio. Let us say there is a keyword cheap iphone site which has a conversion ratio of 2% where as the good keywords have a conversion ratio of 5%. What should you do in this case

Never ever pause keywords which are less converting but related to your product. Instead reduce the max cpc such that the ratio between avg cpc of lower and higher converting keywords are in the same ratio as their conversion ratio.

In the example
avg cpc of low intent keyword / avg cpc of high intent keyword = conv ratio of low intent keyword / conv ratio of high converting keyword
which translates to avg cpc of low intent keyword / avg cpc of high intent keyword = 2/5 = 40%. If the avg cpc of high converting keyword is 10, then the avg cpc of low intent keyword should be 4. This strategy helps advertisers to get conversions from all their keywords at same cost per conversion. here the tricky thing is to figure out the max cpc to bid where you can achieve the target avg cpc. As a good approximation you can assume max cpc and avg cpc of different keywords are same and make necessary calculations.

This strategy is also called rule based bid optimization which tells you when to increase or decrease bids