Need Validation - My Optimization Strategy

I am optimizing a large campaign and would appreciate a second opinion.

[shoffy]

Hi Everyone,

I'm optimizing a large campaign and would appreciate your thoughts on my approach. They are a DVD retailer.

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KNOWN
+ Client can't be profitable with CPC over $0.20
+ Client has been using only broad match (but 7+ QS) for years
+ 50% of products aren't being advertised

TACTICS
+ Import product catalog into AdWords
+ Delete all phrases < 6 QS (QS 5 = $0.30 CPC for them)
+ Tweak broad matches to more specific matches while maintaining 7+ QS
+ Begin tweaks with the most expensive AdGroups and work my way down

GOAL
+ New products included to add new potential for revenue
+ Average QS score of 7+

EXPECTED OUTCOME
With additional products, improved quality score, and more specific broad matches... revenue and cost should improve.

Thoughs?

[buckworks]

You don't mention negative keywords ... what kind of research has been done in that direction?

A good negative keyword list can sometimes make a big difference to the productivity of campaigns that use a lot of broad match or phrase match.

Spend some time reviewing your query reports in detail, and also using a good keyword research tool. The goal is to identify searches that have some vocabulary overlap with terms you're bidding on but are not actually on target. The more of those you can weed out, the better.

[LucidSW]

+ Client can't be profitable with CPC over $0.20
Try to increase the conversion rate. Maybe adding "free shipping orders over $20" or some other incentive or guarantee.

+ Client has been using only broad match (but 7+ QS) for years
Not advisable. Use some phrase and exact matches. I'm sure you know that. Take a look at the search query report, you may find some gems in there, including negatives. But longer tailed keywords and using phrase and exact reduces the need for negatives.

+ 50% of products aren't being advertised
Why? Even obscure movies will get searched. If you're the only one advertising or few others do, I think you stand a good chance to convert.

+ Delete all phrases < 6 QS (QS 5 = $0.30 CPC for them)
Determine why QS is that low. A better ad can increase it and lower costs.

Yeah, improve QS, be more specific with keywords, conversions should improve and costs go down. Result: more sales, better ROI, more profit.