Judging PPC Performance: Focus on Conversions
PROFITABLE PPC By David Szetela, Search Engine Watch, Sep 29, 2008
Columns | Contact David | Biography
Last week, when I discussed PPC bidding strategies, I promised to start a discussion about how and when to make decisions about your PPC campaign's keyword and ad performance.
But first, it's worthwhile to emphasize an important point: almost every action you take to improve your PPC ad campaign should be based on conversion data.
Many PPC newbies neglect to set up conversions tracking, and base their assumptions about campaign performance on the number of impressions and clicks, on ad position, and on CTR.
Wrong, wrong, wrong.
Those metrics are useful to gauge a campaign's ability to drive traffic to your site -- and especially the ability for a particular ad to attract clicks. But they tell nothing about your campaign's ability to drive sales or leads.
Tracking and reporting on conversion data, and fine-tuning a PPC campaign's performance based on that, sets PPC advertising apart from other advertising channels that have no such built-in abilities.
Here's how you should view the most important metrics regarding your campaigns:
The number of impressions indicates how often your ad is displayed, and is a measure of the number and effectiveness of the keywords in your campaign.
The number of clicks and the CTR indicates how well your ad is working to convince those viewing the ad that your site/offer corresponds well to the intent of their search.
The number of conversions and the conversion rate indicates how well your keywords, ads and landing pages are working together to convince PPC-driven site visitors to take the action that is the objective of your site -- usually sales or leads.
Since conversion data is necessary for you to judge how well your PPC campaign is working -- to decide whether you've chosen the right keywords, written compelling ad copy, adjusted your bids to obtain maximum ROI, and designed your landing pages correctly -- it's essential that you set up your site with conversion tracking.
Doing so is a one-time operation that's simple, fast and free -- you simply paste a chunk of JavaScript code into a "Thank You" page on your site. That's the page that site visitors see just after taking the desired action -- immediately after finishing a purchase, or submitting a lead form.
Google, Yahoo and Microsoft supply clear instructions for accomplishing this, so I won't describe the process here. Google's especially-clear instructions can be downloaded in PDF form here.
Side note: if your in-house or outsourced web design folks tell you that setting up conversion tracking is hard/expensive/time-consuming: get a second opinion. Fast.
Second side note: be sure to test conversion tracking after setting it up -- and test it periodically to make sure it's still working. Though the setup is straightforward, tiny mistakes, like leaving off a JavaScript line or punctuation mark, can render tracking inoperable. And pay close attention to whether your Thank You page is a secure one (with a URL prefixed by https://) -- if so, a different version of the conversion code must be used.
Third side note: many PPC advertisers need to know and report data that is difficult or impossible to obtain via the conversion tracking described above. For example, for many eCommerce advertisers, knowing the number of conversions (sales transactions) is insufficient; they need to know the exact revenue from each conversion in order to determine their PPC campaign's effectiveness (profitability).
Fortunately doing so is straightforward -- measuring exact revenue is the forte of most web site analytics packages. One fine example is free: Google Analytics. For AdWords advertisers, Google Analytics is automatically "tied" to their PPC campaigns, and can be easily set up to track revenue per transaction -- start here to see how. Google Analytics (and other web site analytics packages) also show you a wealth of information that will help you optimize your PPC campaigns -- like data regarding how many shoppers are leaving your site before completing a shopping transaction.
Next Monday, I'll resume the description of how and when you should adjust keyword and ad group bid prices. As usual, let me know your comments and questions via the feedback form below.
Listen to David sharing his PPC tips in a live Search Engine Watch Webcast, "Profitable PPC: The Fundamental Secrets," on October 22, 2008.
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Biography
PPC Advertising expert David Szetela founded Clix Marketing in 2003, following a 25-year career in technology sales and marketing. He is active in the Search Engine Marketing Professional Organization (SEMPO) and was the author of two lessons in SEMPO's Advanced Search Advertising course. He is a regular speaker at PPC Summit, MarketingSherpa and SES events, and his weekly radio show, PPC Rockstars, is broadcast every Monday at 4 PM EDT on Webmasterradio.fm.
Article Archives by David Szetela:
» Judging PPC Performance: Focus on Conversions - September 29, 2008
» PPC Bidding Strategies: Prudence vs. Aggressiveness - September 22, 2008
» Show Me the Money: Bidding for Profitability - September 15, 2008
» Killer PPC Ads: The Final Word - September 8, 2008
» Killer PPC Ads: The Fundamentals - August 25, 2008
» Tightly-Themed Ad Groups: The PPC Pro Advantage - August 18, 2008
» More Articles by David Szetela
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