Don’t forget to check out part one (keyword selection), part two (keyword traffic estimation), part three (ad creation), part four (ad testing), part five (bidding strategy) and part six (ad budgeting and targeting).
Now that you have your pay-per-click (PPC) campaign optimized and ready to go, there’s one more crucial element to PPC advertising that you must setup before starting your campaign – measurement.
The great thing about a PPC campaign is that it’s very easy to determine the ROI of your campaign with free tools provided by Google, you just need to use them. It all starts with linking your AdWords and Analytics accounts.
Once your accounts are linked, here are some of the basics of measuring the effectiveness your campaign.
The simplest way to determine the effectiveness of your PPC campaign is simply by measuring a conversion through Google Analytics. So, what exactly defines a conversion? Google leaves that very much up to the user.
The most straightforward conversion type is an online sale. If a user buys your product, you can track this transaction by adding a piece of tracking code to a page that a visitor sees after filling out the form, such as a “thank you page.”
Similarly, a conversion can be tracked for a form submission such as a contact or quote request form. In this case, rather than a sale, you received the contact details of a potential prospect for your company.
Another type of conversion may be as simple as a web visitor viewing a particular page on your site, such as a distributor locator. Even though you may not have directly received the person’s contact details or order, they took an action on your site that you consider valuable, so this can also be classified as a conversion if you would like.
After you have setup your conversion parameters, it is very easy to see in your dashboard just how much one conversion costs via your PPC campaign. You can use this data to determine ROI on your campaign.
For instance, if you have an e-commerce site and one of your conversions results in $50 in revenue for your business, but your average cost-per-conversion is $25, you can quickly determine the cost-effectiveness of your campaign.
In the case of leads that come in through the site, you can also create a calculation to determine the effectiveness of your campaign. If your average sale is $1,000 and your lead close rate is 50%, then your average lead would be worth about $500 to your company. In this scenario, a company with a cost-per-conversion of $100 should be happy to continue their PPC campaign because based on average sale and close rates, a lead at that price would be very valuable.
Quality of Visit
In some cases, a PPC campaign might not be solely about conversions, but building brand awareness in the marketplace around a few particular keywords. So, if a conversion isn’t necessarily your target, how can you measure the effectiveness of your campaign?
One way is using Google Analytics to judge the quality of traffic that your campaign is receiving. There are several stats that can give you insight into quality of visit:
- Bounce Rate: A bounce is defined as a visitor that left your site or closed out their browser without taking an additional action on your site. A bounce is very unlikely to have been a quality visit. The lower the bounce rate, the better your campaign is performing. Try to identify particular keywords that are resulting in high bounce rates and determine if these words should remain in your campaign.
- Avg. Duration of Visit and Pages/Visit: A low bounce rate combined with high numbers in these variables could mean that you are attracting the right target audience with your ads as they are very engaged with your site.
- New Visit: Has the visitor been to your site before? A low new visit percentage can indicate that your visitors are already familiar with your company and if your goal is to bring in new prospects to your site, you may be missing the mark in terms of your keyword selections.