If you’re handling your own PPC with AdWords or Bing Ads, hats off to you! It’s not an easy undertaking. However, it’s certainly doable once you become more familiar with industry vocabulary and best practices. Learning the right terminology and approach can take time, though. One common stumbling block, even for experienced DIYers, has to do with metrics. Oftentimes, business owners are focusing on the wrong PPC metrics and therefore aren’t getting the most out of their campaigns.
Look Beyond Traffic-Based Metrics
At the end of the day, what’s the goal of your PPC campaign? Our guess: profit. For this reason, our first suggestion is to stop focusing so much on traffic-based metrics. These metrics are all that’s included in the simplified AdWords dashboard, which is why so many business owners don’t look beyond them. These include:
- CTR (click-through rate)
- Average CPC (cost per click)
To be clear, it’s not wrong to look at these metrics—it’s just limiting to your overall understanding of your campaign. These traffic-based metrics only tell you how often your ads are being viewed and/or clicked. And while traffic is definitely something you want to pay attention to—after all, you need people to see your ads in order to interact with them—it doesn’t paint a full picture of how well your campaign is actually doing. Maybe you’re not getting a ton of clicks on a certain campaign, but if you’re getting a lot of paying customers out of it, who cares? That brings us to what you should be focusing on.
Track Your Ads’ Conversion Rates
When you want to measure how well your ads are performing, look at the conversion rate. This is the only way to tell whether your campaigns are actually helping your business make money. It’s one thing for people to click on them, but that’s not enough: you also need to be converting those clicks into leads. Clicks alone aren’t going to help your business grow (unless, of course, your only goal is to create brand awareness). You can set up conversion tracking on Google AdWords and Bing Ads yourself. Then, just sit back and check the reports as they develop. Conversion tracking will show you the following metrics:
- Cost per conversion: How much each conversion costs (on average).
- Conversion rate: How often a click leads to a conversion.
- Value per conversion: How much each conversion is potentially worth (you fill this out yourself).
- Total conversion value: The total value of all conversions.
- Conversion value per cost: How much each conversion is worth compared to how much they cost.
- Conversion value per click: Total conversion value divided by total number of clicks.
And don’t forget to track phone leads in addition to online leads (newsletter signups, form submissions, purchases, etc.). For many businesses that provide local services like accounting, massage therapy, HVAC, and so on, the phone is the primary way customers contact them. If you’re banking on phone calls, then you definitely need to incorporate phone tracking into your conversion monitoring. Assign a unique call-tracking number to each campaign so you can identify which ad generated which lead.
Go a Step Further and Calculate ROI
If you really want to be a PPC rock star, then you can calculate the ROI of your campaigns. Doing so will tell you which ads are actually generating money for your business (as opposed to just traffic or leads). Calculating ROI is rather complicated, and there are several different methods you can use. One helpful tool is a customer relationship management (CRM) software that tracks all of your leads and sales data. A CRM will prevent you from having to record everything manually. Regardless of where or how your sales data is stored, you can calculate your ROI by comparing how much you spent on each campaign (including cost per click and cost per conversion) and how many sales dollars it generated. The result is a concrete number that tells you which PPC campaigns are most contributing to your bottom line.
All Metrics Fit Together
There’s no single metric that tells the whole story on its own. Likewise, there’s no metric that you should just flat-out ignore, either. Look at all of the metrics together like pieces of a puzzle. For example, you can tell if something is wrong with your landing page content if you have a high CTR (meaning lots of people are clicking on your ads) but a surprisingly low conversion rate. Clearly, people are interested in your ad but are then turned off by your landing page. Now you know it’s time to make that content more compelling so your visitors will feel motivated to fill out a form, contact you, or take whatever action is your goal. When you put all of the above information into practice, you’ll be in a much better position to maximize your conversions and get more bang for your PPC buck. Still unsure of the best strategy for weighing your PPC metrics? Would you feel more comfortable in the hands of a professional? The team at Prospect Genius offers effective pay-per-click marketing management and transparent pricing. Call now to find out how we can help.