Digital Marketing

Again to Fundamentals: Understanding Paid Search Standards

One of the great things about paid search is the fact that you can track everything. If someone visits your store after seeing your billboard or TV commercial, you can not understand it.

However, when someone sees your paid search ad and visits your website, you know how it got to your site. You know what ad you saw, what copy you responded to, and even what search term triggered your ad.

There's so much data that it can be hard to figure out what it all means or what to do with it. Number of impressions, clickthrough rates, cost-per-click … How do you sort things out and use your paid search criteria to make smart decisions?

I mean, what's the point of having all this data if you do not know what to do with it?

To make matters worse, many of these data are difficult to interpret correctly, so even experienced online marketers often draw false conclusions from their data or focus on the wrong metrics in their accounts. So, if you've ever stared at your paid search account and asked yourself, "What do I miss?", This article is for you.

Are you focusing on the right paid search criteria?

If you're like most online marketers, you're likely to run multiple campaigns, at least a dozen ads, and over a hundred keywords that you need to track. And that's when your account is rather small.

Each of these campaigns, ads, ad groups, and keywords can provide you with a wealth of information about your audience and the effectiveness of your advertising – but only if you know how to use your data.

Today, paid search is so competitive that just setting up Google Analytics and keeping track of the price per click is not enough. You need to know how to interpret and use every aspect of your paid search data to optimize your account's performance.

While this may be a daunting task, most of the information in your paid search account can be broken down into three concise parts: traffic information, conversion information, and sales information.

Let's take a look at these three types of data and how you can use them to interpret what's happening in your paid search account.

What type of traffic do you have?

For paid search advertising, most marketers focus on traffic metrics such as impressions, cost-per-click (CPC), and click-through rate (CTR). After all, the main reason you do paid search campaigns is driving traffic to your site.

And it's not surprising that paid search platforms like Google Ads and Bing Ads are packed with traffic-related information: device segmentation data, keyword information, impressions sharing impressions, and more. It's incredibly easy for Google and Bing to track and deliver this information, and most users are interested in it.

What You Can Learn From Traffic Data

While all this traffic data is certainly useful, it's only useful if you know what to do with it. Apart from that, your traffic data tells you a lot about how well your campaigns work for your audience.

If no one clicks on your ads, chances are that your ad copy will need some work … or you're targeting the wrong keywords. If your cost-per-click is too high, you may need to rethink your bidding strategy. If you do not get enough impressions for your best campaigns, you'll probably need to consider a budget shift.

Let's say you're placing paid search ads for a local lawyer. On average, this customer earns $ 3,200 from a new customer and spends approximately $ 1,200 on its maintenance.

In your most recent review of your campaigns, review your traffic data and compile the following report:

Using the above data, you can easily see which campaign is getting the best results. Campaign # 3 gets more clicks at a lower cost-per-click than any of your other campaigns. While spending more than twice as much on Campaign # 4, you've received a third of the clicks you've received from Campaign # 3.

Obviously, you either have to close Campaign # 4 and put your budget in a better campaign like the # 3 or spend some time figuring out why Campaign # 4 does so poorly.

However, before making decisions, we should probably consider the other two types of data in your account. After all, your lawyer does not make any money with clicks. To make money, she needs leads … and none of this data tells you if all those clicks are actually leads or not.

Is your traffic changing?

Let's talk about conversion data in this sense. Since Google and Bing often can not see what a conversion is to your site, additional effort is required to set up conversion tracking for your site. As a result, nearly half of paid search engine advertisers are not tracking their campaigns beyond traffic data.

Without conversion data, however, you can not answer the following two critical questions about your paid search campaigns.

1. Does my website (or landing page) work well with my traffic?

Paid search engine marketing is deliberate marketing. When someone searches for something on Google or Bing and clicks on your ad, they're actively looking for a solution to a problem … a problem that they think your organization can help.

Your click is an act of trust in your business, and the page on which they land after clicking shows them if their beliefs were legitimate or not. If your landing page or website meets expectations, a decent percentage of users should convert. If not, they will go.

So, if your conversion rate is high, your landing page will be fine with your traffic. However, if your conversion rate is low, it means something is wrong. Your landing page or website is not working for your traffic. They leave the site to find something better.

If you are in the latter situation, you should take a close look at the page you are sending traffic to. You may need to rethink your page and site experience to better match your traffic expectations.

2. Does your traffic fit well with your landing page?

Of course, the opposite could be the case. If your landing page is supposed to convert traffic but this is not the case, then the wrong people from your ads may be redirected to your page.

If people click on your ads because they want a divorce lawyer, but you're a personal injury company, will they convert? The wrong traffic will never be converted, no matter how good your site is.

In this situation, it's often a good idea to look at the search terms that people use to find your ads and the actual ad copy you use. If you seem to attract clicks from the wrong people, you may need to revise your advertising strategy to reach the right audience.

What You Can Learn From Conversion Data

If you've set up conversion tracking, look beyond traffic and see how your conversion campaigns have affected you.

Although the campaign does not have the best conversion rate (CR), Campaign # 3 will get enough cheap clicks, so it still has the best cost per lead. And campaign # 4 is still a lost cause. With a low conversion rate and high cost-per-click, leads are produced that are nearly ten times the cost of a campaign 3 lead.

At 8% conversion rate, none of these campaigns seem to focus on the wrong traffic, but both could probably benefit from a small optimization of the conversion rate on their landing pages.

Although this data gives a clearer picture, your solicitor-friend with leads still does not make any money. She has to close new customers. To get this information, we need to look at our sales data.

Are you doing sales?

As helpful as traffic and conversion data is, they still do not tell you whether your campaigns are making money or not. And if your campaigns are not making money, why are you leading them?

Unfortunately, it can be difficult to track your paid search campaigns through to sales data. E-commerce is fairly straightforward, but once you're beyond, it can be difficult to link your actual sales data to the performance of your campaign. You often need some kind of CRM like Salesforce and you need to figure out how to connect all the points.

But is it worth it? Absolute. Let's take a look at the sales data for the campaigns of our hypothetical law firm.

The fourth campaign suddenly went from zero to hero. The CPC or conversion rate may not be high, but ROAS (Return on Ad Spend) is almost twice as high as any other campaign.

What does that tell us? First, it's clear that Campaign No. 4 appeals to people whose purchase probability is far higher than the other campaigns. Campaign # 3 could generate a lot more traffic, but it is far less likely that this traffic will register for the services of our lawyer friend.

Does that mean Campaign 3 is bad? With a ROAS of 92 percent, it's certainly losing money right now, but it has a lot to offer in terms of traffic and data. Before you can make a judgment on it, you need to dive into that data and see if there's a way to turn all that potential into actual sales.

You may need to change your advertising messages to filter out people who are unlikely to actually become customers. Maybe you can optimize the landing page to better engage potential customers. Maybe your lawyer just needs a little tuition to respond to hints from this campaign.

In any case, without this sales data, it would have been easy to assume that Campaign # 4 was a complete loss and Campaign No. 3 earned more from your budget – though in fact the opposite was true. That's why sales data is so important. Traffic and conversion data will provide useful information about your campaigns, but only the sales data will answer the question, "Are my ads actually making money?"

Conclusion

Your paid search account is full of valuable information, but converting all of that data into actionable information can sometimes seem overwhelming. The trick is to make sure you have access to all the data you need to make informed decisions, and then know what each type of data tells you.

Now that you know how to interpret your data, all you have to do is search your paid search metrics. Ways to improve your account should be fast. Good luck!

The opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Employee authors are listed here.

About the Author

Jacob is a passionate entrepreneur committed to building businesses with PPC & CRO. As the founder and CEO of Disruptive Advertising, Jacob has developed an award-winning, world-class organization that has helped more than 2,000 businesses increase their online revenue. Connect with him on Twitter.

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