Monday, 25 May 2015

These Are the PPC Metrics That Actually Matter

If you’re anything like me, you’ve participated in a couple of DIY home 
improvement projects. At the beginning of these projects, with YouTube 
training videos as my sidekick, I have an irrational sense of confidence 
in my handyman abilities.
When I’m tracking down my supplies at the local hardware store, I often 
find the products priced and displayed as “good,” “better” and “best.”
The frugal side of me tries to argue that “good” is good enough, but is 
there something about the “best” product that will secure my DIY 
victory? With PPC advertising, we often face the same dilemma; we 
need to decide which metrics are “best” to measure the success of our 
campaigns. There’s a wealth of content and opinions on how to measure 
PPC success, which can get confusing. This post will help you understand 
how different metrics can paint very different pictures of PPC campaign 
I’ll show how traffic-focused metrics can be a good starting point, how 
conversion-focused metrics are even better and how ROI-focused 
metrics provide the most complete picture for making meaningful 
changes to your campaigns.

Let’s dig in.

Good PPC metrics are traffic-focused

Many advertisers will default to looking at the click-through rate or cost 
per click when determining the success of a campaign. AdWords provides 
a lot of traffic-focused metrics that are incredibly useful, including 
underused gems like device segmentation and impression share.
And while those are definitely a good start, it’s important not to get 
so distracted that you lose sight of your basic business goals: 
generating a profit.
My agency has serviced or audited over 1,000 AdWords accounts. Believe 
it or not, almost half of them had not set up conversion tracking.
Conversion tracking allows you to measure conversion actions like a 
purchase or a lead submission in your ad platform, usually by placing 
a code snippet on a thank you or order confirmation page.
Without that piece of code, the only metrics you can measure are related 
to traffic, such as search impressions, clicks and click-through rates. Let’s 
look at an example to see why this is problematic.

What traffic-focused metrics tell you

Imagine you’re a mortgage company and each new paying customer is 
worth on average $3,500 in revenue with 50% in gross margin.
If you haven’t set up conversion tracking, you’ll mostly end up looking 
at reports like this:
If we’re only looking at traffic-focused metrics, our top campaign seems 
to be Campaign 5, which has the most clicks, the best click-through rate 
and the lowest cost per click. Meanwhile, Campaign 4 has expensive 
clicks – which looks like a red flag! But the truth is this data alone can’t 
really tell us whether the campaigns are successful to a company’s 
bottom line. For our mortgage company, we need to know whether the 
clicks are actually translating into useful leads.

Better PPC metrics are conversion-focused

If you’re already using conversion tracking, pat yourself on the back: 
you’re better off than much of the competition.
If you’re not, then get conversion tracking set up immediately. It’s 
easy to set up on most platforms like Google AdWords and Bing Ads 
(and if you’re using Unbounce you can put the tracking code right on a 
built-in thank you page).

Think beyond web conversions

Conversion tracking is more than just web leads and sales: among new 
accounts I’ve audited or onboarded, I’ve found that approximately 75% 
of advertisers who take phone leads don’t track them as conversions
For many industries, phone calls are the main source of leads, so it’s 
critical to include calls in your conversion tracking! Many call tracking 
platforms have built-in ways of setting this up, and Google has a 
solution for AdWords advertisers here.
Call leads are more valuable for some businesses than for others, so 
you’ll want to keep in mind that not all types of conversions are 
necessarily equal – but the first step is making sure everything is 
tracked and measured.

What conversion-focused metrics tell you

Let’s say our mortgage company joins the big leagues and sets up 
conversion and call tracking. Here’s how that report looks:
Now we can track how many people are actually signing up for the 
service, not just clicking our ads.
Now we can start identifying our top-performing campaigns using cost 
per lead data (cost per conversion in Google AdWords). You’ll notice 
that Campaign 5 has the best cost per conversion, so it still looks like 
our top performer. Campaign 4 still looks like trouble.
But while conversions are great, at the end of the day what really 
matters is whether leads became paying customers.
Conversions tell us how many leads our company got, but not how 
many actually signed up to refinance their homes or how much revenue 
they brought in.
'Your PPC campaigns aren’t just about clicks. Don’t lose sight of what 
matters: generating a profit.' 

The best PPC metrics are ROI-focused

For marketers who want to use the most meaningful data, let’s move 
to the golden metric: actual ROIThat means tracking leads from click 
to close and measuring revenue on a per-lead basis. When you 
understand which campaigns, ads and keywords are actually generating 
revenue, you’ll be way ahead of competitors who have no idea where 
they’re making or losing money.

What ROI-focused metrics tell you

Let’s say our mortgage company decides to figure out exactly which 
leads are earning revenue. We can track specific leads in our CRM back 
to each campaign, set up separate phone numbers for each campaign 
and record which calls led to sales.
Using our customer value numbers from above, we can calculate the 
following report:
We calculated revenue by having our CRM capture the Campaign ID in 
Google Analytics, then created unique phone numbers for every 
campaign so we could track every sale back to its source. Then we 
calculated the revenue value of every customer attributed to a PPC 
campaign. Suddenly Campaign 4, which looked so bad before, is now 
our hero! Not only does it have the best ROI, it brings in the most 
revenue and the most sales — and that’s with the fewest conversions 
and second-fewest clicks. Now we know something much more useful 
than cost per conversion — we know how valuable a conversion is. We 
know where to focus our marketing efforts to maximize revenue, and 
where we can make improvements that impact the bottom line.
We could then respond by allocating more budget to Campaigns 4 and 5.
Meanwhile, Campaign 3 gets a lot of traffic and conversions but has a 
poor ROI, so we can get to work at rewriting ads and landing pages to 
better qualify those leads.
Those are the kinds of changes that have meaningful results!

3 simple ways to track and measure your PPC ROI

The example above mirrors what we often see in the lead generation 
space:more expensive leads can often be the most qualified and produce 
the most revenue. But without breaking down campaign ROI you never 

'Costly PPC leads are often most qualified. Break down campaign ROI 
before you do anything drastic.'

So how do you move beyond conversions and start focusing on ROI?
Here are a few simple ways to get started:

Call tracking: As mentioned above, get a call tracking solution that 
lets you track PPC calls independently and preferably at the keyword 
level. AdWords has a feature that lets you set it up on your landing 
pages here. Then make sure you’re reviewing calls to see which 
incoming leads are converting into sales.

CRM integration for lead generation: A good CRM will integrate with 
any PPC platform, so you can look at customers and know which 
campaigns brought them to you. To determine ROI, compare sales data 
to the metrics in your PPC campaigns to get cost vs expected revenue.

Getting this set up depends on your specific CRM, but here’s how to 
get started with ZohoInfusionsoftSalesforce, and Hubspot
Unbounce also has built-in hooks for integrating with most CRMs.

Dynamic revenue tracking for ecommerce: The nice thing about 
ecommerce is that platforms like AdWords allow you to set a 
conversion value for specific products, so you can compare revenue 
and learn your ROI right from AdWords. Don’t miss out on this if your 
site includes a customer checkout process.

Every metric matters

PPC marketing leaders know that all the metrics we’ve discussed are 
valuable – they work to improve the three categories over time, while 
focusing most of their efforts on ROI to move their profitability in the 
right direction.
Traffic data like impressions, clicks and cost per click tell you how 
much search demand there is for your service and how many people 
are responding to your ads. Better metrics like conversion data tell 
you how effective your ads and landing pages are at generating leads, 
as well as how much your leads cost. But nothing tops actual ROI 
data: how much conversions are worth to your company’s bottom line
As we’ve seen, that kinda of data lets you focus on making changes 
where you can make the biggest difference!
At the end of the day, the key is to look at the right metrics for the 
right situations and use that data to make the most meaningful 
changes to your campaigns.

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