In the previous 3 parts of this guide we have had an introduction to using search engine pay per click advertising, looked at how to research and choose your keywords in more detail, and how to write your PPC adverts. Now they are up and running, the next step is to analyse their performance.
Once you have set your objectives (i.e. what you want to acieve with your PPC adverts) you can decide how best to measure the success of your Pay Per Click campaign.
Generating sales or leads
If your main aim is to generate sales or leads, you should use Conversion Rate, Cost Per Action and Return On Advertising Spend to determine success. Conversion is calculated by taking the number of clicks which turn into sales and representing them as a percentage. For example, three sales after ten clicks would equate to a 30% conversion rate.
Cost Per Action (CPA) is a monetary value, and shows how much you have spent to acquire that sale, lead or download. For example if you have spent £100 and 10 people have downloaded your service, you have a CPA of £10. This will show you how cost-effective your marketing is. For example, if you have a CPA of £10 and your service is only worth £9, you have made a loss of £1 per sale!
Return On Advertising Spend (ROAS) is the amount of money you have generated for every pound spent. For example, a spend of £1000 generating £1500 revenue is a return of £1.50. A spend of £1000 generating £500 revenue is a return of £0.50 i.e. a loss of 50p for every £1 spent
If your target is brand awareness, then you should focus on impressions (the number of times your ad is shown on a screen) and ad clicks. You can look at these two data sets independently or combine them to create your Click Through Rate (CTR). For example, an advert with 100 impressions and 30 clicks has a CTR of 30%.
Using the data
Data for data’s sake is a waste of your time. It may present you with some attractive graphs, but if you are not using that data to make decisions on the adverts and your website, your time is better spent elsewhere. Use your data to answer these questions:
- How do customers get to your site?
- How do they interact with your site?
- What was the result of their visit? I.e. did they buy anything?
A basic account will provide you with a lot of information about your campaigns including the following metrics as standard:
- Average ad positions
- Click through rate % (impressions/ clicks)
However, it will not tell you how many sales were generated or information about return on advertising spend (ROAS). To do this you will need to install post- click tracking on your website.
There a variety of different tracking solutions to choose from, some free and others paid. One of the best free products on the market is Google’s Analytics service. You will get a free Google Analytics tracking account when you open your Adwords account. To access your account, just click on the ‘Analytics’ tab at the top of your account page.
Applying the code to use sales tracking will require some basic knowledge of HTML. You can also tie in your AdWords account simply with a couple of clicks. If you have the ability to enable e-commerce tracking, you can also tie in your sales and revenue providing you with a detailed break down of where they came from and what they bought/ spent.
Basic measurement terms
The number of times your site was visited. Someone visiting your site more than once, will have each visit recorded here.
The metric which measures a visit to the site only once during a specified time period.
The number of times a web page was requested.
Pages per visit
This shows, on average, how many pages your site’s visitors looked.
The percentage of visitors who leave after entering the site on a certain page with out navigating to any other part of the site.
CPA – Cost Per Action
This is the amount of money it has cost you to take the desired action on your site e.g. Buy a product, sign up to a newsletter…
CPC – Cost Per Click
The amount of money you have paid for someone to click on an ad
CPM – Cost per thousand impressions
The advertising model which charges advertisers by the number of times an ad is shown. This is typically broken down to the chargeable amount per thousand impressions. For example, 100,000 impressions at £1000 is a CPM of £100.
CTR – Click-Through Rate
The percentage of people who see an advert and then click on it
Return On Advertising Spend – ROAS
This is the amount of money you have generated for every pound spent.
Go to www.marketingterms.com for a comprehensive collection of marketing terminology and definitions
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