Using Google AdWords Conversion Tracking To Improve ROI

Strate­gi­cal­ly review­ing your con­ver­sion track­ing will help dri­ve more con­ver­sions for less spend.

Mark Hansen By Mark Hansen from Megalytic. Join the discussion » 2 comments

When you track con­ver­sions in AdWords, you can mea­sure and improve ROI. See which ads and key­words are pro­duc­ing the most con­ver­sions for the least mon­ey by track­ing your cost per action (CPA). Elim­i­nate ads/campaigns with high CPA and increase spend on those with low CPA. That will improve your ROI.

The goal of any PPC cam­paign is to dri­ve con­ver­sions. Whether you’re a retail­er look­ing to con­vert a web vis­i­tor to a sale, an asso­ci­a­tion work­ing to push ebook down­loads, or a media out­let get­ting newslet­ter sign-ups, the con­ver­sion is what you’re after.

These touch­points are the key com­po­nents of how you’re going to mea­sure the suc­cess of your PPC cam­paign. With­out the data to prove that your ads are dri­ving web vis­its and con­ver­sions, you’re wast­ing your time and mon­ey.

With Google AdWords’ Con­ver­sion Track­ing, you can track and improve your return on invest­ment (ROI) as it relates to your PPC cam­paigns. The data this resource pro­vides can give you valu­able insight on what ads and cam­paigns are pro­duc­ing the most con­ver­sions, for the least amount of mon­ey. Armed with this infor­ma­tion, you can then make strate­gic deci­sions on how to ded­i­cate your resources mov­ing for­ward and ulti­mate­ly increase your ROI.

Tracking Results

Before you can begin track­ing results, ensure that you’ve deter­mined what con­ver­sion point you’re going to track and that the con­ver­sion track­ing code is set up on your web­site. If you need help with this process, you can read about con­ver­sion track­ing in AdWords here.

Once you’ve tak­en the ini­tial steps to con­fig­ure con­ver­sion track­ing in Google AdWords, you can access this data in your AdWords cam­paign dash­board.

Con­vert­ed Clicks

First, check out the Con­vert­ed Clicks col­umn to see whether peo­ple are con­vert­ing on your site. This num­ber will cor­re­late with the total unique leads from AdWords.

In the screen­shot below, you can see that the cam­paigns as a whole drove 79 Con­vert­ed Clicks. In addi­tion, the Search – Gen­er­al cam­paign drove the most clicks out of all the cam­paigns.

Your first instinct, in order to improve ROI, is to adjust the ad spend to ded­i­cate more resources on the cam­paign dri­ving the most clicks. How­ev­er, take a look at the Cost/Converted Click, which is a col­umn to the right of Con­vert­ed Clicks.

You can see that the Search – Gen­er­al cam­paign, while dri­ving the most clicks, also shows the high­est Cost/Converted Click (mean­ing it’s the most expen­sive). There may be good rea­sons to increase spend­ing on the Search – Gen­er­al cam­paign, but when work­ing to improve ROI the high Cost/Converted Click for this cam­paign indi­cates you should be more strate­gic and con­sid­er shift­ing some of this spend­ing to oth­er cam­paigns.

In the same exam­ple above, we see that the Gmail Spon­sored cam­paign shows a low cost of just $12 per con­vert­ed click, indi­cat­ing that there is oppor­tu­ni­ty to expand this cam­paign and con­vert more vis­i­tors at a low­er cost. We also see the Brand cam­paign show­ing the low­est Cost/Converted Click, at around $7, prov­ing the val­ue of keep­ing a cam­paign active for brand­ed terms.

With this infor­ma­tion in mind, it is clear that shift­ing spend­ing from the Search – Gen­er­al cam­paign to these oth­er cam­paigns may improve ROI. How­ev­er, because the Search – Gen­er­al cam­paign is effec­tive, we should also look at why it is work­ing and apply its best prac­tices to these less expen­sive ads. Per­haps the call to action or ad con­tent can be updat­ed, or the tar­get audi­ence can be adjust­ed.

By find­ing what’s work­ing for a high-con­vert­ing ad, you can improve your oth­er cam­paigns and that will also dri­ve a bet­ter over­all ROI.

Click Conversion Rate

Anoth­er impor­tant met­ric in AdWords is Click Con­ver­sion Rate. This stat tells you the per­cent­age of clicks that result­ed in con­ver­sions, which can give you an idea on how like­ly vis­i­tors from AdWords are to become cus­tomers or sub­scribers.

The high­er the con­ver­sion rate, the more like­ly peo­ple are to become cus­tomers. How­ev­er, con­ver­sion rate isn’t an end-all stat. For instance, note that the Gmail Spon­sored cam­paign, due to the nature of how it’s tar­get­ed vs. a search or reg­u­lar dis­play cam­paign, shows a low con­ver­sion rate but a decent num­ber of con­ver­sions at a rea­son­able cost.

When you’re invest­ing in AdWords cam­paigns, it’s impor­tant that you care­ful­ly track per­for­mance, make adjust­ments, and allo­cate spend­ing so that you’re pro­duc­ing the most con­ver­sions for the least amount of mon­ey. By con­sis­tent­ly and strate­gi­cal­ly review­ing Con­ver­sion Track­ing, you can make informed updates to your cam­paigns that will dri­ve more con­ver­sions for less spend­ing and improve your over­all ROI.

Mark Hansen

Written by Mark Hansen

Founder and President, Megalytic

Mark Hansen is the Founder and President of Megalytic , the leading tool for building web analytics marketing reports. Megalytic is used by digital agencies, marketers, and business owners for faster, more insightful and better looking analytics reports. Mark writes a regular blog about Google Analytics best practices, and now provides insight on Google AdWords following Megalytic's latest integration with the tool.

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