Adwords Explained - Page 10 - Monitoring ad performance and conversion tracking

Ad rotation, why it’s important

When your Adwords campaigns has multiple ads for a single Campaign, or Ad Group, Google allow control of how the rotation or display of these ads occurs. When this setting is set to “optimise”, Google will automatically increase the number of times an ad is displayed if it achieves a higher CTR.

This has a re-inforcing effect of rewarding effective advertisements by showing them more often. It’s a useful feature for a mature campaign with very well refined advertisements, however when you are initially setting up your advertisements or when you are testing changes that you’ve made – in order to perform side by side comparisons of different variations of ads, you want to switch this off (switch to “rotate”) in order to show all ads equally allowing easy comparison.

In this way each ad is shown the same amount of times, giving your CTR results greater meaning as you can truly assess which is of more interest to your audience without Google’s optimisation process affecting these results.

Good artists borrow, Great artists steal!

Have a look at the other Adwords advertisements that are being displayed when you search on relevant keyword terms. You may be able to gain some inspiration from these. Keep in mind however that your ad will appear next to theirs, so you’ll want to gain inspiration from these, and not exactly duplicate them of course.

Conversions and Return on Investment / Ad Spend

All of the tweaking and tuning and comparing of your advertisement and keyword and campaign CTR and impressions will only go so far in telling you about the success of your campaign – that is unless you goal is simply to drive user traffic to your website and that’s where it ends.

Most organisations however are seeking some sort of conversion to a customer or subscriber or some other action from the user after they have clicked on the advertisement and been taken to the advertiser’s website.

Google offer a conversion tracking tool as a free part of the Adwords system. This allows the advertiser to insert a small snippet of HTML/Javascript into their website to track when a user visits this page or performs this action. This action being tracked could be adding a product to a shopping cart, or placing an inquiry through a “Contact Us” form. Companies such as Salsa Internet can assist with setting up conversion tracking on your website.

Once setup, whenever a user performs this required action, this is registered against the advertisers Adwords account, and in fact against the specific keyword term that was searched on when clicking on the advertisement. This allows incredibly powerful tracking of results of an Adwords campaign, in that the specific amount invested in that keyword, or adgroup or campaign to achieve a certain number of actions or conversions.

ROI – an example:

Lets say that ABC Vacuum cleaners place a conversion script into their “thankyou” page after a user registers a sales inquiry through their “Contact Us” page. Over time ABC Vacuum, through monitoring their Adwords system, observe that one in every 10 user clicks on their advertisements results in a user placing an inquiry which registers a conversion. Therefore if they are paying on average $1.00 for each click on their advertisements based on a broad range of keyword terms, then each inquiry is costing them $10.

If they then convert 10% of those inquiries into sale, then they will observe that each sale costs them $100 to achieve in terms of total ad spend, or in other words their Return On Ad Spend is 1 customer for each $100 spent.

If they are selling vacuum cleaners with an average profit margin of $70 then this would appear to be a problematic result.  In the long term if these customers don’t result in repeat business or a longer term relationship, then their use of Adwords or the results they are achieving should be reviewed.  It’s worth keeping in mind however that in many businesses, clients come back perhaps for future sales, or in fact they may visit a website online, and then visit a store to make a purchase offline, so a balance of issues must be considered before making a hasty judgement about the success of Adwords for a business.

Make sure that in your customer sign up processes, that you have a mechanism for asking the client where they heard about the business – to ensure you maximise your chances of measuring your marketing spend across the breadth of ways in which you sign up new clients (ie online, or via your physical store / retail shop front).

One important strategy for a non-performing campaign, is to consider culling the very broad matched keywords or the keywords which are not converting.   In this way, while the customer may spend less on adwords, and achieve less clicks through to their website, the clicks they do receive will convert in a more cost effective fashion.

This is the fundamental principle behind long term success in Adwords - ensuring cost effective conversions, which result in sales that deliver a positive return on investment.

The long tail of search

Usually for most industries (ie vacuum cleaners), there are a small number of broad terms which drive a large % of searches and clicks in your campaign. 

3rd Party Tools

Page 11....Designing campaign "Landing pages" that maximise results