The Simple How To Measure Conversions and ROI
Measuring your ROI and determining your advertising spend does not have to be overly complicated if you just need a back-of-napkin estimate. Here is the easiest way you can get the numbers you need to start making better decisions about the money you spend online.
Open your Google Analytics (GA) and create a Goal from a Product (page) to a Lead form. Wait a week or whatever time-frame you think will give you a good sample. Then look at your GA Acquisitions > Sources. You should see something like this.
In this view, the Goals we have setup clearly illustrate the quantity and quality of leads each source produces.
Back-of-napkin we can immediately see a dramatic differential between the Quality of Organic visitors versus our paid sources. If your report looks similar, you are asking “Why are we not budgeting more to acquire more Organic Traffic since those visitors are far more productive?”
- Most businesses do not think about Organic visitors as something they can get more of (quickly).
- Most business spending goes ONLY to CPC (Adwords/PPC) and 3rd Party Leads because they both produce tangible visitors as soon as you submit your credit card.
- But NOTE: If we spent $5000 on #4, we wasted $5000 – the only thing expedient there, is how quickly we are going broke!
- Spend on CPC (Adwords/PPC) and 3rd Party Leads has 1:1 proportion. You must pay for each visitor. Stop Spend : No Visitors.
- Spending on Organic visitors is perennial to your ROI. Small but gradual spend : Ever More Visitors.
Don’t take your Organic Traffic for granted.
By the way, “I have a website, they will come” is not the correct way to pursue your Organic Traffic strategy. A better analogy is to view your Organic Traffic as gardening.
Grow more organic visitors! Organic visitors are the only perennials in your garden and all gardens need tending and patience to produce good yields. Now you have made a better decisions about your Internet Advertising spend.
What is a Blog Post Worth
Does Blogging Pay? Its the most common directive issued in SEO. Blog! If you want free traffic, Blog! If you don’t have a big budget to pay Google Adwords or Bing Adcenter for clicks, BLOG!
But does blogging really payoff? Here is your real-world-local-business answer. Not only can we see exactly how many clicks a blog post is bringing every month, month after month; we can calculate the exact value of those clicks, and therefore calculate the exact value of the blog-post. (which means how much could you pay someone to blog for your business) Here is our Query Report from Google Webmaster or Google Analytics.
A single Blog-post about how swimming pools can pop out of the ground, brought our business 31 clicks from natural searches last month.
Therefore if our blog-post brought 31 visitors and we are paying a nice round figure of $3.30 per visitors in our PPC campaigns, the blog is worth $102.30 per month or $1,227.60 per year. With this data, we can now make many more assumptions about our marketing spend.
Brilliant! Hold on! What you may have missed is that there are 4 blog-posts on this website, but this is the only one that is performing to bring us a measurable number of free visitors. That is a variable that needs to be included in our overall marketing calculations to determine what a blog-post is really worth (paying for).
Plus there are a few noteworthy bullets to go with our numbers that can serve to flesh-out your Internet Marketing assumptions:
- The blog-post title, when written, did not reflect what those online searches would be that produces our traffic. This blog-post could potentially perform much better with the right title. That’s water under the bridge, but now that we know, we can still do some SEO to increase our page position and thereby, increase our clicks.
- The CTR for this post is exceptional. Combined with Average Positions (that are at the bottom of page 1) and that tells us the other results on the SERP (search results page) are not as appealing, and may also mean our meta description (SEO) is working well.
Another critical marketing variable not provided here is CONVERSION (into leads, into sales) but that’s something for another post. With conversion figures you can really dial-in your ROI – the ultimate in Internet Marketing Planning.
- Q: What should I blog about?
- A: What questions do your customers ask you?
- Q: Should you hire someone to write blogs?
- A: Can you produce the material for them and can they optimize the content?
I know those are not an answers, but they should point you in the right direction to the answer you need. Only you know your business well enough to make all this work. Everyone else can only help.
Well, without question, blogging works to bring (relatively) free traffic and save you the cost of paying Google and Bing for visitors. There is technique (SEO) involved in making it work to its full potential, but my experience is that everyone has moments of inspiration and motivation, but few can actually execute – consistently. Perseverance and persistence (lack thereof), not $, is what inhibits most Internet Marketing from real success.
But at least now you cannot say you don’t know whether blogging is worthwhile for your business.
Can You Predict Keyword Impressions vs CTR
I have been doing this (SEO, PPC, Keyword Research, Internet advertising, etc) for a long time and I am still often and pleasantly surprised by what I find. Its pleasant to do work that is not so rote and predictable, like keyword variations and the Impressions they generate and the CTR (click-through-rate) they get.
Here is a simple but interesting, real-life sample that illustrates how easy it is to be wrong when you assume you know what people will search for in order to find a product or business online. You would be wrong with most of your assumptions.
This sample is even more interesting because of the keyword variables – there is more than one way to search for the brand – volkswagen or vw.
It was my assumption that more people would search for “vw dealer” than for “volkswagen dealership” because its easier to type. But this sample proves that assumption would be wrong.
And one would not necessarily assume that the people who search for “vw dealer” are the most likely to convert (click-through) into a visitor to our website – the highest CTR of all our possible keyword combinations and 250% better CTR than our big Impression keyword. Surprised? I was.
There are more gems to find here, but finding those is up to you – enjoy the sample/example.
CTR (ClickThrough Rate) and Conversion
Assuming you achieve a position in the SERP you need to convert that position into a click. Here is the secret ingredient:
- A call to Action
- 150 characters packed with good keywords
The Meta Description is used by search engines for the text in your SERP (natural search results page) listing – its the black text that people read when they see your website listing in the SERP. If you don’t use a Meta Description tag, the SEs will take whatever 150 characters of text on your page seems relevant and use it for the text description of your website. Here is a good example of a page which is probably missing a meta description or its just a poor choice because it has no Call to action. Why would I click on that jumble of words?
Now here is a good example of a Call to Action and it fits into the 150 characters allotted.
Here’s the tough part: have 150 characters of relevant information/keywords in your Meta Description tag, AND a call-to-action in those same 150 characters. This must compel the search-user “why should I click on this link rather than that one?”.
Test this hypothesis; take your top search term and observe how many listings in the SERP lack these two basic ingredients to optimal CTR.
And that’s where Click Distribution comes in; on the Call-to-Action. That’s what people see. Clicks go where the eyes see something interesting, not entirely where the listing is on a page.
Few websites are optimized to include a well designed Meta Description tag. Using a well-crafted Meta Description will get you ahead of 98% of your competition. I’ve seen increases in traffic (CTR) of 30% using a good call-to-action in the Meta Description.
Find Your Website Conversion Rate
If you are looking for a PPC ROI Calculator for Adwords, this is not one of those, its more valuable than that.
I suggest that it’s better to view your “calculations” as an exercise in logic. Calculators, like large spreadsheets, tend to muddy the water unless you know exactly what answers you seek before-hand. You want to know whether you should spend or not spend. If so, you are in the right place.
If you have a brand new website, this article will explain the only way to determine the conversion rate of visitors to your website – how many will actually buy your product. Without this vital statistic, you cannot calculate ROI.
This article will also serve as a routine to follow / reference when setting up new PPC campaigns for established businesses. Bookmark it!
There are 3 attributes (variables) you need to set properly in a PPC test campaign so-as not to waste precious ad dollars. You will want to iterate through these attributes over the next few days, until you have established the figures you need to accurately calculate website conversion and PPC ROI.
1) Set a Very Small Geo Target. Decide on your ideal market. Where do they live? Then select that area for your campaign, being sure to disable ad exposure in all other areas. The area may be a zipcode. If a zipcode is too small to provide enough search volume, choose a suburb, or a city. Increase the size of the geographic area until you see impressions. Remember that Adwords and Adcenter do not show real-time statistics, so you’ll have to make your changes on a daily basis. Gradually expanding your Geo Target area with each iteration will likely prevent any surprises.
2) Set a Very Definite Daily Budget at the Campaign Level
If you are using this method to determine the feasibility of PPC for your business, then this is like a casino for you. Only spend what you can loose. Set a daily budget you can afford – the amount that will allow you to sleep at night. Be sure this is set at the campaign level and do not rely on any other limit settings to save your ___.
3) Set a Very High Keyword Bid (CPC)
It is very important to do this. If you don’t do this, discovering total click potential and average CPC for 1st place will be compromised. We really need to find the CPC for 1st, 2nd, 3rd places or we won’t be able to make reliable ROI calculations. Don’t be afraid to bid very high so long as you have your Daily Budget setting in place. In the keywords section of Adwords or Adcenter, look at the maximum bid suggestions for a variety of your keywords and choose the highest as your starting bid for all keywords. These numbers are only suggestions and I have never found them to be very accurate. That’s why this experimentation is necessary in the first place.
NOTE: Setting an initial low bid seems to handicap campaigns in such a way that subsequent increases to bids do not take effect quickly, whereas setting a high bid initially, then lowing it, seems to work fine. (just my experience. I have no way to prove this is true)
4) (optional) Set an Expiration for the Campaign or choose a time of day to run ads within. This means the campaign can be halted while you evaluate which of the other attributes to adjust.
5) Now that you have found the Average CPC for some of your keywords, adjust the maximum bid(s) just below the price that you paid for 1st place. This will greatly reduce your CPC, as 1st place is usually much higher than the bid for 2nd place.
6) You will now be able to calculate based on ad impressions, how much search volume exists for you product / service. You may need to do some estimating given your Geo Target limit, or you could open the Geo area to provide more data.
Using iterations of these steps and changing the variables carefully should provide the necessary data to determine Total Search Volume and Website Conversion statistics and should enable you to Justify a Paid Search Campaign.