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The most important metric you can track

Tracking your cost per conversion is essential to determine how well your AdWords campaigns are doing.
By Perry Marshall |

 

In Ultimate Guide to Local Business Marketing, Google AdWords expert Perry Marshall and lead generation expert Talor Zamir introduce you to the basic framework behind a successful local marketing campaign. In this edited excerpt, Perry and Zamir explain why tracking your cost per conversion is essential to determinine how well your AdWords campaigns are doing.

 

If you are tracking conversions, you have a huge advantage over your competitors and will be able to outspend them and get more leads because you will be getting lower costs per lead and tracking everything. You will know exactly which parts of your campaign are profitable and which are not.

 

For instance, if you have identified that half your ad spend was for keywords that did not produce enough conversions, then the next month when you pause those keywords, you become profitable. Then, every month as you get more data and start optimizing your campaign more and more for conversions, you should be able to increase the ROI (return on investment). Just keep getting lower and lower costs per conversion, thereby increasing the ROI on your campaign.

 

That is the path to long-term success with AdWords, and it is completely contingent on you tracking all the conversions each keyword and ad is producing.

 

The most important metric: cost per conversion

Although prospects and new clients always ask us what the cost per click will be in their AdWords campaigns, at the end of the day, the cost per click is not the most important metric. The most important metric, by far, is cost per conversion.

 

Every time we mention that we work with personal injury lawyers, almost the first thing out of everyone’s mouth is, “I heard they have such a high cost per click. How can Google AdWords work for them when the cost per click is so high?”

 

What people need to understand is that if a cost per click is high, it is only because those leads are hot, responsive, and valuable. It also means that if you have a high conversion rate on your landing page, and you are optimizing your campaign the way you should, then you are going to be able to get great results in a very competitive niche where leads are extremely valuable.

 

For example, let us say we have a campaign for a personal injury lawyer. Even if they pay $50 (P2,316) a click, while many people think that is a lot, if the landing page converts at 25%, then they would be getting leads for $200 (P9,266) each. Most personal injury lawyers would be very happy to get good, high-quality leads for $200.

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It is really important to stay focused on what the cost per conversion is and optimize your campaign for that metric. Some keywords may have a higher cost per click but also have a higher conversion rate. Other keywords have a much lower cost per click, but you may have a much lower conversion rate.

And while you should be monitoring cost per click, it is not the be all and end all that many people think it is. The most important metric is cost per conversion, and that is what you need to keep your eye on when optimizing your campaign.

 

Here are the three things you need to watch when optimizing your campaign:

 

 

1. Keywords. When optimizing your campaign, the no. 1 thing you are going to be looking at closely is the keywords. On the “Keywords” tab, look at which keywords are giving you a good cost per conversion and which are not.

 

If you find a keyword with a high cost per conversion, it does not necessarily mean you have to pause that keyword. You might find that a certain keyword is getting you an OK cost per conversion or one that is even a little high. In a situation like that, maybe you see that your ad is always running in position 1.0, and you could be overpaying for that keyword. Instead of pausing the keyword, you could simply lower your bid. Therefore, you would be paying a lower cost per click, and, assuming you keep the same conversion rate, that keyword may end up working out for you.

 

If a keyword is really not converting well even after you lower your bid for it, then you can outright pause it.

 

 

2. Ads. The second thing you should look at is your ads so that you can split-test them.  When you see which ads are getting you a high cost per conversion, you are going to pause those and leave the ones that are getting you the lower cost per conversion. Here is a helpful tip to keep in mind when optimizing your ads: We have found that if the ad copy in your ad matches the ad copy on your landing page, it tends to increase your conversion rates. And what you definitely want to avoid is creating any disconnect between your ad and your landing page.

 

For example, say you run an ad that mentions a “100% money-back guarantee” or “interest-free financing,” but that benefit is not mentioned on your landing page. That disconnect can make a prospect think twice about contacting you because they may fear you are trying to pull one over on them with some sort of bait and switch. If your ad mentions a benefit that is getting a lot of prospects to click on the ad, obviously that is an important benefit and needs to be backed up on your landing page. As much as possible, make sure your ad and landing page are consistent.

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3. Mobile. The next thing you should look at in your local campaign is the mobile conversions. In some niches, we have found that we get mobile leads for less than half the cost per conversion of desktop traffic leads. An example is in a case like an injury lawyer where someone might get into a car accident and then do a search on their phone for a lawyer. That is generally a very high-quality lead, and you can have a very high conversion rate if they find you and click on your ad to call you.

 

If your cost per conversion is much higher on mobile, which in some niches it may be, you could consider adjusting your mobile bid down. Or you could turn mobile traffic off completely so your ads do not show on mobile at all.

 

You can see how your mobile traffic is performing compared to your desktop traffic at a campaign, ad group, keyword, and ad level. If you want to view it at an ad group level, click on the “Ad groups” tab in your AdWords account and then click the “Segment” button. From the drop-down menu, click the “Device” option. That will produce a screen where the data for “Computers,” “Mobile devices with full browsers,” and “Tablets with full browsers” are broken out so you can see how each source is performing. (Note: Google currently does not allow advertisers to adjust their bids for tablets the way you can for mobile.) 

 

*****

Copyright © 2016 Entrepreneur Media, Inc. All rights reserved.

This article originally appeared on Entrepreneur.com. Minor edits have been done by the Entrepreneur.com.ph editors.

 

Photo from WordStream

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