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How to track the performance of your paid advertising

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How to Track the Performance of Your Paid Advertising

Launching a pay-per-click (PPC) campaign can require time and resources to ensure it is setup correctly, however, it doesn’t end there.  You need to continuously track the performance over time, measuring and analysing metrics that are important to your business.  In this article, I will cover the key things to consider when measuring the performance of your campaigns.

Setting up conversion tracking in AdWords

First and foremost, you need to make sure you have conversion tracking set up on your paid advertising accounts whether you are using Google AdWords or Bing Ads.  The first step is to consider the purpose of your paid advertising.  You may want to generate leads, sales, PDF downloads or views of your latest video, but it is important to define a goal that will allow you to judge the success of your paid search campaigns.

Once you have decided on a goal, you need to set up conversion tracking so that AdWords can start recording goal completions.  You can get detailed instructions on how to do that from Google here.

Linking your account to Google Analytics

Once you have conversion tracking set up in AdWords you should also link your AdWords account to Google Analytics.  This allows you to import analytics goals and eCommerce activities into your AdWords account.  It also allows you to import Analytics objectives such as bounce rate, average session duration and pages per session into your reports on AdWords, providing greater insights into your reporting.

Google provides instructions on how to do this here.

Choosing the right metrics to measure performance

When it comes to measuring performance, you need to make sure you are looking at the right metrics to make informed conclusions.  The metrics that are most important for your business objectives will vary from business to business depending on your goals, but here are a few key metrics to keep an eye on in your account:

Click-Through Rate

Click-Through Rate (CTR) is the number of clicks divided by the number of impressions.  CTR is an important metric to measure as it indicates how relevant or appealing your ads are to the user and it plays a big part in determining your quality score.  Google assigns a quality score to a keyword each time it is triggered by a search and the resulting score is a factor in calculating what position your ad is in the search results and how much you pay per click.  If you see low CTRs in your campaign look at your ad copy.  Is it relevant to the keywords in that ad group? How can you make your ad stand out? Bear in mind that your CTR will be affected by your average position but you do not have to always be in position one to get a good CTR.  A well written and relevant ad lower down the page can still achieve a higher CTR.

 How to Track the Performance of Your Paid Advertising

Conversion Rate

When looking at the performance of your account conversion rate is one of the most important metrics. Conversions are the end goal for your business and if keywords are getting clicks but aren’t getting conversions then you are wasting money. It is better to look at the conversion rate column rather than just conversions as this will help you to better compare the performance of a keyword with other keywords.  If you are analysing conversion rates keep in mind how many clicks the results are based on.  A keyword might have a conversion of 50% but only have 5 clicks which is not a statistically significant result.

Quality Score

Quality score is an important factor when it comes to achieving the highest position in the search results and the lowest cost-per-click but don’t solely rely on it when judging the performance of your keywords.  The factors that go into calculating the quality score (CTR, ad relevance, and landing page experience) are all important things that you should always be looking to improve but if you have a keyword that is performing well in terms of CTR, conversion rate and is profitable for your business, don’t worry too much if it has a low-quality score.

 Bounce Rate

Bounce rate is the percentage of users that have clicked on your ad, landed on the page and then left without visiting any other pages on your website.  How important this metric is to you depends on your goals.  If your goal is to get a customer to visit a product page then go onto a number of other pages in the checkout process, then a high bounce rate is not desirable, but if you want the user to click on your ad which takes them to a piece of content such as a blog post a high bounce rate is not necessarily a bad thing as the user may have clicked on your ad, read your whole blog post and then left your site thoroughly satisfied with the content they viewed.

Cost-Per-Acquisition     

Cost-Per-Acquisition (CPA) is another very important metric that determines whether your PPC account is profitable or not.  What your CPA should be depends on your business goals and you need to calculate this before you start analysing your results.  If a keyword has a high CPA consider reducing the bid.  Also, look at the search terms that are triggering that keyword, is your CPA higher at certain times of the day or on particular days of the week?  Thanks to the detailed reports that AdWords provides it is possible to look into a number of different areas and make bid adjustments accordingly.

Choosing the right time frame to measure performance

It is important to consider the time period you are looking at when tracking the performance of your paid search campaigns.  If one of your top keywords looks like it is performing badly one week this could be due to many factors and a week’s data is not enough to make any conclusions.  I would suggest looking at at least 30 days of data before making any judgments.  Even then you need to consider how many clicks or impressions you are basing your decisions on.  For very low spending accounts that don’t get a lot of clicks each month it can be hard to make any conclusions as there is just not enough data to go on.  By all means, do not persist with a keyword that is consistently not converting with the hope that one day it will pay back your faith in it.  Just keep in mind the number of clicks or impressions you are basing any decisions on.

Using the search terms report

The search terms report can be found by clicking on the keyword tab and then on search terms.  This report shows you what search terms users are searching for and what search terms trigger your ads regardless of whether they get clicked.  If your account has been running for a while and you haven’t viewed the search terms report you might be in for a shock, particularly if you have some broad match keywords.  You will no doubt find a number of search terms that you would not want your ads to be showing for, skewing your data and causing your account to have lower click-through-rates, higher bounce rates, and lower conversion rates.  If you see a search term that you want to stop showing for simply click the check box and click on “add as a negative keyword”.  You can then choose to add this particular search term as a negative keyword at campaign level or just at the add group level.  You can also choose whether to add the negative keyword as exact match or phrase match.  Be careful when adding negative keywords as phrase match as this will block any search term that contains that phrase with anything before or after it.  Adding phrase match negative keywords can be useful and save you a lot of time if there is a particular phrase you never want to show for.  For example, suppose your business sells shoes but you do not stock blue shoes.  If your ad appears for the search term “I want to buy blue shoes” you would add that as an exact match negative keyword [I want to buy blue shoes] but you could also add blue shoes as a phrase match negative keyword “blue shoes” to avoid any potential search terms that contain that phrase in the future popping up in your search terms report.  This is a simplistic example, but using your search terms report the right way can save you time and money and result in a more accurate measurement of performance for your campaigns.

Devices

Technology is constantly changing and the way we browse and shop online changes as a result.  When tracking the performance of your account it is important to consider how users interact with your website from different devices.  Click on the devices tab on AdWords and you can easily see how your traffic is split between desktop computers, mobile phones, and tablets.  This can be very useful information and by making changes based on this data can really improve your results.  For example, do you get most of your traffic from mobile but this has a lower conversion rate?  This may be due to a number of reasons such as your site isn’t optimised for mobile and the shopping experience is poor causing people to not purchase whilst on their phone, or your product or service is a more considered purchase and is not something people would generally buy from their phone.  Whatever the reason, if mobile is not performing well for you, you can make bid adjustments specifically for people who are using a mobile to optimise the performance of your campaign.

Looking at demographics

AdWords also allows you to measure performance based on demographics such as age, gender, and even household income.  If your product or service is targeted at females you may want to make bid adjustments to restrict traffic to your website from males.  Again, be careful when making a decision about performance using demographic data.  If people aged 18 – 24 have a lower conversion rate stop and think why this might be before making any decisions.  Is it a consistent trend over time? Is there enough data to support this conclusion?  The phrase “correlation does not imply causation” is very apt here but at the same time this data can be very useful and a few well-considered changes could really improve the performance of your campaign.

In summary

As you can see, there are a number of ways to judge the performance of your paid advertising accounts.  AdWords or whatever paid advertising platform you are using can provide a number of reports and insights that can help you to greatly improve your results, but be careful when making decisions based on this data to ensure you don’t make any mistakes.  Always question the data and consider how relevant it is before making any changes.

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Andrew works as a PPC Executive at Nominet. Passionate about all things digital, Andrew started out working in SEO before moving to PPC and has over 4 years’ experience working in digital marketing.

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