To be successful at running pay per click campaigns, it is essential to obtain the proper metrics. Without clear statistics such as impressions, click through rates and conversion rates, you might as well use those dollar bills to start your next BBQ fire.
Pay per click advertisement offered by major players such as Google Adwords and Yahoo! Search Marketing (previously known as Goto & Overture) will show impressions and click through rates of your ads. In addition, both of these paid search services also offer conversion rate tracking as a free option. Use it! When you pay for a click or eyeball to visit to your website, you need to quantify if this eyeball earned you any revenues. There are several methods you can use to track this but the easiest is to use the conversion tracking option within the Google and Yahoo! accounts.
Once your accounts are setup, here is the formula for measuring click through rates:
|
Clicks
|
x 100 = click through rate in percent |
|
Impressions
|
The second step is to measure and quantify your conversions. A conversion does not always have to be a sale of a product or service. It can be an action (filling in a survey or watching a video etc…) or it can simply be viewing your web page. For this article, we will consider a sale as a conversion.
Once you know your click through rate, you can measure the conversion rate by using the following formula:
|
Sales
|
x 100 = conversion rate in percent |
|
Clicks
|
Now, armed with the above formulas, you can begin your pay per click campaigns. If you have taken the time to setup the conversion tracking option in your Google of Yahoo! accounts, these percentages will already be in your reports. It is important to measure statistics down to the level of your key phrases / keywords. It’s great to purchase $100 worth of clicks and know that you made $150 but with fine tuning and really digging into each term, you will know which phrases actually brought in the sale (revenue generating) and which phrases only yielded clicks (non-revenue or low revenue generating).
If you are not tracking your keyword phrases when running pay per click campaigns, you either have lots of money to burn (as mentioned in the opening BBQ comment) or you are already making more than you are spending and am not interested in increasing your bottom line.
As for specific technical details on how to track impressions –> click throughs –> conversions on your own website (in addition to the Google and Yahoo! methods), now that is a topic for another article.
It would seem to me that the click-through rate really doesn’t matter. If you have a high rate on a small number of impressions (yielding, for example, 1000 click-throughs), is that better than a low rate on an extremely large number of impressions (yelding, for example, 2000 click-throughs)? Isn’t the important thing the total number of click-throughs you get and the conversion rate?
Rod,
Click through rate is most definitely important as it dictates the total number of click throughs. When you run PPC ads, you want to create effective ad copy to generate the highest click through rate possible. Not only will this achieve higher placements with a lower cost in many PPC search engines, it will help generate the most qualified and targeted traffic.
If you were able to bring in 1,000 visitors and can optimize your click through rate, from say, 3% to 6%, you have immediately doubled the number of visitors to your offer. The idea of running PPC marketing for sales purposes is to generate qualified leads. And optimizing click through rates is one method to generating more of these qualified leads.
In my opinion, when running PPC ads, you should try to achieve the highest click through rate possible.
For me you cant be all that successful with your PPC Campaign with out good quality content. Thats the basic one to keep in order to be pushing forward with PPC campaigns. Good quality content along with relevant adwords could lead to more visitors and more visitors means more income.