Are you running a pay-per-click campaign and have questions about whether or not it’s working? When clients ask me how to evaluate a PPC campaign, I generally give the conversion rate as the short answer. For most clients nothing is more important than generating sales or leads. Although using this rate as the sole indicator of performance makes sense in theory, PPC account managers and clients would be making a mistake by ignoring other performance indicators. Here are the 4 reasons the conversion rate shouldn’t be the only way performance is evaluated.
4 Reasons Conversion Rates Don’t Tell the Whole Picture
1. Not All Sites Can Accurately Track Conversions
Not all websites have the functionality to properly track conversions. Some websites have constraining content management systems or lack a webmaster with the ability to add tracking code to buttons or thank you pages. When a website has a limited ability to track conversions it may be more effective to focus on the behavior of the paid visitors such as the average time spent on a page, or as I outlined in a recent blog post; the click-through-rate of the pay-per-click campaign itself.
2. The Majority Of Conversions That Begin Online, Finish Offline
Consumers don’t always finish the entire conversion process online. Site visitors may instead decide to convert offline via phone call or by visiting the business in person. Google found that as many as 80% of shoppers will research online before making a purchase, however only 44% will finish the entire process online. Additionally, when a product or service costs more than $500, only 10% of consumers that begin searching online actually complete the full purchase online. Here is an infographic from Google showing the likelihood that consumers finish purchases online or offline.
3. Site Visitors May Not Convert Immediately
Not all purchases are made in a day. When buying a house, hiring a consultant, or making a major purchase the majority of consumers tend to shop around and take time to think about their future purchases. Conversions from Google Adwords can only be linked to a paid click for up to 90 days (depending on the chosen conversion window setting). This means that a paid click may not be directly linked to a future purchase if it’s finally made months later.
4. Direct Conversions Are Not The Only Valuable Action
Did you know that 69% of Canadians say that internet searches introduced them to new brands? Pay-per-click gives you the opportunity to reach new consumers that may not be efficiently reachable through traditional marketing. When optimized correctly, pay-per-click provides a targeted and cost-effective method to introduce targeted consumers to your brand. Creating a new fan of your brand may only be linked to 1 conversion; however fans may make multiple future purchases as well as introduce new people to your brand by word of mouth.
How Should I Value Conversions?
Since there are many valuable actions that can’t be accurately tracked as conversions, the conversion rate should instead be seen as the floor for potential value coming from a pay-per-click campaign. In addition to the guaranteed leads/sales linked to the pay-per-click campaign, there could be several other valuable actions such as increased brand awareness and fans, and offline conversions such as phone calls or business visits.
Although the conversion rate and cost-per-conversion rate should usually be your main focus, PPC account managers would be making a big mistake by ignoring all other relevant information. To help estimate the overall effectiveness of a pay-per-click campaign, you should take into account other factors such as site behavior, and the click-through-rate of the PPC campaign. Here’s a blog with 4 reasons the click-through-rate matters in PPC internet marketing.
Mike Granger is an internet marketing mechanic at The Marketing Garage; an award-winning company of internet marketing and branding consultants based north of Toronto. Find out how a proven diagnostic approach can help you stop guessing and start knowing when it comes to your marketing. Visit www.TheMarketingGarage.ca
