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Getting to grips with PPC measurement?
Search campaign tracking can often be unsophisticated, working on a last click model, measuring revenue, transactions, ROI etc.
However, some more advanced marketers measure a bigger variety of variables, including profit margin, lifetime value and phone contacts.
Let's look at the different levels of PPC campaign tracking.
Of course, these aren't mutually exclusive - a combination can be used for performance objectives.
Reach, or awareness, is defined as the number of ad impressions generated by the campaign (simply the number of times an ad is seen).
This number can be given at a keyword level, an ad group level or for the whole campaign.
Though clicks and conversions are of course more important than mere impressions, this metric is still instructive of campaign scale.
- Ensure impressions from display networks are not lumped in with search impressions when conducting keyword analysis.
- One search can generate mutiple impressions, either from multiple pages of the search results, or from a user hitting back and returning to search results from a destination page.
- Bots and tracking tools will create some 'artificial searches and impressions'.
Paid search impressions no longer include the right hand side of Google's desktop search results.
Volume, AKA number of clicks or website visits, is the basic measure of campaign effectiveness.
The paid search platform you use (e.g. AdWords) will report on clicks, and visits can be measured by linking activity to your analytics package (e.g. Google Analytics).
Tips - clicks do not equal visits
- Analytics will often register one visit if a user has clicked an ad twice within 30 minutes, without closing her browser.
- AdWords removes certain clicks from its results, such as repeated clicks in a short time from the same user (suspected as fraudulent).
- If a site is slow to download, users may abandon after clicking, before tracking tags have been loaded.
3. Click quality
Otherwise known as conversion rate - the proportion of visitors from search that provide a defined outcome on a website (data capture, sales, etc.).
This entails goal tracking within an analytics package, either tracking page impressions of unique URLs or using tracking code added to a website button.
- Conversion rates can be expressed per website session or per unique visitor.
- Page or keyword bounce rate is often used to show click quality. This is the proportion of visits that don't explore any further web pages (they bounce off the first page). High bounce rates are, however, not always a bad thing.
- Conversion can be separated out, to track incremental success. For example, sales can be split into 'add to baskets', 'checkout' and 'sales'.
- As conversions are often influenced by multiple marketing campaigns (across numerous visits and from various marketing channels), campaign tracking codes and tagging can help to properly attribute value.
Conversion rate could be 'add to basket' rate, as well as 'sale' rate.
4. Cost effectiveness
Cost effectiveness is reported by search networks in the form of CPC. However, cost per acquisition (CPA) is more instructive - the total ad spend per goal.
Advertisers should know their allowable CPA and CPC, calculated from knowing conversion rates and the profit required from the campaign.
- Of course, limiting CPA implies you can accurately track the success of paid search. If you're not tracking phone calls from PPC, there is a chance that CPA can be set artificially low.
5. Return on investment (ROI)
Like any other channel, ROI is simply a percentage return (profit over cost).
As marketers may not know the profit margin on the goods they sell, ROI is more often calculated using simply PPC revenue. This gives an indication of the success of advertising.
6. Branding metrics
The impact of improving reach is also felt on the brand. This is particularly relevant in B2B marketing and at bigger companies.
It's difficult to measure uplift in brand favourability for PPC campaigns in isolation. Google does use a Brand Uplift Surve yto try to measure this effect in display advertising, however.
There are also studies that have shown increases in brand awareness as search rankings increase.
7. Lifetime value
Calculating lifetime value requires sophisticated modelling.
Assumptions are made about repeat purchases, future spend and referrals of new customers.
For example, a car insurer might find that visitors who purchase after being referred using the phrase ‘car insurance’ are less profitable in the long term than others who type phrases with more keywords e.g. ‘no claims discount car insurance’.
More for PPC beginners - A beginners' guide to KPIs, budgets and agencies
Or, see the Econsultancy Paid Search Best Practice Guide for everything you need to know about PPC.