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Optimising your SEM Account – Relationships of Metrics

I’ve been taking a number of our interns through optimising SEM campaigns earlier today and one thing that I noticed they didn’t grasp straight away was that there are relationships between all the stats within Adwords and how changing one might affect another.

Now some relationships are pretty clear:

Click through rate (CTR) – The relationship between the number of impressions your ad recieves and the number of clicks you get on those ads.

Cost per click (CPC) – The relationship between you ad spend and the number of clicks you have achieved.

But there are deeper relationships that have very real reflections on the performance of an account. For example what effect does your average position have on your click through rate? What effect does your average position have on your conversion rate? Why is it that you might have a very good click through rate and conversion rate but your cost per conversion is too high? These are all really good questions and many have had studies looking into them (not what we are discussing here) but there are some general rules and understandings that you should take into account when optimising an account.

Tim one of my interns asked me how can we optimise a campaign to reduce our cost per conversion. His first response was that he already understood that negative keywords are a great way to cut it down but couldn’t see how else you could optimise your cost per conversion without adjusting the website.

Answer:

The perfect example to look at in this case is optimising a single adgroup with a single exact match keyword within it. What elements are you able to change that can affect the conversion rate?

1. Change your bids – If your cost per conversion is too high try lowering your bids, if this doesn’t affect your conversion rate then you should see a reduction in the cost per conversion. It should be noted that this could reduce your overall clicks – but if this makes the keyword profitable then you have struck a winner! Conversely if your average position is too low you mightn’t be getting your ads in front of the right users. By increasing you bid you might improve your average position and therefore the visibility, improving the level of traffic you may receive and also possibly the quality of traffic.

2. Change your messaging (minimising click through rate) – Whilst you can’t physically change your click through rate if you alter your ad copy to change the messaging then your click through rate will also change. Whilst it’s great to have a high click through rate, if part of those clicks are irrelevant then you are reducing your conversion rate post click. So lets find a way to stop getting those people to click through in the first place. A great example is to simply negate clicks from people who are merely window shopping – i.e. put pricing in your ads, therefore those who click on them are aware of what things are going to cost and those who feel it too expensive are less likely to click. By reducing the overall clicks you are reducing your cost and if you still achieve the same level of conversions your cost per conversion will be cheaper!

3. Change your messaging (preparing users for what to expect) – Similar to minimising click through rate, users who click on ads mightn’t be getting what they expect when they arrive on the site, through preparing users and guiding them before they even get to the site there will be fewer steps for the user post click. With fewer steps for the user before a conversion, a user is less likely to drop off and thereby improve your conversion rate. This can be really small and intricate changes. Simply matching the search language within the ad copy has a huge improvement in uptake and understanding and this can translate easily into conversions.

Tim’s other question  was how you would optimise a campaign to improve the level of spend (whilst retaining your target cost per conversion). Again a really good question.

Answer:

This has a number of elements to it, but there are some core things to understand:

– Increasing your bids without strategy behind it may just increase your costs with no improvement in your conversion rate and cost per conversion.

– Whilst the google keyword tool is a great place to get an overview an idea of what sort of terms could be relevent, the most accurate and granular way to get real user search terms is from your analytics account or from a broad matched campaign where you then look through the search term reports.

The Method:

1. Expand your keywords – If your campaign is comprised of phrase and broad match keywords then you are inevitably going to be showing up for terms that are relevant for you but aren’t an exact match for the keywords you are using. Look through your old search term reports and identify gaps and keywords that you are phrase or broad matching that could be added to an adgroup or create a new on for them.

2. Watch your match types – Quality score is something that many people overlook. Whilst you may exact match for your phrase match keywords it’s always better to have an exact match keyword matching up exactly with the search term. Google percieves you as being more relevent as you are targeting that exact keyword and as a result you may receive the grace of Google through showing more often for that search term (maximising your impression share and therefore your potential and actual clicks) and also paying less – something that we are all happy with! The best strategy I have seen is for every phrase match keyword, have an exact match. When you really start optimising a campaign you might even look at doing a broad match of every variation of keyword and optimising them using the search term report and negative keywords to limit the irrelevant terms you show up for, whilst pulling out new search terms that could then become keywords within your campaign, expanding your campaign’s reach.

3. Optimise your creative – If everything about your keywords are right it might just be that your ads are scaring relevent clicks away. Review your ads and try out new variations. If you hit a winner with new variations you might expand your CTR without any effect on you cost per conversion and conversion rate, all this would mean is more conversions and more spend for the account!

Hopefully these about questions from one of my interns helps answer some of your own as well and helps you thing about strategies for optimising your campaign.

 

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