Google AdWords entered advertising vocabulary more than 15 years ago and although much has changed over that time, this platform, as well as, pay per click (PPC) advertising still has a lot to offer. Billions of keyword auctions occur monthly on numerous channels. Even though the technology has improved, and marketers have a large set of capabilities, search marketing remains a critical part of modern advertising campaigns. Managers of advertising campaigns who wish to maximize the use of their PPC ads must keep certain criteria in mind as they continue to take advantage of Google AdWords.
A. Is There a Means of Measuring the Benefit of Any PPC Investment?
There are considerable metrics in any PPC effort. These permit assessment of conversions, click through rates, and quality score performance. It is important to bring together PPC specific metrics and the revenue performance of any PPC activity. A manager can see substantial gains in PPC metrics but discover that revenue performance is not as good as it needs to be. It helps to be able to assess the revenue impact.
One way of doing this is observing the ratio between any opportunity pipeline the PPC channel creates and the money invested in the PPC campaign. You can think of it as a pipeline to spend ratio. There are several ways to determine if there is a healthy ratio and it depends on the line of business. For example, a performance benchmark can be a pipeline to spend ratio of 10:1, which indicates that for every pound sterling invested in PPC, ten are generated in pipeline.
The value of the pipeline to spend ratio is substantial. It can track the revenue impact of the marketing efforts and effectively determines the efficiency of your marketing. By concentrating on the pipeline instead of closed revenue, you can see how marketing is positively helping sales organization with the best marketing qualified leads. Closed revenue is not as good because monitoring it means you are looking at the sales organization at closing opportunities instead.
B. Are Budget Allocations Going to the Right Place?
The pipeline to spend ratio is a way of measuring the benefit of the total PPC budget allocation, but you can go a little bit deeper. Knowing what ad groups or campaigns are influencing that pipeline will allow you to spend your budget money more effectively. An example would be if one ad group achieves a higher cost per conversion and at the same time generates twice the amount of pipeline as another group, it makes more sense to increase investment in the former than in the latter.
It is not difficult for a campaign manager to prioritize where the money is going in the PPC effort. When it comes to the distribution, there are three suggested priorities for the cash.
#1. The campaigns that have always generated a substantial pipeline
#2. The campaigns that, while not producing a substantial pipeline, have ads which are critical for product, brand, or industry perception
#3. The campaigns that do not generate good pipeline and are not critical for any perception.
Following those simple rules will assure that any budgeted money is effectively spent.
Create A Procedure for the Best Results
PPC requires continuous analysis and optimization. A manager is going to need to perform a lot of analytical work and do it on a routine basis. Fortunately, the PPC strategy is blessed with a considerable number of measurement options. You can use any of them to get a better idea of the overall health of your PPC efforts. Once you have in place a procedure for distributing budget money to the right places and discovering whether your return on any investment is positive, you have the information and the process needed to press forward with optimization efforts and also find ways to improve the return on investment.
It goes without saying you also have a better understanding of your entire PPC campaign. It is unfortunate but too often managers will spend money chasing the wrong metrics and making decisions that do not provide optimal results. You can avoid that accident by a better understanding of budget allocation and having a solid measure of the overall campaign benefit.