Tracking & Optimizing For Online Advertising Performance

Transcription

1 Tracking & Optimizing For Online Advertising Performance The scientific approach for achieving more profitable pay-per-click advertising campaigns. January 2011

2 Tracking & Optimizing For Online Advertising Performance The scientific approach for achieving more profitable pay-per-click advertising campaigns. Authored by Hanny Hindi Clickable Search Marketing Guru Ben Seslija Senior Director, Acquisition & Analytics Max Kalehoff Clickable Vice President of Marketing This Clickable White Paper addresses: The Fundamentals of Tracking For Search Key Metrics You Should Know Front-end Metrics Back-end Metrics Online vs. Offline Metrics Conversion Tracking Tools Measuring the Success of Your Facebook Ads Performance Tracking and Reporting 2

3 Introduction In his Definitive Guide to Google AdWords, Perry Marshall suggests that direct mail coupon codes may have been the first form of performance tracking. Advertisers quickly discovered that they could key the order forms with a code, according to which magazine, which advertising copy and offers were used, and get enormously different responses. Within a few decades, this became a rigorous science. Clickable Study on SMBs and Conversion Tracking The purpose of that new science was to attribute revenue to every dollar of marketing spend and to optimize accordingly. For example, order Form A cost so much to distribute, and resulted in such in such revenues. Order Form B cost the same amount, and produced 5% greater revenues. What was the difference? A promotion? A different pitch? A simplified form? The next mailing would be modified accordingly; a new set of variations would be tested; new budgets would be set. And so on. 50% 50% Direct mail or snail mail, as we ve come to know it moved slow, so it used to take marketers weeks or even months to collect response data. Advertisers mailed out thousands of catalogs and placed hundreds of ads, waited for orders to come in, and used sales data to tweak their next promotion. With online advertising, the entire cycle can be repeated every day, on a minute-by-minute basis. Advancements in tracking and reporting online advertising have revolutionized sales and marketing. Billion-dollar advertising businesses like Google Adwords, Microsoft adcenter and Facebook Ads have taken advantage of these opportunities and expanded them. Today, advertisers have the tools they need to build and manage campaigns with greater precision than ever before. Nonetheless, thousands of businesses miss out on this opportunity to grow. In a study conducted by Clickable, it was revealed that 50% of small and mid-sized businesses failed to properly implement online conversion tracking. And among advertisers that did properly implement online conversion tracking, only 15% attributed a value to each conversion event. Why? Some are unaware of the tools available to them. Others have tried to use them, but have been overwhelmed by their complexity. But it shouldn t be this way. SMBs with Conversion Tracking SMBs without Conversion Tracking 85% 15% SMBs who track every conversion event SMBs who don t track every conversion event In this white paper, we will demonstrate how you can overcome the complexity of performance tracking and quantify each stage of your conversion funnel both online and offline. We ll discuss the fundamentals of tracking for search and social media advertising; key metrics that every advertiser should know; tools for measuring online and offline conversions; and best practices for integrating performance tracking metrics into your overall business and P&L reports. Follow our guidelines, and you ll improve your online advertising performance and business profitability. 3

4 Advantages of Online Advertising Today, marketing is a science, driven by data and carefully managed experiments. Marketing is the new finance, said Hal Varian, Google s chief economist, said in an Adweek interview. Just as finance has become more quantitative because of what happened in the 1970s, you ll see marketing do that. The key to this transformation is the rise of granular, comprehensive conversion tracking tools and methodologies. Assigning Revenue to Actual Ad Spend How do you determine the effectiveness of a billboard? a print ad? a TV commercial? Billions of dollars have been spent researching those questions, but the answers are rarely clear. With dynamic performance tracking tools, on the other hand, every dollar of online ad spend can be matched to every dollar of online revenues and even to offline telephone conversions. The contrast with traditional forms of advertising is clear. High Volume of Data Collected on Daily Basis Even in places where traditional advertising has been more scientific such as split-testing in direct mail campaigns marketers have always been hobbled by the same problem: insufficient data. Mark every mailer with a unique code, rigorously track the results, and you re still be limited to a few hundred data points. Moreover, crucial pieces of data may still be unavailable, for example: How many people opened the mailers? How long did they spend looking through the creative? Did they look at every page, or just the first one? With online advertising, particularly search, millions of keyword queries often result in hundreds of thousands of ad impressions, thousands of clicks and hundreds of conversions. There is a high volume of data, and the data are collected at every stage of the funnel. This is the foundation of a true science of marketing. Stages of a Successful PPC Campaign Industry & Competitive Research Taxonomy Development Keyword Selection Metrics Provisioning Preliminary Testing Initial Optimization Full Push On All Networks 4

5 Goal-Based Advertising Broadly speaking, all advertising is goal based : business owners want to make money. With today s performance tracking tools, goals can be defined far more precisely. You can determine exactly how much you want to make for every dollar you spend (by measuring your Return on Ad Spend or ROAS ) or exactly how much you want to spend for each fixed-value conversion (by setting a maximum Cost Per Acquisition or CPA). Goals no longer need to be set at the level of quarterly returns. Today, they can be set down to the penny and by the hour. Disadvantages of Search Tracking Of course, there are downsides to performance-based marketing. Dozens of data points, millions of line items, and more coming in every second traditional advertising may have been significantly less precise, but it was also much less complex. Enter analysis paralysis. Complexity of Data Very quickly, the ability to track every stage of the funnel turned into a requirement. For example: What keyword did a user search for? What ad appeared headline? Description? What was the call-to-action and display URL? What was the ad s position on the search results page? What percentage of users clicked on it? What page did they land on? How long did they spend there? Did they click through to another page? The list goes on... Metrics Overload Not only are there significantly more data points in performance-based advertising; there s significantly more data. Advertisers who have tried taking advantage of this embarrassment of riches are familiar with the flip side: metrics overload. Handling thousands of lines of data is one thing. Millions? Resource Costs (Agency and SEM Managers) Many advertisers have responded to these new challenges by seeking out expert help. Unfortunately, the cost of expertise is often high. And with performance based advertising keyed to specific revenue goals, those costs can t be buried in a generic marketing line item. It s no mystery why so many marketers have struggled with performance-based advertising. However, the benefits of doing it right far outweigh the disadvantages. More importantly, the disadvantages can be mitigated, considerably. Complexity can be reduced; data can be organized; and costs can be brought to manageable levels. We ll explain how. 5

6 The Fundamentals of Tracking for Search Success in performance advertising depends on the careful analysis of specific metrics and precise goals set at each stage in the funnel. Before we discuss each entity and metric, it s important to review some general best practices. Fundamentals To Tracking Track: Monitor your entire funnel Not all traffic is created equal Not all conversions are created equal Know conversion metrics at all friction points Assign cost to each stage of funnel delicious Focus: Avoid paralysis by analysis Establish key metrics that you will observe on a daily basis & use for optimization Automate: Use tools to diagnose opportunities & threats Use tools to save time developing & managing your search efforts Track The Entire Funnel As mentioned, most media channels let marketers track only a small part of the marketing funnel. Advertisers could track ad copy and location targets; sales data from completed conversions; and demographic data collected from customers. Online performance advertising makes far more data available. And all of it can help you grow your business. Install Conversion Tracking to Collect Consistent Data Across Channels Data can only be analyzed after they have been collected. This requires conversion tracking tools. Nearly every major online advertising network including Google Adwords and Microsoft adcenter has its own tracking technology. There are also numerous third-party tools available, each with their own advantages. Moreover, a more complete picture of your advertising performance requires the integration of offline, telephone conversions. The most important criteria for choosing a tool is consistency across networks and channels. Even the same data points including ones as straightforward as clicks or impressions might be tracked differently by different tools. In order to have an accurate picture of relative performance, you should use a single tool to track all of your online and offline advertising performance. Identify Key Metrics at Each Friction Point Even with sophisticated tools and talented marketing experts, it s impossible to optimize every data point. Data must be prioritized. Impressions, clicks and conversion rates usually are most important, followed by bounce rates, timestamps and I.P.-level location data. 6

7 (Side note: You should collect and store all of your data: backups are important, storage is cheap, and later you might find important use for seemingly benign data.) Assign Costs and Goals to Each Stage of the Funnel Tracking every stage of the sales funnel doesn t just mean downloading a pile of data and storing it in Excel. Data must be organized. Specifically, costs and revenue goals must be assigned at each funnel stage. For example: How much are you paying for every second a user spends on your landing page? How much are you paying for each click? How much revenue does each click generate? Once you set each of these parameters, translating millions of lines of data into a few pages of reports will become a far simpler process. Avoid Analysis Paralysis Establishing cost and revenue parameters will help you avoid one of the easiest pitfalls of performance marketing: analysis paralysis. Building a rigorous process to collect, collate and analyze data takes time. But, you should only do it once not every day. Automate When you install a robust conversion tracking system, determine key friction points, assign costs and revenues to each one, and build a consistent optimization schedule. In essence, the daily management process comes down to diagnosing threats and opportunities, and optimizing accordingly. Nearly all of the diagnostics and a significant amount of the optimization can be done for you. Automated bid management tools can be extremely valuable, but the the volatility of advertising networks don t allow you to set it and forget it. You still will need to track performance reports yourself, and recalibrate your goals accordingly. And many processes, such as landing page optimization, are still manual. 7

8 Key Metrics You Should Know Now that we ve reviewed overall best practices for tracking online advertising performance, we can review key metrics. The danger, as any experienced advertiser knows, is that the huge flurry of numbers will just blend into one another. However, there is a simple way to mitigate that risk: identify the specific business decisions that you need to make on the basis of each metric s performance. These can range from adjusting a bid by a few cents to a significant overhaul of your landing pages and campaigns. With performance tracking, there s no reason to make any of these decisions without all of the information you need. For all of the metrics below, we re using definitions provided by the Search Engine Professionals Marketing Organization (SEMPO). You can access it at: Front-End Metrics: Get Them to The Store The first stage of the conversion funnel occurs wherever you display your ads: a search engine results page (SERP), a Facebook news feed, or a content network placement. The goal at this stage is to drive qualified traffic to your site. Imperative: Track or Lose Track Impressions Sales Front-end Metrics Clicks CTRs Costs CPC Avg. Position CPA Conversion Rates Revenue ROI Customer GEO Time of Conversion Demo, LTV, Behavioral, etc. Back-end Metrics Optimize Impressions An impression occurs whenever an ad appears. Conversion tracking tools provide aggregate impressions by entity either keyword, ad, ad group, campaign, or account. At later stages of a campaign, impressions are a quick indication of whether you are bidding enough for your ads to appear on a regular basis. However, your ads should appear regularly if you consistently meet First Page Minimum Bids. 8

9 Impressions are a more useful metric early in a campaign, especially when identifying potentially valuable keywords. When you set your keywords to broad match in the search engines, a wide variety of terms can trigger your ads. A Search Query Performance Report will tell you exactly which ones trigger your ads. Reviewing the Impressions by search term is a precise way to determine which specific keywords are potentially important to your customers. Optimization Tip: Negative Keywords In addition to indicating which keywords you should focus your ad spend on, the Search Query Performance Report indicates which keywords you should avoid. If you are running Broad Match terms, there is a good chance that your ads are being triggered by keyword phrases you don t want to bid on. These might include irrelevant synonyms (e.g., pickle ball for a vendor of pickled cucumbers), or phrases indicating items that you don t have in your inventory (e.g., silver pens for a vendor who only sells black and gold ones). Implement negative keywords and these terms won t trigger your ads. You ll reap all the benefits of casting a wide net with Broad Match terms, without wasting ad spend on irrelevant clicks. Clicks A click occurs whenever a user clicks on an ad. While it is important to maximize total traffic to your site, you will want to minimize unqualified clicks: if you have a lot of clicks but few conversions, you re driving the wrong traffic to your site. These clicks are costing you money, but hurting your profitability. Most likely, this means that you are either bidding on the wrong terms, or misrepresenting your products and services in your ad copy. Pause or revise keywords and ads with high volumes of clicks, but low conversion rates. Click-Through Rate (CTR) Perhaps the most important front-end metric is the Click-Through Rate, or CTR: the percentage of users clicking on an ad out of the total number who see it. Because Google Adwords optimizes campaigns based on CTR, search marketers are very familiar with this metric. However, on a long-term basis, it is much more important to optimize for conversions rather than clicks. If you re optimizing for CTR, you re optimizing based on costdrivers rather than revenue-drivers. After building your Quality Score, shift your focus to conversion rates. 9

10 Optimization Tip: Quality Score The Quality Score is value assigned to each keyword that measures the relevance of your ads to a user s search. Everything from your position on a search results page to your actual cost per click (CPC) depends upon your Quality Score, but the precise algorithm used to calculate it is a closely-guarded secret. Many factors contribute to Quality Scores including the alignment between keywords and ads, and landing page load times but clicks and CTRs are the most important. When you launch a new campaign, drive clicks (and Quality Scores) as high as possible. Though a single-minded focus on clicks will result in lower-quality traffic and lower conversion rates, a high Quality Score will drive down your long-term costs. Cost Cost is a straight-forward metric: it is the dollar amount you spend on advertising. In most traditional media plans, cost is an absolutely crucial metric. Marketers need to keep a careful eye on each line item in order to stay within their budgets. Performance marketing is different: cost is only important as a component of Return on Ad Spend or Cost Per Acquisition. Rather than being restricted to a specific budget, marketers should set revenue goals and maximize ad spend while meeting those goals. This where advertising moves from a cost-center to a profit-center. Average Cost Per Click (CPC) Cost Per Click (CPC) is the average dollar amount you pay for each click. It should not be confused with your Maximum CPC Bid. Max. CPC is the most you are willing to pay for a click on a particular term. Avg. CPC is the amount you have actually paid, and will most likely be lower. Average Position Position is the placement on a search engine results page where your ad appears relative to other paid ads. (It is not relevant to content network ads.) In very limited cases, you may want to bid for the top position. This is useful for branding campaigns, where your primary goal is to establish the relevance of your offer above all others. However, it is rare for the top position to be the most efficient or profitable: most likely, you are paying significantly more than you should. Eye tracking research has shown that searchers generally consider the first three ads on a page as a cluster. The amount of attention they give to these three ads is nearly identical (though there is a significant drop off starting at position four). Therefore, the second and third positions will very likely drive the same kind of traffic as the first. 10

11 More importantly, the first position could cost much more than the next two. Number one is a glamorous spot, which means that your competitors are likely overspending on it, driving up costs. As a result, the number two and three positions may be significantly less expensive, while driving only marginally more revenues. Back-End Metrics: Measure The Effectiveness of Landing Pages and Offers Once a visitor arrives at your landing page, your goal is to convert them. Conversion events can range from something as simple as a page view to something as complex as an e-commerce purchase. There are metrics that are relevant in both cases, such as visits or conversion rate. However, a number of metrics are only relevant to revenue-generating conversions. Imperative: Track or Lose Track Impressions Sales Front-end Metrics Clicks CTRs Costs CPC Avg. Position CPA Conversion Rates Revenue ROI Customer GEO Time of Conversion Demo, LTV, Behavioral, etc. Back-end Metrics Optimize Visits A visit occurs whenever a user arrives at a landing page. Marketers are sometimes concerned when the number of reported clicks is higher than the number of visits to their corresponding landing pages. However, a minor variance between clicks and visits is to be expected. There are a number of reasons for this, including page load errors: sometimes users click on ads but lose their connection or close their browser before the landing page loads and a visit is registered. As Clickable Online Marketing Guru Ehren Reilly has written, this is comparable to the breakage and spoilage of the retail industry: If you ship 10,000 apples from point A, you might be lucky if 9,970 viable apples arrive at point B and make it onto the correct stand in the produce aisle. 11

12 When the variance is particularly high more than 20% this is probably the result of human error in the implementation of the tracking code, or a significant problem that is causing your landing pages to consistently fail. You should review your tracking code, test your pages (especially Javascript code) or contact your IT department. Revenue Revenue, like cost, is a straight-forward metric that has a very different function in performance advertising. It s the second half of that crucial ratio Return on Ad Spend that is at the heart of goal-based advertising. As a stand-alone metric, it is purely informational. Conversions/Sales A conversion occurs whenever a user performs a desired action on your site. Most performance marketing goals should be based on conversions. The value of a conversion can range from a simple counter for page views to a portion of revenue (less sales tax, etc.). For our purposes, we only need to make one distinction: are you generating revenue? If not, you should set a Cost Per Acquisition (CPA) goal; if you are generating revenue, you ll optimize your campaigns for a Return on Ad Spend (ROAS). Conversion Rate The conversion rate is the percentage of visitors to your page who have performed a desired action. (It s not calculated relative to impressions.) If a user has already arrived at your landing page, it means that they saw your ad and were compelled to click on it. Low conversion rates usually mean that your landing pages or offers that are ineffective. This is either because the message on your page is not aligned with your ad copy (in which case you can simply rewrite your ads) or the pages themselves need to be revised. Because you won t be revising your landing pages on a daily basis, you will not be optimizing for Conversion Rate every day either. Review it, and adjust for it, as often as you can revise your pages. Cost Per Acquisition (CPA) If your conversions do not generate revenues directly (such as page views or newsletter sign-ups) you should set a Cost Per Acquisition or CPA goal for your campaigns. CPA is the total cost of an ad campaign divided by the number of conversions. CPA goals are ideal in cases where all conversions can be valued equally. With a CPA goal, you can decide how much you are willing to pay for a page view, a sign-up, or a lead $5? $50? $500? and optimize your campaigns accordingly. Setting a proper CPA does take some calibration. Make it too high, and you will wipe out your margins. Too low, and your total traffic (and revenues) will be depressed accordingly. Return on Ad Spend (ROAS) Online marketing campaigns that directly generate revenue should be optimized for Return on Ad Spend or ROAS. ROAS is the profit generated by ad-campaign conversions, per dollar spent on advertising expenses. (It s not quite the same thing as ROI, because it does not account for your total costs, only your online media costs.) 12

13 Optimizing for ROAS is similar to optimizing for CPA. Similarly, the trick is to find the sweet spot between efficiency and total traffic. High margins could lead to very few total conversions; high traffic to extremely low margins. As always, a calibration phase is necessary at the beginning of any new campaign, with ongoing optimization. Back-End Metrics: Post Sale Optimization Each sale provides data you can use to facilitate the next one. If you don t take advantage of post-sale optimization, you re leaving huge opportunities untapped. Geo-Location Based on I.P. Addresses, conversion tracking tools can pinpoint customer locations with great precision. This information can help you manage your location, or geo, targeting options. Optimization Tip: Geo-Targeting Many advertisers are familiar with geo-targeting as a way to manage local campaigns. If you re promoting a local retail business, or running a national campaign with localespecific messaging, geo-targeting is a powerful way to ensure that your ads only appear to the right people. But, with location-specific performance data, you can also target your campaigns to regions with better performance. Break out locations with higher click-through and conversion rates and you ll drive up your overall Quality Score and drive down your overall costs. Conversion Time The day of the week and the time of day you make a sale are both important data points. While location targeting is a more popular option, week parting and day parting are also powerful search marketing tools. Week parting allows you to adjust your bids by a specific percentage or pause them altogether on certain days of the week. Day parting gives you the same flexibility at 30-minute intervals. These tools are only effective if you have accurate data about when your conversion events occur. With that information, you never need to waste ad spend on days or at times of day when your ads have historically underperformed. Customer Demographics While Google Adwords and Microsoft adcenter (Bing) are implementing tools to provide more demographic information to marketers, demographic targeting for search is still limited. However, Facebook Ads provide a wealth of demographic details about users who see and interact with your ads. As with location targeting, data-driven demographics are much more valuable than your initial guesses about customer distribution. 13

14 Online vs. Offline Metrics So far, we ve focused on metrics relevant to online conversions. But many customers still prefer to conduct their business over the phone with a real human being. This is especially true of high-consideration products that usually include a sales interaction, or businesses with a large customer service component. Phone conversions are usually much higher quality than online conversions, and present far more opportunities for up-sells. But phone calls also present unique challenges to performance marketers. In order to incorporate offline conversions into your reports, you will need call-specific tracking tools. Imperative: Track Different Conversions Quality: Phone vs. Online Phone leads/sales are usually higher quality Easier to submit form than call More intriged with your offering vs. Revenue: Phone vs. Online Easier to convert/up sell Direct interaction with the sales rep Easier introduction to other products/services Cost: Phone vs. Online Greater human/technology interaction Sales rep cost Technology implementation Call-Specific Metrics Nearly every front-end metric that is relevant to purely online campaigns is relevant to campaigns that end with a call. However, some metrics further down the funnel might not be applicable to campaigns that end with offline conversions. (A click-to-call mobile campaign, for instance, won t have landing page-specific metrics like bounce rate. ) The metrics below are unique to campaigns with offline conversions. Number of Calls Number of calls is as simple as it sounds. However, depending on the type of campaign you are running, you will have to account for it differently in order to make a useful comparisons with online conversions. If you are running a click to call campaign (where the phone number appears in the ad), then calls occur at the level of clicks in online campaigns. If you re phone number appears on a landing page, a call may qualify as a partial conversion. 14

15 Call Duration The average duration of a call is one way to quantify the effectiveness of your sales force. If users are only spending a few seconds on the phone (and not buying anything) your salespeople need to revise their openings. If the average call time is too long, you have to craft a more streamlined pitch. Caller Location and Time of Call Caller Location is comparable to geo-location in online campaigns; Time of Call is corresponds to Conversion Time. They can be used to optimize your campaigns in the same way as their online equivalents. Caller ID Customer phone numbers can be stored for follow-up messaging with customers and prospects (much like s collected on a web form). Many call tracking systems can help you manage your sales team. With a purely online campaign, you can manage everything yourself: if you have high bounce rates and low conversion rates, edit your landing pages. The same doesn t hold for campaigns with offline conversions. Short phone calls that don t convert? Your sales team isn t working as well as it could. A good phone tracking system won t only indicate that these problems exist; it will help you solve them by providing a recorded archive of your calls. By listening to the recordings, sales leaders can identify specific problems, retrain staff, and help conversion rates grow. Finally, there are numerous post-sale metrics that you should collect as well, including up-sells, qualified leads and number of products sold. Those metrics will be specific to your Customer Relationship Management tool (CRM). 15

16 Conversion Tracking Tools Now that you know what you need to track, you need a tool to facilitate the process. Most performance tracking tools work the same way. First, you install a tag on your landing and conversion pages, triggering the tool to collect information based on the referring URL and cookies in the user s browser. Most tools will also tag the destination URLs of your ads with details about keywords, ad groups, and so on. It sounds simple enough, but there are a huge number of conversion tracking tools on the market. Each have their advantages and disadvantages, but a few simple criteria will help you find the right one. Comprehensiveness The first thing you need in a tracking solution is comprehensiveness. You need to collect data for a metric before you can optimize for it. (If your conversion tracking tool doesn t provide bounce rate figures, for instance, you won t be able to update your landing pages if users consistently leave after a few seconds.) Carefully review the specs before you implement a solution, and confirm that it includes every metric you re tracking or planning to track in the future. Consistency Every tool measures data slightly differently. As we mentioned in the section on key metrics, for instance, there will always be a slight variance between clicks and visits. There is another consideration you need to keep in mind: different tools may track the same metric differently. If one conversion tracking tool logs a visit before loading the rest of the page, and another logs it after the page has loaded completely, they aren t tracking exactly the same thing. If you have different tools implemented at the same time, you won t be able to accurately make relative comparisons across networks. Which brings us to the final consideration. Cross-Platform Compatibility The only way to assure consistent data is by implementing one tool that tracks performance across all platforms. Savvy marketers need to know which networks produce the highest-quality traffic. Using one tool to track conversions on multiple networks will tell you everything you need to know. Do some products sell well on one network, but poorly on others? Is the quality of each network s traffic different depending on the day of the week? Are there geographic variations based on network? With answers to questions like these, you ll be able to distribute your spend across networks with scientific precision. These three criteria will help you choose a robust and effective online performance tracking tool. The next step is to expand your tracking to include offline conversions. To do so, you ll need to consider issues unique to call tracking tools. 16

17 Static vs. Dynamic Tracking Systems There are two types of call tracking systems: static systems and dynamic ones. Static Systems use a small number of phone numbers, are easy to set up, and allow you to track basic performance at the top of the funnel. They have the added advantage of being cheap and easy to set up. A comparison with dynamic systems, however, demonstrates their relative disadvantages. Dynamic Systems use a large set of phone numbers that allow you to track performance across the entire funnel. Different keywords, different ads and different landing pages can be associated with different phone numbers, giving you a clear sense of exactly what is driving your revenues. Of course, that optimization comes at a price. Dynamic systems are more costly than static ones. If the additional optimization makes up for that cost, it s worth it. But there is only one way to determine whether that s the case: incorporate the cost of your call tracking systems into your online marketing costs, and calculate your CPA or ROAS accordingly. Tools For Tracking Offline/Phone Conversions Call tracking tools should ideally serve two functions. First, they need to provide performance metrics with the precision and granularity of online tracking tools. Second, as we mentioned above, they need to help your sales leadership optimize their team s performance. Even if you re not ready to invest in a full-scale, dynamic call tracking system, static call tracking is still superior to no call tracking. You won t have the granularity of online performance tracking; static systems only provide a few phone numbers not enough to assign a different number to each ad group. Nonetheless, you ll have enough data to track performance at the campaign level (if you have a limited number of campaigns), which will still allow you to perform basic optimization. With a dynamic tracking system, you ll have enough phone numbers to assign a different one to each ad group. Keep your ad groups small and focused, and this will give you all the flexibility you need. But, as we mentioned above, dynamic tracking systems are more costly than static ones. Only implement them if the additional optimization makes up for the additional costs. 17

18 Measuring the Success of Your Facebook Ads We ve already discussed the importance of performance tracking to search advertising, but the same rules hold true for social media advertising, including Facebook Ads. Above all else, don t run paid ads on social networks if you re not measuring conversions even if your primary goal is to generate likes rather than to generate revenues. Tracking Conversions Within Facebook For ads that have a page within Facebook, provides you with basic tracking metrics, such as impressions, clicks, click-through rate (CTR), and likes. Facebook also provides Social Context metrics for paid ads. When users Like an ad, members of their direct networks will see messages below it such as Jane Smith likes this indicating its relevance to their friends. Social Context metrics allow you to see what percentage of your ads include this additional promotion. Social Context metrics include: Social impressions: ad impressions that include social endorsements. Social %: The percentage of ad impressions that were delivered with social endorsements. Social clicks: clicks on ads that originated from an ad with social endorsements (e.g. a social impression) Social CTR: social clicks divided by social impressions. Because these metrics are relatively new, there are few data yet regarding the impact of social context on advertising performance. As more advertisers track these figures, we ll learn more about social context, and how to take advantage of it to improve performance. Tracking Conversions Outside of Facebook To track conversions to pages outside of Facebook, you ll need to have access to a third-party solution. Clickable Conversion Tracking, for instance, provides the same consistency for Facebook Ads as it does for search advertising, including Google Adwords and Microsoft adcenter (Bing). Achieving Success with Facebook Ads If you re new to Facebook Ads, or if you re looking for new ways to drive revenues and grow your business with social media ads, please consider our recent white paper, Growing Your Business with Facebook Ads. We discuss ways that online advertisers can maximize their investment with Facebook Ads, including Facebook Ads basics, and best practices for fan pages and paid advertising. You can download the paper at or contact your Clickable Solutions Expert for a hard copy. 18

19 Performance Tracking and Reporting Tracking and reporting go hand in hand, but different types of reports serve different purposes. Some are for your own use: daily, weekly, monthly and quarterly reports that will help you optimize your campaigns. Others are performance reports for your colleagues and managers. Investing time in organizing and building a full set of reports will pay significant dividends in the future, simplify account management, and save you time. Management Reporting The first reports you build will be for your own use. In determining which reports you need to build, one consideration should trump all the rest: every report should help you make specific business decisions. Each report should have a different time interval: either daily, weekly, monthly, or quarterly. What you include in those reports should be driven by optimizations that you will make at each interval. Daily: The quintessential daily search marketing task is bid management. There are a number of reasons why bids might need to update your bids. These can include changes to your average positions or Quality Scores. Or, they might be the result of market factors, like new First Page Minimum Bids or new competitors bidding on the same terms. Whatever the reason, effective bid management is a daily process. Weekly: While you may need to change your bids on a day-to-day basis, you aren t likely to update your keyword lists or revise your ad copy as frequently. As a start, make it a weekly task. To support that task, make sure your weekly reports provide you with the information you need to effectively manage keywords and ad copy. Are your CTRs low? Rewrite your ads. Are your pages relevant to the users keyword searches? Or are they bouncing off your pages after a few seconds? Adjust your keyword lists accordingly. Monthly: You can edit keywords, bids and ads directly in the networks interfaces, or in the tool you use to manage all of your online marketing in one spot. Editing your landing pages is more complex. Even with a robust content management tool, you ll want to test and QA any changes before pushing new pages live especially if they contain dynamic components like forms or conversion scripts. As a result, you won t be editing your landing pages every day, or even every week. Most likely, it will be a monthly process at best. Make sure your monthly reports reflect that fact. Quarterly: Quarters are good times to step back, reflect on long-term performance, and (when necessary) make major changes. If you need to overhaul your accounts, build a new set of campaigns, or introduce new networks and marketing channels, the first weeks of your fiscal quarters are good times to do it. This is when you ll need your most comprehensive reports. 19

20 Executive Reporting Your executive reports are going to be very different than your management reports, for one reason in particular: your coworkers and managers are not online marketing experts. In order to communicate your success to your colleagues, you will need to translate it into metrics that they understand. Executives are often resistant to new or untested ways of doing business, and there are still thousands of marketers, advertisers and executives who have never tried online marketing in their own businesses. Understandably, those business leaders are going to be resistant to trying something risky or new. Put a report in front of them that s filled with Quality Scores and CTRs, and you ll only alienate them further. In the section above on Key Metrics, we pointed out that Cost and Revenue are only important to online marketers insofar as they are components of two crucial ratios: Return on Ad Spend (ROAS) or Cost Per Acquisition (CPA). If you re meeting your ROAS or CPA goals while maximizing revenues, you re doing something right. But to communicate that success to your colleagues, you will need to translate those ratios back into what they understand: money in vs. money out. Cost and Revenues may not be the metrics most relevant to your day to day operations, but they are the metrics most relevant to bottom-line minded business leaders. As you already know, performance-based online advertising presents is the greatest marketing opportunity to come along in decades. Now, you need to convince your colleagues. Nothing will do this more effectively than demonstrating performance. Translate your reports into the same metrics being used by other business lines and channels, and your colleagues can make the comparison themselves. More often than not, online marketing will come out on top. 20

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