Measuring the longterm value of PPC. Do you understand the return on investment for your search engine campaigns weeks or even months later?

Transcription

1 Measuring the longterm value of PPC Do you understand the return on investment for your search engine campaigns weeks or even months later?

2 Contents Executive Summary: It is tough to say whether this is a white paper or a manifesto. For now, we ll call it an impassioned instruction guide. For years, search engine marketers have struggled with demonstrating the full value of their work. The challenge is that while ad spend decisions are often made on a month-by-month basis, revenue from PPC ad campaigns often don t come until weeks, months or sometimes years later. This whitepaper will walk you through the reasons PPC return on investment figures are so elusive and provide you with tips to evaluate and improve the long-term value of your campaigns. Table of Contents The Chronic Undervaluation of Search Engine Marketing. 3 Questions Worth Asking.. 4 Getting Started Measuring Long-Term ROI Improving Long-Term Effectiveness of Your PPC Ads

3 The Chronic Undervaluation of Search Engine Campaigns To this point, most marketers have looked to clickthough rates to demonstrate return on investment (ROI) for search engine marketing (SEM) campaigns. But when it comes to revenue attribution, this practice becomes a little like performing surgery with a butter knife. So why doesn t the traditional method of measuring work for longterm value? Undercounting Think about the way you navigate the web. Most web usage is messy and non-linear. Whether you re looking for a web service, a financial advisor, or a limited-edition copy of The Hitchhiker s Guide to the Galaxy, you shop around. Some of this shopping around involves clicking on payper-click (PPC) ads, and although you may not buy right then and there, if you later return to the site to purchase that ad should get some credit for initially bringing you in. Misattribution Many marketers measure keyword ROI by a simple dollars-out-dollars-in overlay in other words, tracking the amount of money spent on an ad campaign against the money generated over the same time period. The main problem with this slice-of-time measurement is that marketers often end up comparing apples to oranges measuring this week s ads, channels and keywords against revenue brought in this week when in reality, the revenue you re counting could have originated from an ad that ran months ago. $21 Billion that s the amount of money that goes into Google AdWords alone each year. The question is... what comes out? Why Traditional Methods are Not Enough Traditional methods rely on cookies, which can lose track of customers after they convert and continue to buy over time. There are a few problems with this approach: People don t buy immediately People clear cookies or cookies expire People use different browsers and computers Measuring clicks isolated in a slice of time and overlaying them with your ad spend during that same timeframe doesn t give you any context about what motivated those clicks or whether that budget was well spent. The real value of search engine marketing can only be measured by tracking customer behavior over the long term. In a culture where marketing dollars are carefully watched and return on investment reports are demanded, search engine marketers need better tools for revenue attribution and quantifying the value of a given campaign. 3

4 Questions Worth Asking What revenue did a specific ad, keyword or campaign drive over the long-term? Purchase decisions today are increasingly made over time and after a number of different touch points. To really understand how to invest your ad budget, your analytics need to tie revenue to the channels, content and keywords that first brought the customer to your brand, in addition to those that resulted in an immediate sale. How long does it take my customers to purchase after clicking an ad? What keywords are the most successful at driving quick conversions? Clarify your sales cycle by understanding how long it takes your keywords and campaigns to drive results. Get a better sense of when to pull down underperforming ads and which keywords and landing pages are most successful at driving quick action. What keywords have been connected to repeat purchases? Determine your most relevant keywords by tying SEM acquisitions into the full customer lifecycle. If a search engine ad was the first point of engagement for an individual who is now a regular, repeat customer, that long-term value should be attributed, at least in part, back to the initial touch. 4

5 Getting Started Measuring Long-term PPC ROI UTM Tags and PPC While UTM tags alone wont give you long-term return on investment, they will help you to correctly attribute leads to given campaigns or marketing efforts. Most PPC campaigns don t exist in isolation. Often multiple PPC campaigns are going on at once, directing people to your site from Google, Bing, LinkedIn, Facebook or other channels, at the same time you re bringing in traffic from organic search not to mention the outreach you have done through , direct mail or other campaigns. What Is a UTM Tag? A UTM tag is a series of qualifiers you can add to the end of a URL to help you track where traffic to a page is coming from. The UTM tag effectively creates a different version of the page, distinguishing it from versions pulling traffic from other campaigns. You can track the information you append to the end of the URL through your analytics application; this enables you to tie landing page traffic to the individual campaign that drove it. In Google Analytics, for example, this information appears in the reports under traffic sources. You can set up UTM tags according to the following formula: sourcename When you want to add a tag to the end of a link, simply add a question mark followed by any of the following UTM tags, each of which conveys different information about the traffic source. You can also string multiple tags together on the same URL. Between each subsequent tag, include an ampersand. utm_source= sourcename For sourcename use the source of the click (for example, Google). utm_medium= mediumname For medium name, categorize the type of click-through. For example, if you have traffic from Facebook ads and from your Facebook page, you could differentiate them using the medium names PPC and fanpage respectively. utm_campaign= campaignname This tag helps you keep track of different marketing campaigns that are pointing to the same landing page. utm_term= termname This tag is used to identify keywords in PPC campaigns. utm_content= contentinfo This tag serves to differentiate between two different sets of ad copy. Here is an example of UTM tags in action: Google &medium= PPC &utm_ campaign= holidaysale &utm_term= gift%20ideas Need help with UTM tagging? Performable offers a free UTM builder: 5

6 Measuring long-term ROI (continued) Google AdWords Search Funnels AdWords Search Funnels help you get a better handle on attribution when it comes to conversions. Sometimes, a user conducts a keyword search and sees one of your ads (an impression) but doesn t click it or, they may click the ad, but not convert. If that same user conducts another keyword search within a 90-day period and again clicks on one of your ads, this is known as an assisted conversion. Search Funnels help you gain insight into those assisted conversions that result from more than one search. Historically, Google has just supplied conversion data related to the last ad clicked before the conversion. The problem with this approach is that sometimes it was an earlier ad that first sparked the customer s interest in the particular product or service. Thus, it s worthwhile to see which keyword searches led to that first ad, as well as subsequent ads. Search funnels are currently only available in AdWords, not in Google Analytics. To activate search funnel reports, you must either have AdWords Conversion Tracking running or import your goals or transactions into AdWords from Google Analytics. Also, according to Google, Search Funnel data is currently limited to search ads showing on Google.com, and only cover ad impressions and clicks within 90 days of the conversion. 6

7 Measuring long-term ROI (continued) Performable Keyword ROI Reports Customer relationships often build over several months or even years depending on the conversion you are trying to reach. If you need to go further back than 90 days to get at the lifetime value of your keywords you ll need to either build some custom reports or look into an analytics platform, like Performable, that tracks the complete customer lifecycle over time. Performable gives companies a unified view of customers over time and across channels including , social media, web, mobile, and PPC campaigns. The lifetime value of a given customer or campaign is tracked by creating individual user profiles for each visitor rather than relying exclusively on cookies. Performable shows you the channels, content and keywords that first brought the customer to your brand, then attributes revenue directly to those interactions. The platform also tracks the last interaction a customer had with your brand before making a purchase. Because individual profiles are created, any future purchases or upgrades are also attributed to the original engagement and conversion points. Standard to Performable Analytics is a report on the long-term value and effectiveness of your keywords. This report will track the entire history of your keywords, even if the campaigns run for months on end. Here s an example of a long-term Keyword ROI report from Performable. Note that some of the search terms that didn t initially bring in revenue, ultimately contributed significantly. As customers search and return to convert through other channels months later......the Keyword ROI report continues to show revenue from those acquired through search. 7

8 Improving the Long-term Effectiveness of Your PPC Campaigns WordStream Keyword Tools Some keywords drive tons of volume, and are therefore highly competitive and costly to bid on. Other keywords are practically free, but are searched on so infrequently, they won t deliver a significant number of leads. As a search marketer, your goal is to find the sweet spot in your keyword universe terms that are specific and targeted to your business, and common enough to drive a healthy traffic volume without being so common that you can t afford to rank on them. So if high ROI is what you re after, you ll need to diversify your keyword sources and aggregate a large number of keywords, then test, test, test to find your own keyword sweet spot the terms that give you high click-through and conversion rates for low costs per click and conversion. Worthy keyword sources include: Free Keyword Tools Web-based keyword tools will give you a general idea of the opportunity in a given space or niche. Look for tools that provide some information about monthly traffic volume and competitiveness. Web Analytics Mine the keyword reports in your analytics application to find the keywords that are actually driving traffic to your site. This is a great source of personalized data and insights into opportunities you may not be properly capitalizing on. Paid Keyword Tools A paid keyword solution will offer more depth of access and more actionable data, giving your PPC campaigns greater competitive edge. WordStream s Keyword Research Suite provides extensive long-tail suggestions and value-added organization tools. 8

9 Improving Long-term Effectiveness (continued) Improve Organization As mentioned, Quality Score is a metric that can make a big difference in the profitability of your campaigns advertisers who achieve high Quality Scores enjoy top rankings for much lower costs. In other words, getting better results doesn t have to be a matter of continually jacking up your bids. To set yourself up for better Quality Scores across your account, it s vital to consider organization. Google likes relatively small and tightly related ad groups, so you need to structure your campaigns with this in mind. Maintaining good organization will also make everything else you need to do in PPC (including writing targeted ads and creating relevant landing pages) much easier. Manually sorting keywords into relevant groups can be a chore, so make use of tools to automate the heavy lifting. Tip: WordStream s Keyword Grouper is a free tool that automatically organizes a keyword list into groups you can use in your pay-per-click campaigns: Set Negative Keywords Negative keywords are another lever you can pull to bring down costs and increase ROI. A negative keyword is kind of what it sounds like, the opposite of a keyword it s not a keyword you re bidding on, but a keyword you explicitly don t want to bid on. By creating a list of negative keywords, you re telling Google not to display your ad when someone searches on one of those terms. For example, if you sell kitten calendars, your ads might be broad-matched against the keyword Hello Kitty. Since this traffic won t be relevant to your business, you don t want to waste money on those clicks that won t convert. Setting Hello Kitty as a negative keyword will prevent that from happening. You d be surprised how much of your budget these irrelevant keywords can eat up, especially if you make extensive use of the broad match option in AdWords Google exercises this option pretty aggressively, meaning your ad could by triggered by a totally irrelevant search query. This is why it s a good idea to periodically screen your search query reports and look for negative keyword candidates. Tip: A more proactive way to find potential negative keywords is to use a negative keyword tool, which helps you identify negative keywords before they cost you money. 9

10 Improving Long-term Effectiveness (continued) Track and Test Landing Pages A poorly designed landing page results in fewer conversions, and therefore a higher cost per conversion. An effective landing page needs to: Have a clear call to action that incites the visitor to complete a goal, be it filling out a form or making a purchase. This should be above the fold (the visitor shouldn t have to scroll down to find it.) Be clearly related to the keyword and ad that drove the click be sure there s no disconnect from point A to point B. Load quickly. Avoid clutter. Be persuasive both the language on the page and the visual layout can affect this! You can see how Google AdWords has graded your landing page by signing into your AdWords account and clicking on the button in the status column next to the keyword you want to check. (Remember, the quality of your landing page also affects your Quality Score!) You should be testing different versions of your landing page to find out what combination of ad copy and design work best. Some key items to test include: The phrasing of the call to action (for example, Buy now versus Add to cart ) The title of the page The color, size, and shape of buttons Number of fields in forms Placement of images Need help with your landing pages? Performable offers landing page testing software. Visit to learn more 10

11 Conclusion Today s customer builds relationships with brands over time and across a number of different channels, experiences and touchpoints. The complexity of the modern customer lifecycle can obscure the true value of these channels and marketing campaigns, inflating some campaigns and undercounting the contributions of others. As customer behavior and channels have evolved, a handful of tools have emerged to measure and improve the long-term return on investment of marketing campaigns. By leveraging these tools and following best practices for keywords and landing pages, marketers can invest their budgets more strategically and get more for their investment over the long-term. About Performable Performable is a web-based software platform for businesses looking to optimize their marketing, sales and customer service efforts. Performable offers companies a unified view of their customers across , web, social media and mobile channels. Components of the platform include an easyto-use analytics solution that can be up and running in a day, a marketing automation tool that enables companies to trigger targeted messages based on customer behavior, and a landing-page tool for creating and testing landing pages to improve PPC performance and conversions. Learn more at About WordStream WordStream Inc. is a provider of software and services that help search marketers maximize the performance of their PPC and SEO campaigns, driving traffic, leads, and sales for lower costs. The company s easy-to-use PPC management software facilitates more effective paid search campaigns by increasing relevance and Quality Scores in Google AdWords, automating proven best practices, and delivering expert-level results in a fraction of the time. WordStream also offers a bestin-class Keyword Research Suite for finding and organizing targeted, profitable keywords for use in paid and organic search initiatives. In addition, WordStream provides full-service PPC management and other value-added services to help advertisers who are new to AdWords or strapped for time get stellar results from pay-per-click marketing. Learn more at 11