How to Perform Full Funnel Conversion Rate Optimization Optimizing Your Audience Targeting, Ad Content, Landing Page, and Post-Click Experience 1352 1011 660 243 1
Index Introduction 3 Identifying Unique Purchasing Scenarios 4-5 Anatomy of an Ad 6-7 Full Funnel Multivariate Ad Testing 8 What is it? 9 Dos and Don ts 9-12 Getting Started 13 1. Go Back to Your Purchasing Scenarios 14 2. Do Some Investigating 14-15 3. Fine-Tune Your Creative 15 4. Document Your Tests 15-16 5. Set Up and Run Your Ads 16 6. Determine the Results 17 7. Calibrate to Your End Goals 17-20 8. Optimize 20-23 Conclusion 23 2
Introduction Often marketers take a short-sighted approach to their digital ad campaigns. They spend the majority of their attention on campaign structure and settings, while creative and click-through experiences suffer as an afterthought and it shows. This results in lackluster conversion rates and visitors bouncing off web pages. In the early days, the spray-and-pray approach worked when average costs were low, and you could make it up in sheer traffic numbers. Now that digital channels are maturing, average costs are rising. It s more important than ever for marketers to think holistically about the user journey from where the ad appears, to the message it conveys, all the way down to the landing page experienced and the path to your desired action being completed. This approach is Full-Funnel Conversion Rate Optimization. If executed well, small iterations to your ad creative, landing pages, and conversion paths will lead to messages that better resonate with your target audience, dramatically boosting your results, while driving costs down. Before getting too deep into optimizations, it s best to first understand the different scenarios that a target audience can take that leads to a sale. 3
Identifying Unique Purchasing Scenarios People buy products for different reasons, at different times of day, and for different purposes. It is important to capture all of these different scenarios in what we call purchasing scenarios. Why is this mission critical? Once you understand why and how different segments of your target audience purchase your product, you can cater your ad copy, creative, and landing page experiences to resonate with those buyers. Otherwise, you could be missing entire funnels of ideal customers waiting to be converted. You are doing yourself and your clients a disservice if you don t take the time to think through all your possible scenarios, and ensure that you build your funnels with these scenarios in mind. That s right this exercise happens BEFORE you build your PPC accounts (or before you restructuring your accounts, if you re overhauling your strategy for a client). Scenario A Scenario B Scenario C 4
Case Study Agency XYZ just signed OnlineMattresses.Com as a client. They know that the company s target audience are urban millennials, that people tend to purchase over the weekend, and that the company sells the following product lines: Fully-Proud to be Single, You and Your Queen, and The Kingdom. Being an excellent agency, they come up with the following purchasing scenarios before building their ad accounts for OnlineMattresses.Com: AGENCY XYZ online mattresses Urban MILLENIALS Recent college grad looking for mattress when moving into first apartment. Single millennial who has been working for a few years and is looking to upgrade from furniture that came with the apartment Young professional in a committed relationship, looking for a little more space Millennial couples moving in together for the first time Well-off urban professionals who are interested in luxury items Urban professionals who just purchased their first apartment/ condo 5
Anatomy of an Ad After you ve thought through your target audience, various purchasing scenarios, and unique conversion funnels, you re ready to start building out your campaigns: Before we get into how to combine ad variables for each purchasing scenario, let s quickly review what these variables are: Creative (Images, fonts, copy) Headlines Display URLs Ad Extensions http://url.com Scheduling (time of the day, day of the week) Locations KeyWords Different variables of an ad can make a big difference in how customers react to that ad - it s not just about the creative. Studies have shown that a change a simple as including the www. in your URL can have a major impact. Advertisers strategically choose which combination of variables to show to a user based on a set of criteria determined by the advertiser, and predict the ideal combination using data like: 6
Demographic of the user What the user is looking for (search terms) Stage of the buying cycle (long-tailed search terms) Geographic region (where the user is located) Time of day in which the user conducts the search Ad content- optimized to get attention Ad content- optimized to deliver the correct message Call-to-action (description 1 and description 2) Destination URL (landing page) So to summarize, we make decisions about what goes into an ad based on information about the customers to whom we will be serving the ad. Makes sense! But the big question is: How do agencies find optimal combinations of variables to test for each purchasing scenario? The answer is, of course, testing and, even more specifically Multivariate Ad Testing! 7
FULL FUNNEL MULTIVARIATE AD TESTING What is it? 8
What is Multivariate Ad Testing? Multivariate testing is when multiple elements within your ad are included in the experiment instead of your classic A/B test, where just one element is being tested. These elements could be keywords, landing pages, creative, etc (refer back to our list of ad variables for a full run-down). The ultimate goal of a multivariate test is to find the optimal combination of variables for a specific outcome (such as a form fill or purchase). What is the Purchase Funnel? The Purchase Funnel illustrates the customer journey from awareness of your company to purchasing. The classic layers of the funnel are: Awareness, Interest, Consideration, and Purchase. The idea is to create content relevant to each layer of the funnel and serve that content (be it in the form of an ad, blog post, email, etc) in such a fashion that it moves people down the funnel from awareness all the way to purchase. When running full funnel multivariate tests, this means that you are considering the ENTIRE purchasing funnel. Don t Run a multivariate test at each layer of the funnel individually. If you re at an agency, more often than not, different teams are testing different conversion funnel variables. Perhaps one team is testing landing pages and another is testing keywords. 9
This siloed approach to multivariate ad testing is called Single Layer Testing, and though it may be the traditional method, the results from these tests are misleading. SINGLE LAYER This is because these tests are all happening in isolation. If you go back to the concept behind our purchasing scenarios at the very beginning, the idea is that each scenario has a unique path to purchase funnel. No customer should be experiencing just one of your layers alone. They are experiencing them as part of series of touches catered specifically to their situation. So, testing elements of the funnel in isolation doesn t really tell you much, since what 10
you want to know is how effectively your ad s elements are converting and moving buyers further down the funnel. How Can Single Layer Testing Provide Misleading Results? Landing pages may only convert well for certain demographics Some promotional language may only convert traffic at certain times of day Some ad content may work well for European audiences, but not Americans If you re not testing the entire funnel together (i.e. the full buying scenario), you ll likely get unreliable test results. Do Run a full funnel multivariate test! Full funnel testing is a type of multivariate testing where each one of the layers of the funnel has individual variables that can be changed. When you make a change at any point in the funnel audience, demographics, keywords, ad content, landing page all of these elements need to be tested together in unison. 11
To do this, you need to create individual instances of a funnel to be tested in isolation of each other. FULL FUNNEL For instance: Test for males 18 24, in CA, selling them shoes, using Nike black skateboarding shoes keywords, and routing to a filtered product page of black Nike dunk skateboarding shoes. Then, do the same, but with females and some tweaks to the landing page to reflect that change in audience. 12
Getting started with Full Funnel Multivariate Testing 13
1. Go Back to Your Purchasing Scenarios In theory, full funnel testing makes a lot of sense, but can be intimidating to set up. If this is your first time approaching this type of test, take a few deep breaths, and think about it in terms of your purchasing scenarios. If you have multiple clients with different conversion goals, understand the purchasing scenarios that make sense for that business by audience, by product, by promotions etc. Establish the funnels you ll want to test and ask yourself, What funnel do I want to optimize? Then, when you dig into your creative (which is the next step surprise!), you ll find it s much easier to go full funnel. 2. Do Some Investigating The best way to craft strong creative is to understand the psychology behind how users consume your ads. Try the following: Meet with as many resources as possible; such as customer-facing colleagues in your organization, real prospects or clients, product designers, product managers, etc. Ensure you have the data you actually need. Tracking clicks and conversions is great, but in some scenarios, you may want to analyze visitor heat maps or eye tracking to identify landing page optimization opportunities. If you notice that you re not gathering 14
the user data you need, find out what tools and resources you need to obtain it and start implementing a process on regularly reporting on these insights. Don t start from scratch. Use past ad performance to benchmark KPIs. For example, you may already have some insights on what the best performing CTAs are or the highest converting landing page layout is. Document these wins and start thinking about new tests to raise the bar on conversion rates. 3. Fine-Tune Your Creative Now it s time to think about what elements of your creatives you want to test. Let s say you have five audiences, five products, and five regions you re working with. Perhaps you come up with three creative approaches you re going to use and test: discount pricing, timesaving value proposition, and CTA. Then, you re ready to come up with different ad variable combinations for each of the funnels you ll be testing. 4. Document Your Tests If you manage a high volume of ads, remembering all the intricacies of each multivariate test you re running is nearly impossible. Your 15
future self will thank you for documenting what tests are running, and their results, so you can continue iterating on these elements. Before you run your tests, take the time to document: What you are testing (Tactical details) Why you tested it (What question are you asking?) What impact the outcomes of the test will have (What is your hypothesis?) 5. Set Up and Run Your Ads.. 12 3 6 16
6. Determine the Results After launching a campaign, results start coming in very quickly and it s easy to jump the gun when determining the winner. That s why it's important to use tools to ensure your results are scientifically significant in order to keep your gut impulses in check before you optimize the wrong elements. The questions you want to ask yourself: Is the data I m seeing actually actionable? Is the sample size large enough? How did my variations perform against historic versions (if you have them)? Did my experiment fulfill the hypothesis I outlined in my documentation? Now that I have these results, how will I respond? Am I going to reallocate my budget? And, most importantly, which results should I show my clients to convince them that X action should be taken next? 7. Calibrate to Your End Goals When you re answering the above questions, keep your end goals in mind. 1. Define Core Key Performance Indicators (KPIs) Think business impact over vanity metrics. 17
For example, click-through rate could be up but bounce rate could also be up. In this scenario you may want to be tracking purchases or conversions. In B2B, number of leads is a vanity metric if they never convert or are poor quality, so you may want to start tracking deal sizes and number of opportunities. 2. Benchmark Core KPIs Once you ve figured out the right KPIs for your business model, figure out what the current state of these KPIs are today, and use that as a benchmark. For example, if your current KPI conversion rate for new paid customers and your current conversion rate is 2%, you can easily see if your efforts are paying off within a month as you ll be able to compare your new conversion rate to the old. Ad Group Audience Visited B2B Ad Landing Page 1 1-3 DAYS AGO DOWNLOAD NOW SAME DOWNLOAD NOW PAGE 2 4-15 DAYS AGO RELATED EBOOK TOPIC NEW DOWNLOAD NOW PAGE 3 16-30 DAYS AGO PRODUCT NEWS LEAD GENERATION LANDING PAGE 4 31-60 DAYS AGO BLOG POST TOPIC CONTENT LANDING PAGE 18
3. Use Milestone Results to Guide Decisions Lastly, you ll need to make a decision based on the results after each milestone. A few things to consider when timing your conclusion include: the volume of the sample size, the way the new variations performed against the old ones, and whether or not the experiment proved or negated a hypothesis. You can then make informed decisions on what your next steps are. It s important to spend money wisely, and align that to where your clients business needs are at all times. In the below example, you can see here why typical vanity metrics are not a good business health check indicator. You can see that the cost per click for ad #3 was $0.31 higher than ad #1. But on the flip side, the cost per lead and number of leads were less than half for ad #1 compared to ad #3. This means that ad #3 s traffic, while better performing when looking at clicks, didn t convert as well. There are a lot of reasons this could be the case, but a common was is that perhaps the ad offered something that wasn t in line with the visitors expectations when they ended up on the landing page. 19
If you prematurely react to an expensive cost per click, you might miss that it leads to the lowest cost per lead or completed registration. Remember that surface level metrics shouldn t be making calls. Look further down the funnel. You clients care about the decisions that will impact their business, so you should, too. 8. Optimize If you ve followed the steps of this ebook, at this point, you should have a very clear idea of the purpose of each of your funnel s layers, KPIs, and ways to measure the results. Now that your multivariate test is up and running, start collecting data to uncover insights and iterate on the results of your experiment. Once you start looking at results (ROI), you can ask yourself if it had a positive or negative impact: 1. Establish KPIs and set quantified goals Every company s goals are different. An individual organization s KPIs vary by campaign. 20
2. Set Budgets Set your overall monthly or daily ad spending budget. It is important to remain critical of the overall percentage of ad budget dedicated to experimentation. Client goals need to be taken into consideration. 3. Create ad variations and launch experiments. Build your ad ideas, expose them to a real audience, and obtain statistically significant results. 4. Uncover optimal ads and optimize budgets. Utilize scaled analysis tools to improve your ad spend and overall performance. 5. Improve ROI and understand why. Automatically uncover elements and patterns in your data that drive success. 6. Leverage data for future experiments. At this point, you ve learned and improved your strategy. Now keep it going by continuing to test. Optimizing for Post-Click When optimizing campaigns for post-click visitors, you re typically going to use retargeting campaigns on paid search, social, mobile or 21
display. For these campaigns, you can optimize your ads and bids for specific audience segments. For example, you could set up segments that are separated by how recently someone visited your site. This is just one step in the funnel to drive conversions. Example 1: Segment your retargeting: last visit date Bucket website visitors by time of last visit to get an overall lower CPA, and allocate more budget to the highest performing segments. Suggested Segments to Test: Visitors from 1-3 days ago Visitors from up to 15 days ago Visitors from up to 30 days ago Note: Exclude the other segment as negative audience targets when testing. Example 2: Content Visited Conversion rates can increase considerably when you start segmenting your web audiences into buckets by page visited and offering up a more relevant ad copy. Examples: Pricing Page, Features Page, Blog Content Type, Whitepaper Topic 22
Remember: In order to optimize for the full funnel, you ll need to map out the entire user journey, and test multiple variables at each stage of the buying process. Here is an example of a full funnel approach for a B2B company. Targeted Audience Blog Post / Infographic Excluded Audience Blog Post Subscribers Guide / Whitepaper Whitepaper Downloads Blog Post Subscribers Case Study Case Study Downloads Case Study Downloads Webinar Webinar Registrants In this example, demo/webinar registrants are considered salesready leads and generally move from marketing to sales at that point. For each stage of this funnel, the advertiser can run post-click campaigns to address the drop-off at each stage. Conclusion So there you have it. Full Funnel Conversion Rate Optimization! To recap, your steps are: 1. Define Purchasing Scenarios 2. Set up Full Funnel Multivariate Tests for your scenarios 3. Document your tests 4. Take time to determine and understand your results 5. Optimize for the Full Funnel Enjoy! 23
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