The 80/20 Rule For Understanding Adwords Results
You Don’t Have To Know ALLThe Metrics In Your Account But There Are 3 You Should Know
You’ve taken the leap into the world of Google Adwords.
Or perhaps you’ve taken a leap of faith with an advertising agency to manage your Adwords account for you.
Either way, you need to understand the most important metrics in your account so you know how you’re doing or how the advertising agency you hired is doing.
According to Pareto’s 80/20 principal, you don’t have to know 100% of everything but addressing 80% of the 20% that matters will make you a modern-day super hero and you can apply this same strategy to Google Adwords.
Let’s take a peek into the top 3 metrics and why they matter:
There are numerous metrics to understand in an Adwords account but in my opinion if we have to narrow it down to just 3 that are critical, they are:
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Cost-per-Conversion(Cost-per-Lead)
Cost per conversion or cost per lead
This is the metric to watch most closely as it tells you if you’re making any money with your paid search advertising.
Of course it’s imperative that you “know your numbers”. Knowing how much you can pay for each lead while remaining
profitable helps establish your target cost per lead.
For example:
If your target cost per lead is $75 go into your account and review how much each conversion(lead) is costing you currently. As in the example below, all of the conversions were under $75 or very close to it.
You can easily find your cost per lead in your Adwords account under the Cost/conv. column. You’ll need to make sure you have added this column to your report. (See the screenshot below of how to add this column. Once you click on “modify columns” you can then add the cost/conversion metric for easy viewing within your account.
If you don’t have access to your Adwords account, stop reading this right now and contact whoever controls your account and tell them you need full access to YOUR account. Then come back and read on…..
Cost-per-conversion is the “end all, be all” when determining how well your Google Adwords campaign is performing. The other metrics may be in line or above industry standards but if you’re not getting an acceptable ROI, then they’re irrelevant.
Click-thru-rate (CTR)
Click-thru-rate is a good indicator of how well your ad creative is resonating with your target audience. If the CTR is low, it’s time to try a different message and do some additional optimizing with your keywords and landing pages. A high (and increasing) CTR is testimony to your account structure and that the message in your ad is the solution your target market is looking for.
Of course, this metric must be analyzed along with the other metrics within your account, for example you don’t want to make a decision until you’ve accumulated enough data (impressions). Also, an ad with a high CTR must also be analyzed along side conversions, if you have few or no conversions but a high CTR, you need to make sure the ad message is being carried over to your landing page.
Conversion Rate
Conversion rate gives you insight into how well you’re turning your clicks (website visitors) into conversions. If your getting Traffic as well as a great click-thru-rate(CTR) but you’re not converting your site visitors into buyers, you’ll see this reflected in a low conversion rate. In this case, it may be time get serious about optimizing your landing pages.
Final Thoughts
These 3 metics will give you enough insight to know how well your advertising is paying-off(or not). These metrics will give you enough data to keep your finger on the pulse and yet not take up a ton of your time so you can get back to doing what you’re passionate about, running your business.
If you’re paying someone to manage your account, you should be able to access your Adwords account at any time (3rd party reporting software does not count). Once you and your account manger have established a benchmark (target goal) for each one, you can quickly keep eye on how things are going. Putting you both on the same page and off to a good start.
