How do you assess PPC ROI?
-
I thought this would be pretty straightforward, but I'm trying to put together my first PPC ROI spreadsheet and it's turning out to be much more complicated than I had anticipated. Would anyone be willing to tell me what you look at to determine the return you're getting on PPC -- and if you're using AdWords and Analytics, what screens/reports you rely on? It seems to be more complex than simply comparing Paid Search Revenue to spend ... but I could be overcomplicating things.
-
To be fair in your example, the Adwords click did (on average) have some effect on the ultimate sale. If the customer never came through the door looking for red widgets, they may not have purchased the blue widgets from you? There are a few different reports in Analytics that can help you see this:
- Conversions > Multi-channel funnels > Attribution Modeling Tool (I think this is available to everyone now). If last-click interaction is by far the most important for you, you can select this in the tool and select the primary dimension of Source/Medium. Drill into Google / cpc and you should see the data you're looking for there.
- Conversions > Multi-channel funnels > Top conversion paths. Select primary dimension Source/Medium Path. This will should you the different parts that Adwords played in each conversion. You can also pick a secondary dimension of Adwords Campaign Path to see more info.
-
I'm not sure you can cover every angle or scenario.
We've found our data to be reliable enough to make good decisions.
-
How do you determine which revenue is directly attributable to AdWords?
-
Yes. Then you'll have to factor in the other costs associated with the sale like shipping, handling, discounts, etc.
There are some unknown variables such as repeat sales that are acquired from the initial conversion and/or volume purchases made after the initial conversion (assuming there are any).
-
Do you rely on AdWords' cost per conversion numbers?
-
I'm looking to compare spend to revenue from transactions that are directly attributable to that spend. So if I know how much I spent between Oct 1 and Oct 31, I want to know how much revenue resulted from those clicks. Not how many transactions occurred during that period, since that might include clicks from before Oct 1.
The problem is, AdWords includes conversions where the paid click might not actually be responsible for the transaction. If someone searches [red widgets], clicks an ad, comes to our website, leaves without purchasing, searches [blue widgets], clicks an organic result, and purchases, Analytics will correctly attribute that sale to organic. AdWords, however, will include that conversion in its cost/conv metric. Skewing the cost/conv number lower, I might add.
I've spoken with several AdWords/Analytics googlers about this, and they don't seem to know of a report that does what I want. I guess I'm wondering if others are trying to measure the same thing, or if they're comfortable with the less precise AdWords-supplied cost/conv figures.
-
I sell a downloadable product and a significant amount of my revenue is from Google adwords. We track the conversion rate of every keyword. An important factor is the click through ratio. You can get a lot of clicks and few orders. The important thing is to get the balance right. Any keyword with the word free will get a lot of clicks but very few orders.
Another important factor is to ensure that you are using negative keywords properly. On my site we sell generic set of speeches. We would have a negative keywords for therapy or disorder. Somebody looking for content to help with a speech is not interested in speech therapy or speech disorders.
Another area is to check your ROI in different countries, and only bid for clicks in countries where you can make an adequate ROI
-
Know your margins and watch the cost per conversion for your products.
Eventually, you'll get a good idea of what I call a "conversion threshold" which tells me what I can expect to spend to convert that product to a sale. From my experience, once the conversion threshold is determined, it won't deviate far from it over time.
If my net on the product is $20 and my conversion threshold is $12 then I'm making money (excluding cost for shipping, handling, promo discounts etc).
If the threshold his $18 or $22 then I re-think what to do with the product.
I'd put together a report that shows product cost, retail price, margin, net and cost per conversion. It should be quite telling.
-
I built my own Google Analytics custom reports which I export and add a few equations to in order to track ROI. I do it for a subscription site so it's not quite as complicated as it would be for an eCommerce site, where each purchase can have different items, margins, cost of goods sold, etc. What are you looking to see beyond paid search revenue to spend?
GA may be making this easier in 2013 with their "Universal Analytics" offering: http://analytics.blogspot.com/2012/10/google-analytics-summit-2013-whats-new.html.
Got a burning SEO question?
Subscribe to Moz Pro to gain full access to Q&A, answer questions, and ask your own.
Browse Questions
Explore more categories
-
Moz Tools
Chat with the community about the Moz tools.
-
SEO Tactics
Discuss the SEO process with fellow marketers
-
Community
Discuss industry events, jobs, and news!
-
Digital Marketing
Chat about tactics outside of SEO
-
Research & Trends
Dive into research and trends in the search industry.
-
Support
Connect on product support and feature requests.
Related Questions
-
What's the best call tracking system to use for PPC & subsequent landing pages?
Client has about 30 locations. Not planning to get too fancy (i.e. like putting JS on the page so that a dynamically generated phone is displayed to track keywords). At this point, just we only want to see if PPC is providing telephone conversions. I've used Mongoose Metrics before and it seemed good. However, I don't want to go with something simply because it's what I already know. Would love to know some of your favourites and if there are better options. Also - client is in Canada. Not sure if that makes a difference.
Paid Search Marketing | | woodsy10100 -
Cannot re-activate PPC after GWT violation has been removed.
Google adwords not allowing us to reactivate after GWT violation removed and site deemed clean by Google. Attempts at reaching them for guidance have been unsuccessful. Any suggestions? Thank you.
Paid Search Marketing | | ahw0 -
Youtube ad video ppc
anyone has any experience with youtube for adwords and how its converting, etc? tips on how to really narrow it down to keyword level and making sure impressions are based on your preferences? Thanks
Paid Search Marketing | | PaulDylan0 -
PPC question for the experts
I know this is paid search but since Moz had a section for it, I thought it would be ok to ask. 🙂 According to: http://support.google.com/adwords/answer/2497836?hl=en Broad match modifier +tennis +shoes Ads may show on searches for tennis shoes
Paid Search Marketing | | MattAntonino
buy tennis shoes
best shoes for tennis Ads won't show on searches for running shoes
tennis sneakers I'm using (for a client) +wedding +photographer. It should show on wedding photographer hire a wedding photographer best wedding photographer in dallas It should not show on photographer in Dallas become a photographer dallas pictures But it is. Why would this happen? Isn't that exactly what it says it won't show up on? Also, Google writes: Don't leave space between the plus sign (+) prefix and the word you're modifying! •Correct: +leather +shoes
•Incorrect: + leather + shoes
•Incorrect: +leather+shoes Yet the client was told by Google the opposite. "I spoke with Google and they confirmed that the space after the plus and before wedding (“+ wedding”) would notrequire “wedding” to show up." How on Earth does this reconcile or make ANY sense? ETA: This is fairly clear to me: Be sure there are no spaces between the + and modified words, but do leave spaces between words. The right way to do it: +formal +shoes. The wrong way to do it: +formal+shoes. http://www.google.com/ads/innovations/bmm.html0 -
FB PPC Conversion Tracking Script
Hi guys, Is there any way to install a FB conversion script for their PPC (in the same way as the shopping directories use)? I know this was possible about 1.5-2 years ago via a feature they have released in Beta at that time, but this seem to no longer be a choice. There is nothing in the FB help, I found no such option in their settings and the FB support does not answer (what;s new here 🙂 ) We can always try alternatives - as Google Analytics or Prosper202 ... but this time we would prefer FB scripts if possible. Thanks in advance T
Paid Search Marketing | | tolik10 -
Do you take Seo and ppc management on competitor sites?
I would love to hear what everyone thinks : I wanted to know what people do about seo and ppc when the keywords and industries overlap.
Paid Search Marketing | | DavidKonigsberg0 -
Have you seen a correlation in between running a PPC campaing and increased SEO ranking for a new site (< 3 months old)?
I have read many conflicting articles on this topic. I understand that running a PPC campaign at a launch phase of a site can get a lot of insights such as exact traffic patterns etc. But the question is: is there a correlation or not with increased rankings position for new site as search engine are forced to crawled that given landing page to give your ad a score? Thanks in advance for your answers and opinion
Paid Search Marketing | | OlivierChateau0 -
PPC ad guidelines?
I learned Google PPC years ago and got certified by Google. Back then and for a long time since I know it was best practice to capitalize words in your domain name. I know Google no longer does this and that words in your domain name of your ad are now all lowercase. I hear recommendations and see them practice that adding keywords in a directory are a good way to still get capitalized words in your ad. When I learned PPC, I was told your display URL and your destination URL had to match. Now I'm seeing ads where that is not the case. If I have an ad that takes someone to my homepage of a coupon site, can I have a display URL that says: mysite.com/Coupons Even if the destination URL is just mysite.com ? I'm seeing conflicting things online and it's hard because I don't know what the current guidelines are after this change.
Paid Search Marketing | | DanDeceuster0