You’ve set up your Adwords account, you have some initial ads and landing pages, and you’re tracking conversions accurately. Now what?
The beauty of Adwords is that you can relentlessly test and optimize your campaigns. Unlike search engine optimization (SEO) or even social media, changes in Adwords will show up in real-time and often have a clear impact on your conversions. Adwords also offers a wealth of information to help you understand your users and optimize your campaigns.
Here are four tips to optimize your campaigns and keep improving ROI over time.
1) Track Your Changes
Every change that you make should be tracked, along with the date that you made the change and why you made it. This will help you understand which adjustments are working and which ones are costing you money. When your cost per acquisition (CPA) falls, you can tie that improvement back to a specific change that you made, and consider doubling down on what you did. When your CPA spikes, this technique lets you tie the spike to a specific action that you took in Adwords, reverse that action, and get your campaigns back on track.
In the same vein, restrict yourself to one big change at a time. You can make a few small adjustments, like tweaking keyword bidding by a couple of percent, at once; but if you’re going to make a big change, then you should try to hold other variables constant. If you make multiple large changes at once, than if CPA rises, you’ll have a hard time identifying which adjustments worked versus which ones you need to undo.
2) Utilize Adwords’ Demographics Data
Adwords offers a wealth of information about your users’ age, gender, and location. Adwords can also tell you which day and time your users are searching for you, and which device they’re searching on.
This information can help you to identify the most valuable subsets of your audience. If you see that a certain demographic is converting highly, then you can increase your bidding on that demographic to make sure that your ads appear in the top spot for them. Conversely, you can identify which audiences are clicking on your ads but not converting. Once you know who’s not converting, you can create new landing pages and ads to appeal more effectively to them; for instance, by adding copy that speaks to their particular age and gender. You can also reduce bidding on low-converting audiences and reallocate that spend to high-converting ones.
This is especially powerful when you’re looking at which devices your customers are using. Users will use different devices at different stages in the buying funnel. If you find that users on one device are more likely to turn into leads, than you can increase bidding for that device.
3) Focus on CPA
When you’re optimizing your campaigns, it’s important to look at CPA, not click through rate (CTR) or cost per click (CPC). The latter two don’t tie directly to ROI, which means they can be misleading. If one demographic is generating lots of cheap clicks but few conversions, then decreasing bidding for that demographic might reduce overall CPA.
The same is true when you’re analyzing keywords and even ads. Base your analysis on how much revenue they generate, not how many people click on them. An ad with a 5% click through rate and a 10% conversion rate is worth much more than an ad that earns a 20% click through rate but only a 1% conversion rate.
CTR does matter some, because a high CTR will improve your Quality Score and reduce your CPC. But don’t put the cart before the horse and optimize too heavily for CTR.
4) Look at What’s Actually Happening, Not What You Expect to Happen
When you’re deciding what changes to make to your campaigns, it’s important to look at the data with an open mind. It might lead you to some surprising conclusions. You may find that your money keyword has a high CPA, whereas longer-tail keywords convert more efficiently. Certain demographics may convert better than you expect them to.
You should start your analysis with a hypothesis, but don’t let your hypothesis blind you to what you’re seeing. Optimize based on what the data is telling you, not what you think it should be telling you.
No matter how well your PPC campaign is currently performing, you’ll be expected to improve it over time. Use these tips, and you’ll keep generating lower CPAs, higher ROIs, and happier clients.