November 23, 2017

AdWords How To: Optimize Ads For Conversion, Not Clickthrough

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never cold call again


One of the most common mistakes that even seasoned AdWords advertisers make is to leave the default AdWords setting enabled, that automatically optimizes ads by clickthrough rate.

What it essentially does is begins by giving all ads in an ad group equal time, but the ad with the highest clickthrough rate will gradually get more and more “air time” until finally it is the only one showing, and the others are paused, for all intents and purposes.

Furthermore, using this tool is very popular because practically all AdWords books and courses on the market advocate it. However, I don’t.

Is the tool bad?

Not at all. But, the problem is that if you’re optimizing ads for clickthrough rate, you’re only optimizing for half the picture!

Why do we advertise, whether it’s on AdWords or anywhere else? Simple: To make sales. Our goal in marketing any business, product, or service online is to convert site visitors into sales.

On the surface, it makes sense to optimize AdWords ads solely for highest clickthrough rate. Why? Because clickthrough rate is one of the biggest factors that goes into your AdWords Quality Score, which largely determines your actual costs-per-click, your ad position, and in extreme cases, whether or not your ads even show at all.

However, a high clickthrough rate doesn’t necessarily translate into sales. In fact, an unusually high clickthrough rate frequently produces clicks that don’t convert at all.

Why?

Because in order to get an extremely high clickthrough rate, you essentially need to over-promise. And over-promising in your ads certainly won’t earn you any customers. If anything, it will turn potential customers off.

It’s not unlike the outright deceptive email subject lines that a lot of desperate online marketers are resorting to. It’s become commonplace to receive an email with the subject line “Problem with your order #9u8e3″ or “Collections: Final Notice” only to open the email and find that it’s a marketing message!

Naturally, even though I opened the email, I don’t buy from any of these people. Likewise, if your AdWords ad promises one thing, in order to generate high clickthrough rates, but the landing page offers something quite different, people aren’t going to buy.

So, does this mean you shouldn’t optimize for clickthrough rates?

No, but what it does mean is that you have to optimize for both clickthrough and conversion rates, and choose ads to run that give you the highest possible combination of both.

Here’s how:

This is a typical screen shot of what you’ll see in the Ads view in your AdWords account:

 

 

 

 

Notice that you see clickthrough rate (CTR) and conversion rate (Conv. Rate) displayed. The way I score ads to determine their overall value is to multiple the conversion rate by the clickthrough rate. In this case, we’d have:

0.72 x 8.5 = 6.12

This final “score” of 6.12 is what I use as a final ranking number to choose which ads live and which ones die.

Here’s a real life example of an ad I was running that shows exactly why you should never optimize on clickthrough rate alone – it had a clickthrough rate of 3.54%, which is practically unheard of and nearly impossible to achieve, but didn’t convert any sales:

3.54 x 0 = 0

Naturally, anything times zero equals zero. So if an ad isn’t converting sales, even a 100% clickthrough rate is totally worthless!

Sadly, many AdWords authors and self-proclaimed “experts” who make their living writing books and conducting seminars, but who don’t actually manage real-life AdWords accounts for a living, will tell you that you should use the automatic ad optimization tool that relies on clickthrough rate – in which case the 3.54% CTR ad would have lived while the others died, yet it would have produced zero sales and the poor owner of that account would soon be out of business!

So, in summary, while clickthrough rate is very important, and while an unacceptably low clickthrough rate will hurt you big-time, it’s only half the picture. Having a high clickthrough rate but no conversions is equivalent to a salesman who has lots of appointments but can’t close any sales. At the end of the month, he’ll be broke and hungry.

Likewise, if you’re not optimizing your ads for sales conversion as well as clickthrough rate, you’ll be in trouble too. Use my simple scoring system instead, and you’ll quickly maximize your AdWords ad performance!

never cold call again

Comments

Comments

  1. This is a wonderful article about Google Adwords and surely, it will greatly benefit your readers of this very important information.
    Thanks for sharing!

  2. This is really great and I find it really helpful. This article is just so full of information and I really enjoyed reading it. Thanks for the great post.

  3. It is useless to increase CTR unless your conversion rate gets increased. So it is necessary to drive quality traffic to improve the conversion and ROI of your campaign.

    • Frank Rumbauskas says:

      There is *some* benefit to increasing CTR in terms of reduced costs-per-click and higher ad positions, but like you said, conversion is more important. I’d rather pay a higher CPC for something that converts than a lower CPC for something that does not. This is why most PPC agencies fail – they focus on CTR, CPC, and QS, while failing to see the big picture of what actually converts into hard dollars for the client.

Trackbacks

  1. […] Continue reading here: AdWords How To: Optimize Ads For Sales Conversion, Not Just … […]

  2. […] I mentioned in another article about ad optimization, having a high clickthrough rate doesn’t necessarily equate to more sales or a good return on […]

  3. pligg.com says:

    Optimize Ads For Sales Conversion…

    On the surface, it makes sense to optimize AdWords ads solely for highest clickthrough rate. Why? Because clickthrough rate is one of the biggest factors that goes into your AdWords Quality Score, which largely determines your actual costs-per-click, y…

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