Chapter 8

Auditing your Google Adwords Campaigns Performance

adwords-campaigns-performance
  • Whether you manage your Adwords efforts in-house or outsource them to an agency, knowing how to audit the performance of the campaigns is critical. It’s easy to get dazzled and even mislead if you do not align your campaign KPIs with your business objectives.
  • Make sure to evaluate how effective your Adwords efforts are in achieving your key business objectives by setting clear and relevant KPIs. The metrics should reflect what you would like to measure. When your campaign is targeted to generate online sales, the auditing is pretty straight forwards. You check compare the cost to the revenue and since everything occurs online it’s easy to understand clearly.
  • Things get more complex when your campaign is targeted to generate offline sales.
  • Here are a few key metrics to evaluate:
Metric Explanation
Clicks The number of times users clicked your ads
CPC Cost Per Click
Leads Total number of leads generated from your campaign
CR Conversion Rate from click ▶ lead
CPL Cost Per Lead
SQL Sales Qualified Leads - validated leads who have shown intereset in the campaign product
Lead ▶ SQL CR Conversion rate from Lead ▶ Sales Qualified Lead. This metric can help you evaluate the general quality of zou leads. A good conversation rate inkdicates high quality leads. Whereas a low conversion rate indicates poor lead quality.
Customers Total amount of new customers generated from your campaign.
SQL ▶ Sale CR Sales Qualified Leads ▶ new customers. Used to evaluate the efficency of the sales team.
Revenue The direct revenue derived from the campaign
ROAS Rate Return On Advertising Spent This helps evaluate the overall profitability of the campaign and to evaluate the revenue generated for each dollar spent.
  • The best and most important KPI you can set for your campaign manager is ROI rate. Setting this KPI ensures that you get your desired return on investment.
  • The rule of thumb is to NEVER set your campaign KPIs by cost per click, impressions or leads.
  • Here’s a quick example to prove this rule:
    Let’s take an example of a professional online marketing school who is trying to sell courses. Each course costs 1,000$ and requires a graduate degree in order to enroll.

Campaign A

Audit-Adwords-Campaigns-Performance
Keywords targeted –
“PPC campaign management course for postgraduates”
Clicks CPC Amount Spent Leads CR CPL SQL Lead ▶ SQL CR Sales SQL ▶ Sale CR Revenue ROAS Rate
100 10$ 1,000$ 20 20% 50% 10 50% 5 50% 5,000$ 1/5
  • In this campaign each click costs 10$ which sounds a lot for a 1,000$ potential income.
  • However, this campaign targets highly relevant keywords that indicate that the user is more likely to convert, be eligible and eventually enroll.
  • We can see that the Conversion Rate from Click to Lead is high, the Conversion Rate from Lead to SQL is high and the Conversion Rate from SQL to Sales is high (the prospect knows what course he wants, and is a postgraduate); therefore, the Return on Advertising Spent (ROAS) from this campaign is 1/5.
  • The bottom line here is that for each 1$ spent the company generates 5$ revenue. Not bad!
campaign-conversion-rate-optimization

Campaign

Clicks CPC Amount Spent Leads CR CPL SQL Lead ▶ SQL CR Sales SQL ▶ Sale CR Revenue ROAS Rate
100 1$ 1,000$ 100 10% 10% 5 5% 1 50% 1,000$ 1/1
  • In this campaign each click only costs 1$ and each lead costs 10$. Sounds good right? Look again.
  • This campaign targets broad terms that indicates that the user is not sure what he wants and might not even be eligible.
  • For those reasons the Conversion Rate from Click to Lead is lower than in campaign A, the Conversion Rate from Lead to SQL is very low and the Conversion Rate from SQL to Sale is low. (the person doesn’t know what course he wants, and isn’t necessarily a postgraduate) therefor the ROAS from this campaign is 1/1 which means that for each 1$ spent the company generates 1$ revenue. Not very impressive.
  • This example clearly amplifies why setting clicks or costs per clicks or leads as a KPI is wrong.
  • We see many companies who make the mistake of not analysing the data once a lead enters their CRM. This creates a blind spot for the company Google Adwords manager who can only set KPIs up to the level of cost per lead.
  • In such cases the Adwords manager does not have the relevant data to optimize campaigns for better ROI by learning which of the leads became customers and setting customers as a clear KPI.
  • How can you solve this? By getting sales and marketing on the same page otherwise known as Smarketing!
smarketing-icon

Smarketing

From Wikipedia, the free encyclopedia

Smarketing is the process of integrating the sales and marketing processes of a business. The objective is for the sales and marketing functions to have a common integrated approach This can lead to annual revenue growth of up to 20%, according to a study in 2010. The objective is to promote the product or service to potential buyers and at the same time integrate this process with the sales department’s activities. Sales and marketing departments should meet frequently and agree on a common terminology, and using data throughout the entire sales and marketing process to identify good prospects and to follow up on how well they are followed up. Smarketing works best when a firm does closed loop reporting by tracking its success with particular prospects from the marketing stage through direct sales efforts. According to one source, Smarketing began around 2000 as a result of improved web browsing capabilities.

  • Getting sales and marketing aligned usually requires implementing several technological solutions. Using a cloud based CRM that integrates with the media buying operation is usually enough on a technical level.
  • On a practical level, sales and marketing teams tend to not always like cooperating. We recommend implementing in-company regulations regarding workflows, lead scoring and updating the CRM about the sales that eventually occurred offline.
  • The key to success is to make sure your Google Adwords manager is well aware of your business objectives, and to ensure that you are measuring relevant metrics on your way to generating ROI. Low Adwords costs do not ensure sales. Be smarter, work as a team and use all the data you can generate to your optimization advantage.
CONGRATULATIONS YOU FINISHED CHAPTER 8
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