2007-10-26T03:12:00.000-07:00

by Alec Campbell

With increased competition leading to higher keyword prices, one of the most important metrics in a search marketing campaign is the conversion rate of clicks to actions. An action might be a sale, a lead, or any other desirable, quantifiable result. Faced with increasing keyword prices, maintaining an acceptable return from a search marketing budget requires constant improvements in the conversion of clicks to actions.

To improve the profitability of a search marketing campaign, it is best to focus on the factors that affect the conversion of paid clicks to leads or sales. The conversion rate is defined as follows:

Conversion rate (%) = x/y * 100

where x = ‘measurable action’ defined as a sale, phone call, email, or other valuable result that can be measured.

and y = number of clicks

There are two ways to improve the conversion rate:

1. Increase the number of conversions

2. Decrease the number of clicks

In this article, we focus on the latter. Of course, we are not advocating that in all cases the marketer reduce the number of clicks. Our purpose is to provide guidelines on improving the conversion rate and the campaign profitability through the removal of low quality clicks, i.e. those least likely to convert. A successful implementation of this strategy will free up campaign resources which can then be reinvested to increase the number of higher quality clicks leading to more conversions and a higher conversion rate.

STRATEGY

Improving the overall quality of clicks requires the implementation of tactics to remove poor clicks that have little chance of converting to sales. The goal is to focus campaign resources on medium to high quality clicks.

• High Quality Clicks: These clicks are the most likely to convert as they represent searches that are highly relevant to the product or service the marketer offers. A marketer would be willing to pay more for these clicks as they are the most valuable.

• Medium Quality Clicks: These clicks are relevant but the searches are more general in nature and therefore representative of searches from users in an early stage of the purchase decision. They have value in terms of awareness that may lead to sales in the longer term and as such, a marketer would be willing to pay a lower CPC.

• Low Quality Clicks: These are worth little or nothing. They are not relevant to the marketer’s business and should be eliminated if at all possible.

Think of high quality clicks as being from internet users looking for an immediate solution; they are ready to make a purchase decision. Medium quality clicks are from legitimate potential customers that may not urgently need to buy a solution; they are fact finding, collecting information on what is available in order to make a possible purchase at a future date. These clicks are still valuable but harder to quantify. Low quality clicks are from users who are not in the marketer’s target market; these clicks are for the most part irrelevant.

The strategy for improving overall keyword quality is to identify and remove the low quality clicks.

LOW QUALITY CLICKS

There are several reasons why a marketer might be getting low quality, irrelevant clicks.

1. Generics Keywords

With generic keyword phrases, it can be very difficult to ascertain what information the internet user actually seeks. The less specific the keyword search phrase, the harder it will be to match a solution to the user’s needs.

Example: The phrase ‘attorney new york’ provides no information on the type of lawyer the user seeks. A law firm specializing in one particular practice risks getting a lot of poor quality clicks advertising on this keyword phrase.

2. Broad Match

With broad match, an ad might appear for keyword combinations that aren’t really relevant to the marketer’s business.

Example: A search for ‘online legal education seminars’ is not relevant for a company that provides only classroom-based courses but may well be bidding on the broad match term ‘legal education seminars’.

3. Content Match

Clicks occurring as a result of Google’s Content Network (Content Match in Yahoo) are not as high in quality as direct search clicks. This is because content match clicks are a result of ads appearing on websites that are deemed to be related to the keyword selections but are not actual searches. This is considered contextual advertising and as such may be useful for building awareness but not, in general, for immediate results.

4. Wrong Solution

A disconnect can occur between the customer’s actual needs and the product or service being offered. The keyword choice was correct but the user couldn’t make a determination until after clicking on the ad that the marketer did not offer the solution they needed. There are numerous factors that might cause this – price, product specifics, time, location, etc.

Example: Someone searching for a 4 bedroom detached house is not likely to take an action on a website marketing 2 bedroom condos even though the keyword ‘real estate in cleveland’ may have been relevant.

5. Keyword Confusion

A marketer’s ads might be appearing for a product or service for which the keywords have relevance but the ads do not.

Example: The keyword ‘bass’ is relevant for fishing, beer or a musical instrument. This shouldn’t produce many clicks, but on occasion it will just out of curiosity from click happy internet users.

6. Click Fraud

Clicks that come as a result of fraudulent usage from a competitor or spammer.

IDENTIFYING LOW QUALITY CLICKS

To identify poor quality clicks, the best place to start is with conversion tracking. Conversion tracking enables the marketer to track a website action such as sale or form completion back to the keyword choice and ad that was clicked by the user. This will provide valuable information on which keyword and ad copy combinations are providing the most value per click and, just as importantly, it will help identify those that are not producing good results – the low quality clicks.

To dig deeper into the reason why certain keywords are not converting, a marketer should analyze its website statistics. These statistics are available through an analytics package such as Omniture, WebMethods, Clicktracks, or Google Analytics. If the marketer is not using an analytics package, these statistics may be available through the hosting company or IT person if hosted internally.

Any decent package should provide a report of the search terms used to reach the marketer’s website. This will include both paid search and organic clicks. The information contained in this report should be highly useful in determining which keyword searches are irrelevant to the marketer’s business. These are the keyword searches that can be removed or at least modified by negative keywords or more effective ad copy.

Unfortunately for a marketer that depends mainly on phone call leads, there is no easy way of identify which keywords led to such actions. Several companies have recently launched products aimed at solving this problem by requiring users to click to call. A phone call lead is initiated when the user enters a phone number and the system establishes the connection between the marketer and the user. The action is thus measurable and can be traced back to the keyword.

However, given the nascent stage of this technology, it has not yet gained end user acceptance. Until such time that this occurs, a marketer with a lead generation website must rely on the information provided by emails, form completions or other such measurable actions.

In the second part of this article which will be featured in the next edition of the www.Site-Reference.com newsletter, we look at solutions for improving click quality.

Improving Google Adwords Campaign Profitability

STRATEGY

LOW QUALITY CLICKS

IDENTIFYING LOW QUALITY CLICKS