Numbers Don’t Lie When It Comes To Marketing

As an eCommerce marketer you occasionally may find it a challenge keeping your focus where there is the highest opportunity for potential growth.

With all the various ways that customers can find your products – email, pay-per-click, organic and direct it can be difficult to know which marketing channel to focus your efforts.

More and more, it has become essentials for retailers to focus on driving potential customers to their website using paid traffic.

Options for paid traffic include Google Ads (shopping and search), Bing/Microsoft Ads, Pinterest, Facebook Ads, eBay, Walmart and Amazon just to name a few. And these are only just some of the available marketing channels!

Today, most retailers find it is necessary to use paid ads to drive traffic to their website if they want to scale sales and substantially grow as a business.

Afterall, nothing is more frustrating than having great products, but your ‘right’ customers don’t even know that you exist.

Regardless of how much demand there is for your products or how much your customers will love your products, without knowing you exists it will not matter.

The scenario of not effectively advertising typically means little to no sales or even worse, sales, but little to no profitability.

Given we know that we need to advertise where should we focus our online marketing efforts?

An undisputed truth when it comes to marketing is that numbers never lie.

Therefore, as marketers it is our job to track the numbers and specifically the right numbers in order to measure and improve the effectiveness of our marketing.

Here are the most common KPI’s (key performance indicators) and the different measurements that I use to guide successful marketing for my private clients. In addition, I’m going to show how I compile this information and use it to make strategic decisions.

I’m using these KPI’s in terms of Google Ads, but you can use these same key performance indicators to evaluate any of your paid marketing channels.

Account Health – KPI’s – Key Performance Indicators

‘Account Health KPI’s’ are used to monitor the health of your advertising channel. They give you a 30,000-foot view to measure your advertising efforts.

These KPI’s should be reviewed on a timeframe that allows enough data to become statistically relevant.

For my private clients, the following Key Performance Indicators are what I use to track on a monthly basis as indicators of the overall health of their accounts.

ROAS – Return on Advertising Spend

An easy formula to calculate, ROAS is calculated simply by dividing dollars generated by dollars spent.

Example, if you spend $1,000 advertising and generate $6,500 in sales, then your ROAS is 6.5. (6,500 / 1,000 = 6.5).

A ROAS below 1 means that you are spending more on ads then generating revenue (of course not good). The higher the ROAS the healthier and typically more profitable is your advertising campaign.

Not only do I track ROAS for the account, but I will use this indicator as a benchmark for individual advertising campaigns.

Note, that ROAS does not account for cost of goods, however, it is a simple calculation that can quickly measure the success of your advertising efforts and that is why I prefer this indicator.

Just like the amateur golfer, you are using this number to compete against yourself striving for better numbers and using ROAS to compare past results.

Rolling CAV – Customer Annual Value

Rolling CAV is calculated by calculating the total sales generated over the last 12 months and dividing by the number of total customers over the last 12 months.

Example, last 12 months your generated $150,000 online and had a total of 1,200 customers, then your CAV is 125. (150,000 / 1,200 = $125)

Note, it is important to use the number of customers and not the number of orders. Using the number of orders will give you the average order value, but not the customer annual value.

This KPI is important because it measures the importance of gaining a new customer. Many times, customers where it initially costs to attain them through paid advertising become exceedingly more valuable as return customers. By keeping track of the CAV, advertisers can determine just how valuable on average each customer is to their business.

True ROAS – True Return on Advertising Spend

This is a combination of your ROAS and your Rolling CAV. I calculate True ROAS to show the annual health of paid advertising and the dollars that I expect marketing to generate over a year.

Why is this metric important?

Unless you are selling one-off goods, typically you will have repeat buyers.

Once a customer purchases your product initiated through paid ads, then the customer is yours. You are free to market to them as you see fit whether that be through email, direct mail or any other variety of touch points.

In addition, generating a new sale from a past customer typically is going to be less expensive than generating that initial purchase and that is reason this metric is important.

Example, last month you spent $1,000 and generated $6,500 in sales for a ROAS of 6.5. This $6,500 was generated by orders from a total of 80 customers.

Over the course of the year, we can expect those 80 customers each to generate an average of $125 in sales based on our current rolling CAV.

Therefore, our True ROAS would be calculated by (80 * 125) / 1000 = 10

This calculation does two things.

First, it demonstrates the importance of gaining new customers by calculating their expected value through the next 12 months and not solely based on the initial sale.

Second, and maybe more importantly, it demonstrates the importance of concentrating on repeat business from your current and past customer base. Increase the CAV from $125 to $200 (just a sale more per customer on average per year) and guess what happens to your true ROAS.

(80 * 200) / 1000 = 16

It goes from 10 to 16!

Optimizing Indicators – KPI’s – Key Performance Indicators

Account Health KPIs are terrific for measuring longer term success. However, measuring success on a monthly basis alone is going to have you more reactive in your account changes instead of proactive.

Fortunately, there are five main optimizing indicators that can give us quick insights into the health of the account on a much more granular level.

When I look at a Google Account for a shorter time frame, such as weekly or even daily, these are the Optimizing Indicators that I review for any sudden spikes or declines.

Conversions – Number of total sales.

Conversion Value – Total dollars generated from your sales.

Cost – Dollars spent to generate all sales.

Avg CPC – Total ad spent divided by total clicks.

CTR – Total clicks divided by total impressions.

These Optimizing Indicators are all readily available within the Google Ads Console.

In order to remove or add or even rearrange columns, advertisers can use the column button.

An important realization is that knowing your KPIs are not enough to make successful changes. You must take decisive actions to successfully optimize your paid advertising once KPIs are calculated.

What action?

That is really going to be the million-dollar question or in the case of some eCommerce businesses the multi-million-dollar question.

Throughout my books as well as my podcast I offer different techniques and strategies to optimize on changes both positive and negative to your KPIs and hence to your marketing.

Final Word

What gets measured, get improved. A cliché for certain, but truth none the less.

If you don’t stay on top of your numbers, then your numbers will stay on top of you. I think that I just made that up, but it sounds a bit profound for me so who knows :>

What this article has given you are the key calculations you should be crunching on a monthly basis as well as the KPIs to review on a weekly/daily basis.

Knowing your numbers alone will not help you get better results. Once you have identified a positive or negative trend using Account Health Indicators or you identify a sudden spike or sudden decrease in your Optimizing Indicators it is important to take quick and decisive actions to either halt the negative or capitalize on the momentum.

These actions come in the form of increasing or decreasing bids, adding negative keywords, adjusting bids based on device and a host of other strategies to optimize your paid advertising results.

However, one thing cannot be denied, which is if you don’t keep track of your KPI’s, then you will never know that any action is needed along with the other undeniable fact, which is numbers never lie!

Happy Marketing!
Andy Splichal

ABOUT THE AUTHOR

Andy Splichal is the founder and managing partner of True Online Presence, author of the Make Each Click Count book series, host of the Make Each Click Count podcast, founder of Make Each Click Count University and certified online marketing strategist with twenty plus years of experience helping companies increase their online presence and profitable revenues. In 2020, he was named to Best of Los Angeles Awards’ Most Fascinating 100 List. To find more information on Andy Splichal, visit www.trueonlinepresence.com or read The Full Story on his website or his blog, blog.trueonlinepresence.com.

Properly Using Keyword Match Types In Google Advertising

While creating a Google AdWords campaign an advertiser must enter a list of keywords for which they wish to have their ads display. As simple as that sounds, there are variances to adding keywords that will determine the number of impressions and clicks an advertiser’s campaign receives.  The type of keywords entered is a vital factor in determining impressions, clicks, spend and the overall success of advertising on Google.

Every month Google processes over 100 billion searches.  As amazing as that number is, it is equally amazing that on average 15% of those searches have never been previously searched, ever!  This is one reason why an advertiser cannot simply enter a list of keywords, but rather must enter a list of keywords and their match type in order to determine how they wish their ads to appear for any relevant search query.

Let me explain. Google currently supports five different match types: broad, phrase, exact, broad based modifier and negative.  Each match type has its advantages and which type will be the most effective is dependent upon the type of business using it, but generally it is a combination of match types within a campaign that proves to be the best option. 

The ability to determine match type gives marketers the tool to direct as granular or broad of traffic as they wish to their website.  It should be noted that the best match type is not going to be the same for all advertisers and continual testing is recommended.

Broad Match –

Broad match type is the most basic match type.  When using a broad match type, advertiser’s ads will be eligible to run on any search query that has the broad match word(s) or slight variances listed (slight variances include singular/plurals, misspellings, abbreviations and stem words). 

Example, if a marketer is using the broad match term – shoes, ads will be eligible to display for the following search queries: red shoes, women shoes, expensive shoes, cheap shoes, shoes sold online. Any query that contains the word shoe the advertiser’s ads will be eligible to show! 

As you can imagine, broad match type is going to deliver the most traffic; however it is also most likely to deliver the lowest return on investment (ROI), so use it wisely. Note, the broad match type is Google’s default if an advertiser does not specify one of the other match types listed below.

Phrase Match –

Phrase match is generated by added quotation marks around the keyword or keyword phrase. This match type will allow ads to be eligible for display if the search query matches the keywords or when additional words appear in the search query either before or after the keyword or keyword phrase. 

Example, if a marketer has a phrase match term – “red shoes”, ads will be eligible to display for the following queries: ‘buy red shoes’ or ‘red shoes on sale’.  However, ads will not appear if the query has the keyword phrase interrupted such as is the case with the search query – ‘red pretty shoes’. If an advertiser wishes their ads to trigger in this instance, they would need to use the broad match modifier match type (described below).

Exact Match –

An exact match type is generated by using brackets [ ] around keyword(s).  For exact match, the search query must match exactly your keyword or keyword phrase in order for ads to be eligible to display.

Example, if a marketer has an exact match keyword – [red shoes], only if the search query is ‘red shoes’ or a slight variance such as ‘red shoe’ will the keywords trigger an ad to display.  Using exact match keyword and keyword phrases will deliver advertisers the most targeted traffic of any match type and many times the highest ROI, although it will be the least traffic generated of any search type.

Broad Match Modifier

My favorite match type is the broad match modifier. The broad match modifier match type will trigger ads to display for more search queries than the phrase or exact match types while providing more control than a broad match search type. 

The broad match modifier search type is able to be used with single or multiple words.  It is generated by adding a (+) symbol directly in front of the word with no space between the (+) symbol and the word or words.  Once the (+) is added, each word or close variant (singular/plurals, misspellings, abbreviations and stem words) that is preceded by a (+) must be present in a search query in order for an ad to be eligible for display.

Similar to phrase match, a broad match modifier needs to have all the words in the query to appear, but unlike phrase match the order does not need to be the same. As an example, if a marketer uses the broad match modifier search term – +Red +Shoes, ads will be eligible to display even if the words within the broad match modifier are interrupted.  Queries such as ‘Red Unique Shoes’ will trigger ads to display just the same as queries that do not interrupt the broad match modifier keywords such as ‘Unique Red Shoes’.

Negative Keywords

Negative keywords are unlike the other match types in how they are setup, but may be the most important of the match types!  Negative keywords are words that advertisers can add that will cause ads NOT to display even if other match types are triggered.

Negative keywords are generated by adding a minus symbol (-) before any words that should be a negative keyword. Example, if there is the negative word ‘–used’ and a search query is done for ‘used red shoes’, an advertiser’s ad would not be display even if the campaign contained “red shoes” as a phrase match; +red +shoes as a broad match modifier or red shoes as a broad match.  The ad would also would not show for an exact match for [red shoes]; not because of the negative keyword ‘-used’ is present, but because the query ‘used red shoes’ of course is not an exact match for [red shoes].

The proper use of negative keywords is quite important in limiting unwanted traffic and costs. In fact negative keywords are so important that I’ve dedicated an entire blog post to the subject – The Art of Adding Negative KeywordsPlease review that post for complete details on how to implement negative keywords at the campaign as well as the ad group levels along with some best-practices and strategies.

Summary

In order to determine which match type will generate the highest return on investment, continual testing is required.  The proper use of match type is a delicate balancing act between generating traffic and generating a positive ROI.  Only through continual testing can advertiser discover the proper balance for their specific advertising campaign.  

Fortunately for advertisers, Google makes it easy to track results by implementing Google’s conversion tracking code.  Tracking conversions allows a marketer to determine directly in their AdWords account what costs and conversions are being generated at the keyword level. 

Note, while testing it is not recommended to change a keyword’s match type once listed as historical data will be permanently lost.  Instead, if an advertiser wishes to change a keyword’s match type, it is recommended that the original match type be paused and a new search term with the new match type be created.  This will preserve all historical data and hence allow a comparison of which match type provided better results.

An important tool Google provides in looking at match type on the historical level is the keyword search terms tool as seen in the image below.  By viewing search terms, advertisers can realize exactly which search queries have been driving traffic and how those queries are being matched with existing keywords.

Search-Terms-AllFor more additional instructions on how to access the keyword search terms tool and best-practices when using, read my blog post – The Art of Adding Negative Keywords.

Still need help or looking for someone to bounce ideas off?  I am currently offering free marketing discovery sessions to those interested. Call True Online Presence at 1-888-456-6943 or schedule online.

Happy Marketing!

ABOUT THE AUTHOR:

Andy Splichal is an online marketing strategist  with more than a decade and a half of experience helping companies increase their online presence and profitable revenues.  Although this blog focuses on driving profitable traffic through Google AdWords, True Online Presence offers additional services for lead generation as well as other proven marketing strategies customized for each client.

 

Strategies For Determining Bids In Google AdWords

When advertising with Google AdWords, advertisers must determine the maximum they are willing to spend each time a user clicks on one of their ads (known as the bid).  Advertisers have the option to set the same bid for all keywords within an entire campaign; optimize bids on a keyword level based on past results or turn over the bidding strategy to Google’s automated bid management system. 

Once an advertiser’s bids are in place along with all other required settings, an advertiser’s ads are eligible to appear on Google’s Search and/or Display Networks. 

What Determines The Order That Ads Appear?

The number of ads Google displays depends on the search query and device used to perform the search. Typically, Google displays between 5-8 ads for desktop devices and 1-5 ads for mobile devices.  For desktop devices, the first 1-3 ads appear on the top above the natural (organic) listings and the remainder of ads will appear on the right side of the page beneath the Shopping listings, if present.  For mobile devices, only 1-2 ads are typically displayed on top of the first page above the organic listings and shopping results, if present. The remainder of ads (if served at all) will appear on the bottom of the page below the organic listings.

In determining the order that ads appear, Google runs a real-time auction using eligible advertiser’s bids in conjunction with eligible advertiser’s quality score to determine which order to display ads. This post focuses exclusively on bid strategies; however quality score is equally important.  For more information on quality score refer to the blog post – Why Advertisers Need To Know Their Quality Score.

T.O.P. AdWords Campaign Review & Ratings SystemDeciding On A Bidding Strategy

When determining a keyword bid strategy, advertisers must first decide whether to set their own bids or turn over control and let Google determine the bid strategy within the confines of a daily budget. 

For advertiser’s who have the time and knowledge to optimize their campaigns, determining their own bids is recommended.  However, for advertisers with limited time, limited knowledge or both, allowing Google to optimize bids is a viable option.

If directed, Google will either automatically optimize bids on a CPC (cost per click) or CPA (cost per acquisition) basis known as their Enhanced CPC option or an advertiser may select a flexible bid strategy. Although Google has made changes to their algorithm, even the most sophisticated algorithm is not going to be able to typically match the results that can be achieved with attentive hands-on maintenance.  In addition, although it benefits Google to have their advertiser’s successful; it also benefits Google to have advertiser’s increase their ad spend. So is Google optimizing for Google or the advertiser?  The truth is probably both, but this idea should not be overlooked and is a key question when turning over bid strategy to Google.

Setting Initial Bids In Google AdWordsFor advertiser’s who decide to manage their own bids, the first step is to determine the default bid and campaign budget.  This is determined at the campaign settings level even before creating either ads or keywords.

Determining Initial Budget In Google AdWordsOnce a campaign has been configured, Google provides a number of customizable tools that can be used to determine initial keyword bids.  These tools are accessed by customizing the columns when viewing keywords to include Est First Page Bid and Est Top Page Bid.

In order to customize columns, go to the Keywords tab and click on the Columns button. Then, select modify columns.  Under the Attributes metrics at the bottom of the list is the Est first page bid and Est top page bid.  Click on the blue Add link, set the display order and apply. 

Customizing Columns In Google AdWordsKeywords will now display the columns for minimum bids required for ads to be eligible to display on either the first page or in the top position.  Note, a high quality score can substantially reduce the bid needed to have ads displayed, so I also recommended customizing columns to include Qual. Score.

Once an advertiser is aware of where the minimum bid should be set in order to appear on the first page and the top position, optimizing becomes a task of testing and collection enough historical data to make educated decisions.  It is not recommended to go below the first page; however, it is also not always necessary to be in the top position.  The ad rank position that is going to provide an advertiser with the biggest bang for the buck is going to be different from advertiser to advertiser and only testing will be able to reveal the optimal ad rank position.

Another great tool when customizing columns in order to determine bids is found under the Competitive metrics.  These tools are the Search Impr.  share, Search Exact match IS and Search Lost IS (rank) columns. Together, these 3 columns when combined with historical data allow an advertiser to look at what percentage of traffic their current bids are capturing and provide the information needed to change bids when needed.

Adding Competitive Metrics In Google AdWordsBidding For Mobile

Remember for mobile devices, Google typically only is going to display 1-2 ads on the top of the first page. Therefore for advertisers wishing to have their ads display on mobile, it is critical to keep track of their keyword’s average page position.

Average position is one of the default columns when reviewing Google data and can be viewed either at the Ad Group or at the Keywords tabs. However, the data that is shown by default is for all devices.  In order to see data segmented by device, an advertiser must use the Google segment feature.  In order to split data by device, first go to the Segment button and select the Device option in the drop down.

Segmenting Traffic Data By Device In Google AdWordsOnce segmented by device, advertisers in addition to being able to determine traffic, conversions, costs, etc, will also be able to view average position.

If the average position for mobile devices is not within the top two, then a bid adjustment is recommended.  However, it is not necessary to change the entire bid for all devices.  If an advertiser wishes to raise the bid and subsequently the average position on mobile only, that is possible.

In order to change the bid for mobile only, go to the settings tab for the campaign that is to be adjusted and select the Device sub-tab.

Device Bid Adjustment In Google AdWords

Bid adjustments can then be made by clicking on the Bid adj. column next to the device an advertiser wishes to change.  The change of either increasing or decreasing is done in terms of percentage.  For example, the setting in the image above has a bid adjustment of -10%.  In this example, if the standard bid is set at $1 for mobile devices, the maximum bid will be $0.90.

T.O.P. AdWords Campaign Review & Ratings SystemSummary –

The amount an advertiser is willing to bid is one-half of the formula that Google uses to determine ad rank.  Only diligent testing over time will help advertisers determine the optimal bid rate for keywords. It is critical that advertisers put in the work to make sure they have their keywords set at an optimal bid rate to provide the highest possible ROI.  Too low of a bid will not generate appropriate levels of traffic and too high of a bid will generate more traffic, but the costs could be too expensive.  Fortunately, as described above, Google provides all of the tools advertisers need to optimize their bidding across all devices.

For additional information on the second half of the ad rank formula, see our blog post – Why Advertisers Need To Know Their Quality Score.

Still need help or looking for someone to bounce ideas off?  I am currently offering free marketing discovery sessions to those interested. Call True Online Presence at 1-888-456-6943 to schedule.

Happy Marketing!

ABOUT THE AUTHOR:

Andy Splichal is an online marketing strategist  with more than a decade and a half of experience helping companies increase their online presence and profitable revenues.  Although this blog focuses on driving profitable traffic through Google AdWords, True Online Presence offers additional services for lead generation as well as other proven marketing strategies customized for each client.

 

Creating A Clear Call To Action Is Vital For Professional Services

When advertising with Google, advertisers have the ability to decide which URL that specific ads will direct users if clicked.  However, what happens once a user is directed to an advertiser’s website is vital in determining the success of an advertising campaign.

Initially, the first step is to select which page an ad should direct users.  The page that users are directed to, also called the landing page, should be highly relevant to the keywords that generated the ad being displayed and ideally even contain the keyword(s) for which the user initially searched, known as Keyword Targeting.  An advertiser’s landing page may also contain keywords on the landing page that are found in the advertiser’s ad, known as Proper Ad Targeting.  For detailed information on these types of targeting as well as other tips to ensure a landing page is relevant see my blog post – Have A Plan When Determining Your Google Ad’s Destination.

Ensuring an advertiser has a relevant landing page is just the beginning of determining if the landing page is effective.  Just as important is making sure that the landing page clearly defines what goals an advertiser wants the user to take once they arrive at a website, this is a Call To Action. A Call To Action is anything that encourages users to take a specific and immediate action.

As a rule of thumb, the Call To Action is cut and dry for ecommerce retailers. Ecommerce retailers want the user to purchase their goods.  But, what about Professional Services clients?  Professional Services are generally more concerned with lead generation.  Forms of lead generation can include contact either by phone, email or contact form; perhaps downloading a free report or subscribing to a newsletter just to name a few. However, regardless of what Call To Action a Professional Service provider wants the user to take, one thing is for certain – the advertiser should know what it is for their business!

T.O.P. AdWords Campaign Review & Ratings SystemHere are some tips when thinking about how to present advanced Call To Actions beyond that of simply contact us today link:

Call To Action Tips –

  1. Make sure the Call To Action is above the fold! This cannot be stressed enough.  An advertiser never wants a user to be forced to scroll down a page to search for the reason they have been brought to the page.
  2. Make sure the Call To Action is the prominent feature on the page. Don’t distract the users.
  3. Don’t speak in lingo or tech talk. Make sure the call to action is in plain English that a user understands and which they can relate.
  4. Consider a bribe. Everyone loves FREE! A powerful four letter word, Call To Actions such as Download a FREE Report , Contact Us for a FREE Consultation, Sign Up for a FREE Trial can be extremely effective.
  5. Add a time limit. Download A Free Report before midnight on mm/dd/yyyy.
  6. ALWAYS TEST.  As with most everything, a Call To Action is seldom perfect the first time.  Make sure you are testing alternatives and different offers in order to properly optimize.

Example –

Here is a Call To Action, implemented by a dentist, River Dentistry.  Interestingly, the page itself has contact information below the fold (not good, rule #1 above). However, a popup is immediately displayed offering a customer a 5% discount if they schedule an appointment in the next 5 minutes.  Straight from #5 above, this Call To Action does a great job of encouraging an immediate and specific Call To Action.

Call-To-Action

 

Summary –

Have you clearly defined what action you want users to take once they have reached your website?  Are you testing to make sure your Call To Action is compelling as possible?  These are critical questions each advertiser must ask themselves when driving paid traffic from Google.  Using Google Ads can be extremely profitable for Professional Service advertisers, but only if they have clearly defined the goals and direct users to take specific action!

Still need help or looking for someone to bounce ideas off?  I am currently offering free marketing strategy sessions to those interested. Call True Online Presence at 1-888-456-6943 to schedule.

Happy Marketing!

ABOUT THE AUTHOR:

Andy Splichal is an online marketing strategist  with more than a decade and a half of experience helping companies increase their online presence and profitable revenues.  Although this blog focuses on driving profitable traffic through Google AdWords, True Online Presence offers additional services for lead generation as well as other proven marketing strategies customized for each client.