AdwordsTip.com

With increased competition and rising costs marketers are facing profitability challenges. Paid search marketers have been able to stay ahead of the competition by diversifying their keyword list or going after “the tail” by bidding on niche keywords above and beyond the most basic 1 or 2 keyword phrases.

In theory, these keywords demand a lower per click cost and by nature are more descriptive and targeted to the user’s intent thus serving user’s needs to a much higher degree, leading to a higher conversion rate at a lower cost per conversion (CPA).

Naturally, its only a matter of time before your competitors follow suit – increasing competition and costs on tail terms. This begs the question, so how do I continue show value from the marketing expenditures in the Paid Search arena?

One answer: Stop thinking about acquiring new customers as an all or nothing scenario.

PPC marketers obsess over ROAS or CPA, but fail to realize the true potential value of the traffic they are spending money to acquire. The thought being If a click-through does not convert immediately, all is lost and the click contributes to wasted costs and opportunity.

This is not entirely true.

Tip #1: Spend time understanding your PPC traffic patterns by closely monitoring your bounce rates – if you notice that keywords from your PPC accounts are driving visitors that do not stay for more than a few seconds, rethink your landing page and the keywords you have selected.

Tip #2: Diversify your conversion points – determine alternative ways to assessing value from paid search traffic. Your A1 (ideal conversion path) may be a sale – the case for most online retailers. Retailers know what their average order size is and the profit margin it yields. But rarely consider the value of “micro-conversions” such as an email sign-up. What is your conversion rate from email newsletter pushes? How much are those customers worth?

The point that I’m trying to make here is that yes, conversions/sales/leads are great. But in order to capture all of the value from traffic coming to your site – marketers need to thinkabout developing a “micro-conversions” strategy (email signups, downloads, page-views on key pages of the site etc..) In each case you are developing a relationship with someone that is more than likely new to your site and has the potential to show equal if not greater value than an immediate sale.

Filed under: Conversion Tracking