How do you know if your AdWords campaigns are working? That can be difficult to answer. You want your ad spending to generate sales. As obvious as that may sound, determining how various factors in your AdWords campaigns affect sales can be a bit tricky. Disruptive Advertising performed a study where they looked at data from well over half a million keywords and measured the return-on-investment against a plethora of variables. They wanted to answer, “What predicts profitability in an AdWords account?” Check out the findings brought to you by Branding Innovations Today below. Then, put them into play in your own marketing strategies.
3 Powerful Lessons
- High CPC = low viability- With any pay-per-click, the more clicks cost, the less you’re making. In the study, it was shown that ROI quickly drops off as your cost-per-click (CPC) goes up. Even for costly products, greater CPCs were directly linked to a low ROI. In fact, paying more than $5 for an e-commerce click was essentially deciding you didn’t to make money on that product.
- Long-tail keywords don’t work- Based on the findings, you might think long-tail keywords would be the smart option. These have less competition and are therefore cheaper. However, that only works to a point. Keyword length affects ROI, and it seems that the most profitable keywords usually had 15 to 30 characters. When you think about it, it does make sense. Below 15 characters, two problems occur:
- It’s overly non-specific and generates low-quality clicks, or
- It has good volume and intent but is extremely competitive.
Above 30 characters (and particularly above 40 characters), and they’re incredibly specific and have reduced conversion intent. For instance, an account received 127 clicks for the term “how do I remove the terrible smell from carpet that has been flooded using household ingredients.” However, it never converted. Why? Typically, these readers are looking for a specific answer, like the types found on a forum or answer board.
- Higher clicks don’t equal greater conversions- A conversion rate of 5% and a click-through rate of 5%, you may think that doubling your CTR will double your conversions. Nope. As a rule, increasing your CTR typically decreases your conversion rate. There are exceptions, but in the study, higher CTRs were usually associated with lower conversion rates.
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