AdWords Optimization - Optimize ROI
The first thing we need to know when we are talking about ROI is what ROI is. ROI stands for Return on Investment. But simply put, ROI is how much money you're making after you pay your advertising costs.
What is Return on Investment (ROI) Analysis?
ROI is a comparison of benefits to cost expressed as a percentage of the original investment. Advertisers measure ROI by taking the advertising cost and dividing over a specified conversion.
Common ways of measuring ROI are:
A conversion is a desired action performed by an end user. Tracking conversions allows you to understand the effectiveness of your advertising.
Common Types of Conversions
Acquisitions – Cost per Acquisition (CPA)
Orders – Cost per Order (CPO)
Registrations – Cost per Registration (CPR)
Leads – Cost per Lead (CPL)
Page Views – Cost per Page Views (CPV)
Sales – Cost per Sale (CPS)
Transactions – Cost per Transaction (CPT)
ROI Techniques for Keywords
Identify KWs falling within target Cost Per Conversion
Identify KWs falling outside target Cost Per Conversion
What is Return on Investment (ROI) Analysis?
ROI is a comparison of benefits to cost expressed as a percentage of the original investment. Advertisers measure ROI by taking the advertising cost and dividing over a specified conversion.
Common ways of measuring ROI are:
- Cost per conversion
- $10 cost per conversion
- Conversion Rate
- Click to conversion ratio of 2.5%
- Conversion value
- $10 in sales for every $2 spent on advertising
A conversion is a desired action performed by an end user. Tracking conversions allows you to understand the effectiveness of your advertising.
Common Types of Conversions
Acquisitions – Cost per Acquisition (CPA)
Orders – Cost per Order (CPO)
Registrations – Cost per Registration (CPR)
Leads – Cost per Lead (CPL)
Page Views – Cost per Page Views (CPV)
Sales – Cost per Sale (CPS)
Transactions – Cost per Transaction (CPT)
ROI Techniques for Keywords
Identify KWs falling within target Cost Per Conversion
- What are the top converting words?
- What are the top traffic words?
- What are the most cost-effective words?
- Expand the list of performing KWs to leverage success
- Synonyms, related terms, plurals, spelling variations, etc.
- Ensure top performing keywords are not being limited by daily budget
Identify KWs falling outside target Cost Per Conversion
- Try to isolate factors that are negatively affecting underperforming KWs
- Add negatives, review match types
- Ensure underperforming keywords are not monopolising budget
- Reduce amount of impressions being dedicated to these keywords
- Consider lowering bids to improve ROI
Other things that will affect ROI within keywords:
- Add specific to extremely specific terms
- Brand names, Product ID Numbers
- Add conversion focused words
- Buy, purchase, order, rent
- Separate spenders from bargain hunters
- Add negatives: Free, cheap, discount
- Separate shoppers from researchers
- Add negatives: reviews, how to, prices, trailers, what is
- Scrub keyword list for relevant keywords that are not found on the site
- You currently have keyword ‘motorola phones’ but you only sells ‘nokia phones’