Over the past several months, in part due to increased economic pressures, we have seen an increase of importance placed on improving return on investment (ROI) from search-based activity, particularly from PPC campaigns. ROI attribution and measurement becomes especially important when justifying the cost of the online sponsored advertising and improving the return on advertising spend (ROAS). Here are some tips on improving your search performance and getting the best ROI possible.

1.      Know Your Analytics

This statement may seem fairly redundant, but all too often search marketers find themselves flying blind without proper analytics. Much of this article will focus on using analytics to optimize for ROI and knowing the limitations of your own analytics program is extremely important. Additionally, ensure that your ROI metrics are tied back to search-related key performance indicators (KPIs).

 ROI attribution can become more cumbersome in the business-to-business (B2B) market place as sales cycles can be extremely long as well as potential of the sale occurring offline. In cases such as this, ensuring lead sources can be captured into CRM systems can provide vital statistics to the health of your campaign. (Yes, pun intended) Several CRM programs, such as SalesForce and Oracle, offer integration with some of the leading Analytics software providers. Simple Access or Excel spreadsheets can also be used to tieback the sales, lead value, or other KPIs to your search activities.

 2.      Optimize Landing Page Performance

So you’ve paid for the click; what now? Your landing page and ad copy must work together to assist in the sale of your product and convince the user into taking your desired action and converting into a lead/sale. On average, you only have 8 seconds to reassure the prospect that you are what they are looking for and convince them to stick around.

 Landing page testing is incredibly important to the success of a paid search campaign and to improving ROI. With a landing page the simple combination of titles, copy, images, and call-to-action can make sweeping differences in the performance of the page. The difficult question is which combination? Unfortunately; other than best practices there is a limited supply of instructions and guidelines to assist search marketers in developing the perfect landing page, but there are testing tools that can help us along the way. Testing tools can range in abilities and cost, but one of the better landing page testing tools on the market is Google Website Optimizer. It is fairly intuitive, easy to implement, and provides clear results analysis, best part is that it’s FREE.

 Your landing pages are perhaps one of the most important factors influencing the ROAS for Paid Campaigns. Simple landing page testing can be an easy quick win for any paid search campaign.

 3.      Optimize Conversion Paths 

Conversion path optimization is the next important aspect of ROI optimization. We all know that attrition occurs at each stage of the conversion path, the key to optimizing ROI is mitigating the loss at these key stages.

 Many of the analytics tools on the market do offer conversion funnel analysis which will allow you to dive deeper into the ‘fall out’ that occurs at each stage in the process. The key objective in this analysis is to determine at which stage in the funnel you are getting the largest amount of abandonment. Once you know where the users are leaving the funnel, you can then focus in on the potential problems with that page; what barrier exists, hindering final conversion?

 Enquiro’s has used funnel analysis to optimize conversion funnels for its clients and has improved the conversion rates by up to 150%.

 4.      Leverage your SEO & SEM Together

Enquiro’s research has proven a significant branding advantage can be achieved by having a top paid ranking and top organic ranking above the fold. However, budgets can be saved by lowering paid ad exposure for those key phrases also occupying top organic position; allowing for more focus in other key opportunities.

 With your SEM campaign, you are able to quickly test the traffic volumes and conversion rates for many keywords as well as determine what the best messaging is for communicating with your market. This knowledge can then be applied to your SEO efforts to help mitigate the costs of PPC. Although organic rankings take time to take achieve, there is significant benefit the can be attained by gaining organic rankings for your top search phrases.

 Additionally, through landing page testing and ad testing, it’s possible to determine what messaging resonates with your target audience and which calls-to-actions are most effective.

 5.      Trim the Fat

We all have heard of the 80/20 rule, but in paid search campaigns it’s more like the 95/5 rule. Ninety-Five percent of your revenue will come from 5% of your keywords. Using your analytics and appropriately tagging your conversions to indicate, on the keyword-level, the source information can assist you in finding those 5% of the keywords and truly optimizing those ad groups. On the flipside this source can also indicate which keywords are simply driving up costs without producing results.

 This should not be confused with eliminating long-tail keywords because they simply have not collected significant click volumes, but more so, finding those head and torso keywords that are costing a lot of money without driving conversions. Don’t be afraid to lose the dead weight in your campaigns.

 6.      Use Testing Budgets

When looking at paid search campaigns, once you feel you have developed a winning formula, there is a hesitancy to not want to mess with it. I know this feeling all to well, if it’s not broken, don’t fix it; but the truth of the matter is, if you don’t break it once in a while innovation cannot occur. To work around the hesitancy of making changes for fear of losing ground or ROI, assign a certain percentage of your budget that can be used for testing. Depending on how risk adverse you are, will determine how much you will assign.

 Using a testing budget (in a separate campaign or even account) will allow you to perform keyword analysis, landing page testing, A/B ad copy testing, as well as experiment with different bidding strategies without affecting the performance of the main account. Once a winning strategy has been proven it can be migrated over to the main account to improve its performance overall.

 One important caveat about testing to remember: one experiment = one independent variable. That is to say only make one change at a time; otherwise you will have difficulty in attributing positive or negative results to the correct changes.

7.      Leverage Quality Score

Although I  normally encourage focus be placed on optimizing based on conversions, optimizing  on the basis of quality score has its advantages, there is nothing detrimental from using quality score to enhance your ROI. So what do I mean with that seeming contradiction in terms? Simple, look at the quality score suggestions and your campaign goals. Make the changes to your quality score that will not adversely affect your campaign. For example, using your ads to pre-qualify visitors may decrease your CTR; in turn negatively affecting the quality score. However, pre-qualifying visitors prior to their click will achieve a stronger Conversion rate, thereby increasing your ROI. Using keywords in the ad copy and landing page can boost the quality score without losing the pre-qualifying messaging.

 8.      Use Micro Conversions as an ROI Indicator

Sometimes it’s not always easy to attribute ROI to your paid search campaigns, in fact in most cases its down right difficult. There is hope, however, in using micro conversions. Micro conversions are those actions that a user will take on the path to conversion. For example sites using a demo can calculate the conversion rates from demos to leads to sales. It simply takes a bit of reverse engineering to the sales cycle and determining values.

 However, with appropriate analytics, you know the demo to lead ratio, the lead to sale ratio, and average sale amount; therefore using your average sale amount multiplied by your lead to sale ratio, gives you your value per lead, then simply multiply that once again by your demo to lead ratio and you’ve calculated your value per demo. The same can be applied for filling out a contact us form, engaging in an online chat with a sales person, adding to cart, product customization, etc. Micro Conversions can assist in determining the value of a paid visitor by the actions taken leading up to the offline sales process where tracking can be more difficult, impossible even.

This is the final installment of the 4-part series on key PPC best practices (PPC Best Practices Part 1, Part 2, and Part 3).

Speak Their Language

There has been constant debate as to what to use for keyword analysis with regards to long-tail versus head phrases and which yields the better results. Head phrases are the very generic and broad search queries where there is enormous search volume, but costs associated with the keywords are quite high. Torso keywords are the more-specific keywords; the 2- to 4-word search queries that still have lower search volume compared to the head phrases, but also tend to be cheaper. Long-tail keywords are the keyword phrases over 4 words where the costs tend to be minimal, but search volume is also sparse.

When doing keyword development, first look at the torso phrases and develop your keyword strategy using 2- to 4-word search queries to develop the keyword basket. Once you have the torso phrases, run the account and closely monitor the performance of the individual keywords down to your most granular KPI (ideally ROI or cost per conversion on the keyword level).

Once you know which keywords are driving highly-qualified traffic in the torso, it is then possible to look at the longer-tail keywords associated with the high converting torso phrases. Accounts with literally millions of keywords are not necessary when only a small percentage are actually working; spend where the ROI is made.

When developing your keyword basket, make sure you step into the mind of the searcher. Which keywords is your target market most likely to be using when searching for your product/service? Ensure you are not simply bidding on the marketing language you use internally, but also the language with which your market is most likely to initiate a search. (Hint: Talk to your sales department. They know the language your customers will be using.)

We recently took over a PPC campaign from a client doing it in-house and our first step was to look at the keywords. By refining the keywords based on user intention we decreased the Cost Per Click (CPC) by 23% and doubled the Click Through Rate (CTR). The conversion rate also increased substantially.

It is also possible to break out keywords by the Purchase Decision Process (PDP). By paying close attention to the keyword refinement process, it is possible to determine which keywords are being used at the beginning of the research phase, in the consideration and comparison phase and in the purchase intent phase of the PDP. By allocating these keywords into appropriate campaigns, you can then control the budgets associated with those keywords and effectively increase ROI, awareness, brand reach or whatever your PPC goals are.

Quality Score Is an Indicator, Not a Destination

There has been lots of debate around quality score and what it means to PPC advertisers. The long and short of a quality score is that it is designed to assist the customer. Google and Yahoo (with MSN just coming on board) have been using quality scoring to increase the quality of ads to improve the user experience. That being said, quality score should not be managed.

If you, as the advertiser, are looking to provide the consumer with the best experience possible (a good idea if you’re looking for conversions), then your quality score should naturally be good. A colleague of mine, Chris Davies, gave the perfect analogy for quality score: "It’s the ‘check engine’ light." If you have a poor quality score it serves as indication that it’s time to look under the hood and see what’s causing the issue. Look to your ad copy, landing pages and keywords, or reassign ad groups to adjust your quality score.

Ultimately, if you have a poor quality score and conversion rate is good and cost per conversion is good, then the few cents difference a better quality score can make is irrelevant.

Stop Measuring Cost Per Click; Start Measuring Cost Per Conversion

Ultimately, every change made to a PPC campaign should be to lower the cost per conversion. Therefore, don’t be afraid to bid aggressively on high-converting, high-quality, traffic-generating keywords and bid lower on the other 90% in your campaign if at the end of the day you are achieving the end goal.

Stop Thinking PPC, Start Thinking Consumer-Initiated Marketing

Over the past year, several new options (and the list keeps growing) have been made available for online advertisers to create more sophisticated online marketing campaigns. We’ve seen the implementation of display advertising through Pay Per Click (PPC) providers as well as a significant movement towards local and mobile advertising. This movement in the market represents a paradigm shift, from simply a PPC-focused strategy, to thinking about all the channels associated with consumer-initiated marketing conversations.

Several of these options include display advertisements, paid inclusion, local listings and Pay Per Action (PPA). With each of these options there are several different revenue models (and by revenue, I mean for the search engines). Therefore, it is important to ensure you have effectively allocated your budget to maintain your ROI (Return On Investment).

PPC and PPA models are the most effective for the advertiser based on the business objectives of driving users to the site and gaining conversions, whereas a CPM-based model is more effective from a branding perspective.

With each of these models it is extremely important to know what your end goal is and how to reverse-calculate to estimate what each conversion is worth, and through your conversion rate what each visitor is worth to you and consequently how much you should be paying per thousand impressions. Sadly enough, too many advertisers initiate PPC campaigns without knowing what the end goal is. A word of caution: Traffic is not an end goal!

Start with the End in Mind

What is it that your PPC campaign needs to do for the business objectives? What Key Performance Indicators (KPIs) do you have in place for the measurement of the plan? There are many metrics to measure the effectiveness of a PPC campaign versus the effectiveness of your optimization. What’s the difference? PPC campaign effectiveness is judged by its impact on the company’s bottom line, and the return on investment. Campaign optimization is measured by an increase in CTR and improved quality score.

The goals of your PPC campaign should be those conversions that speak directly to the business objectives and business model of the company. When you begin to optimize your campaigns, it will become clear how measuring the effect of the PPC campaign on the business objectives, not performance metrics, is critical to improving ROI.

Next up, I’ll dive deeper into the PPC process in PPC Best Practices Part 2 of this 4 part series.