Google AdWords Optimization Strategy to Increase Conversion Rates, Lower Cost Per Conversion

by Laura Thieme (Google AdWords Certified and Google Partner)

Need ways to increase revenue? After you launch your Google AdWords or paid search advertising campaign, it takes just 8 minutes to show up in Google.  Your website will need at least 100 clicks to receive at least 2 conversions.  A conversion is a phone call, contact form or online order.

Key Performance Indicators (KPIs) on a Google AdWords Account

Key Performance Indicators (KPIs) on a Google AdWords Account

Here are some goals to achieve with Google AdWords campaigns:

  1. 5,000 impressions per campaign/ad group
  2. 100 clicks
  3. 2% click-thru rate (CTR)
  4. 2 conversions (contact form confirmation which could be a lead or online order confirmation, or phone call that lasted at least 30 – 60 seconds)
  5. 2% conversion rate (CVR) or cost of acquisition (cost/conv)
  6. average position 3 or better (1-2 for mobile); top 3 for paid search text ads on laptop, desktop
  7. acceptable cost per conversion of $50 or less; depending on your cost of fulfilling the order or lead

In order to improve any of the above KPIs, here are some basic recommendations:

Increase impressions:

  • You need at least 5,000 impressions with a 2% click-thru rate (CTR) to get 100 clicks
  • Try 5-10 keyword phrases per ad group as your initial test
  • Expand up to 25 keyword phrases if relevant to the ad landing page
  • Try different match types to increase impressions – you might be limiting the campaign too much by using [exact match] or “phrase match” on too many keywords
  • +broad +match +modifier requires each keyword to exist but in any particular order.  It also allows additional keywords to be used.
  • Try not to require too many keywords to exist in a specific order
  • Example of 4 match types:
    Broad Match Modifier: +black +sweater
    allows any keyword before, in between and after but requires the word +black and +sweater to be included in the searcher’s query
    Phrase Match: “black sweater”
    allows any keyword before or after, but does not allow any keyword in between
    Exact Match: [black sweater] allows only those two words and nothing else
    Broad Match: black sweater
    allows just about anything with relevance to black sweater or sweater to show up.

Increase clicks:

  • You need at least 100 clicks for a 2% conversion rate to receive two online orders at a 2% conversion rate
  • To increase clicks, make sure your campaign ad groups and keywords are at least in average position of 3.0
  • Make sure Google isn’t telling you to increase the bid for a given keyword
  • Raise the bid to Google’s recommended price, to see if CTR and the number of clicks improves
  • Make sure you have sufficient budget for each campaign
  • Make sure you limit each campaign to 1-3 ad groups, with no more than 25 keywords per ad group

Increase CTR:

  • Your goal is a minimum of 2% CTR for each campaign, ad group and keyword
  • Make sure average position is at least 3.0 or better
  • For mobile clicks, you need to be in the 1st or 2nd position – monitor if more than 1 paid ad is shown for your target keywords to best determine this
  • For laptop, desktop search ads, you need to be in the top 3
  • For shopping search, test to make sure you’re showing up on the first set of results, there is no position data available at this time in Google AdWords for shopping
  • Match types will help you with improving CTR
  • Quality Score – make sure you can see the Q Score for each keyword.  If you have a very low Q Score for your keywords, do all that Google recommends for improving your Q Score
  • Make sure your ad is highly relevant to your keywords
  • Make sure your ad is competitive to other ads to ensure the best CTR
  • Use ad extensions as additional ways to catch their attention
  • Make sure your target keyword is in the ad headline or description line 1 or 2
  • Review search query data for the past month or 100 clicks, and determine if there are keywords you should negate
    Example for “black sweater”
    -boys -toddler -girls (maybe you only sell black sweaters for women)
    -“how to” -make -crochet -knit (make sure you aren’t promoting crafts when you sell them in a store)

Increase Conversions:

  • Review search query data to see if you can negate certain keywords, this is really important
  • Do this often, at least once a month
  • Make sure your negative keyword match types are not [exact] unless there is a specific reason to do this
  • Match types
  • The rest is really landing page optimization, test 3 different pages to determine what converts, what doesn’t
  • Make sure that if you test 3 different landing pages, you don’t change anything else in the ad copy or keywords
  • Your changes on each landing page can be very subtle
  • Make sure it’s easy to use your contact page, and that you test it often
  • Make sure it’s easy to checkout on your shopping cart page, do not require anyone to register and if you do this, make sure it’s an option, but focus first on getting people to order (where you will get their contact info anyways)
  • Is it price that is hurting you? You don’t have to be the lowest price, just in the market
  • Is it shipping that is hurting you? For e-commerce retailers, this is important to review.  What are your ranked competitors offering.

Lower Cost Per Conversion:

  • This is the hardest KPI to improve.  It takes a lot of time fixing all the other stuff above, before you’re ready to lower your cost of conversion or acquisition.  But if you follow the other optimization tactics, you may find that you automatically lower Cost Per Conversion over time.
  • Look for negative keyword opportunities – don’t pay for traffic that consistently fails to deliver tracked conversions.
  • Are there keywords that convert, but cost too much? Consider the volume of leads, then consider whether or not you could re-allocate that budget to consistently performing keywords that send lead volume, but consistently deliver leads at a lower cost per conversion/acquisition.

For more ways to improve your AdWords KPIs, see other blog posts we’ve written in the past about PPC Management.



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