I am always surprised when I find businesses measuring Ad effectiveness based on click-thru rate. CTR is a simple measurement of clicks given as a percentage of impressions. That is, for a given volume of ad impressions, some number of readers have clicked-thru to your site. Unfortunately CTR can be very misleading. If you create a gee-wiz ad (such as click here to WIN), you can make your CTR soar, but if 100% of those clicks bounce, or otherwise don’t go past your landing page, you have wasted your money. What is needed is some kind of conversion or success metric to indicate that a positive step has been taken beyond just clicking the ad.
Conversion tracking is offered within Google’s, Microsoft’s and Yahoo’s the Ad interface. To track conversions, a code snip-it is placed on a confirmation page and information, like total purchase amount, can be captured. For a eCommerce site this provides straightforward business case as it is easy to understand that paying $1.00 for a click that result in a sale that nets $2.00 is a good investment.
If you don’t sell on-line, you can measure demo requests, requests for information, or file downloads as conversions. For service businesses, if the prospect selects your Contact page, where your street address, phone number, or email link are displayed you have established a clear ‘buying signal’.
I highly recommend turning on conversion tracking and installing the conversion code for every search engine you work with. Once this is enabled, you will have an additional column in your ad account showing ‘conversions’. Use conversions to help you tune the wording in your ads and to see which keyword phrases are producing the best results. One note, if you rely on a Contact page as a success metric, be sure to remove address, phone number, email contact, etc. from other pages on your site or your conversion rates will be skewed low.
There is also a conversion measure is also available in Google Analytics called Goals. Google Analytics Goals lets you identify a single page visit as a goal or visits to a series of pages can trigger a Goal. Setting ‘Goals’ helps you identify your most fertile source of leads and tune your advertising budget accordingly.