Analyzing Keyword Costs and Cost Per Conversion
Knowing your cost-per-click and cost-per-conversion
rates is vital for a successful PPC campaign.
A lot goes into any successful pay per click advertising campaign, but we know you like small chunks of information, so for the sake of keeping you awake, we’ll only go over two of the most important elements below.
Free PPC Analysis
The cost of your paid search campaign is affected by the competition, your bidding strategy, the quality score(s) of your landing pages, your ad placement(s) i.e. search engine & content network, and other factors like seasonal ad campaigns
One key to running a successful PPC campaign is frequent analysis. Two sets of data that you must always know are the keyword cost-per-click (CPC) and the keyword cost per conversion. An analysis of these factors is an essential part of paid search marketing success.
So how does your business analyze the keyword cost-per-click and the cost per conversion & why is this data important?
Cost-Per-Click (CPC) Average
Determining your cost-per-click is super easy. We’ll start with what goes into determining the cost-per-click for a keyword. To find the cost-per-click average for your entire campaign, take your spend and divide it by the total amount of clicks. Narrow down to a specific keyword, and divide your total spend on that word by the clicks it received, and you’ll find that word’s average cost-per-click. Most pay per click networks do this for you, so put away the calculator.
So why is cost per click by keyword important? It’s very common for marketers to discover that keywords aren’t as profitable as they originally thought. Without a review of each keyword’s cost per click, you may end up wasting thousands, but more important, you may never find the best and most profitable keywords. Review your cost per click by keyword often, especially in the beginning.
learn more about determining cost-per-click
Cost Per Conversion Average
Like cost-per-click, finding your cost per conversion is super simple. Analyzing your cost per conversion is huge when it comes to deciding if your pay per click campaign is meeting your company goals. The amount you bid on an ad is not your cost per conversion, but rather what you’re willing to pay for a click. A conversion is a metric(s) you decide on that indicates a visitor from your PPC campaign did what you wanted. It’s usually a sale, a website signup, or a signup to recieve emails from your company. It can be whatever you want, but it’s important to decide on a conversion(s), so that you can measure your campaign’s success.
You can usually set conversions up by placing code on conversion pages, or by importing conversions through your analytics provider. To find your cost per conversion, take your total advertising cost and divide it by the total number of conversions. This is also done by most pay per click networks.
Like cost-per-click data, it’s important to analyze your cost per conversion data often. Conversions are the most important part of the campaign (unless you’re only branding), because a conversion is typically the action you wanted your visitor to make. Keep in mind that even if your cost per conversion is low, and your campaign is profitable, you likely can still improve with constant analysis and revisions. Drill down deep, you may find that keywords with a low CPC don’t convert, so regardless of the cost, you’re wasting money. Analyze often and make small measurable changes.
learn more about conversions from Google AdWords
Constant analysis is important to the success of your campaign. The competitive landscape in every industry changes, so regardless of your current results, it’s important to check on your campaign frequently to ensure waste is a minimal.
If you don’t want to deal with any of this, you can of course hire us to create, implement, manage and analyze your campaign.
Whatever you do, remember, deciding to just wing it and let it ride for months or years is, as they say, a recipe for disaster.
