Friday, June 10 2022

Many brands want their ads to rank at the top of Google and have a great conversion rate. But that can be a challenge for brands.

Understanding the impact of these two metrics and knowing how to think about them when optimizing can improve the overall health of your paid search campaigns.

Vanity versus performance: I want it all

Are you someone who likes to run search queries periodically to see if your brand or your customers’ ads are on the top? It feels good to know you’re number one. I understand. There’s no denying the feeling that all is well in the world when your brand advertising takes pole position.

However, being number one can lead to a higher cost per conversion. There’s this ongoing struggle to deliver both efficiency and volume. This case study looks at that specific problem.

I pulled various account data for this article and looked at the cost-per-conversion relationship between different metrics like absolute top impression share and click-through rate (CTR). The results probably won’t surprise you, but seeing the data often forces you to think about your account differently.

At the very least, I hope to arm you with some data to finally chat with the brand manager who insists his brand is number one.


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Cost per conversion versus absolute top impression share

When Google decided to scrap Average Position in 2019, it was a solid move toward focusing on results rather than vanity. The metric they provided to take its place was Absolute Top Impression Share and Top Impression Share. Giving advertisers what they needed to answer, “Are we number one?” and “Are we above the organic rankings?”

The data in the graph below compares the cost per conversion across all of our accounts (I’ve normalized/indexed them so they can be viewed on a similar scale) against the absolute highest impression share at course of the past year.

The assumption was that the more frequently brands occupied the true number one position, the more these conversions would cost them. Effectively a compromise between efficiency and volume.

The data shows a 60% increase in cost per conversion between ads with less than 10% first impression share and those with more than 80% first impression share. There are definitely outliers. But the trendline tells the story.

Cost per conversion vs. click-through rate

I took the same data and wanted to compare CTR to cost per conversion. It’s a bit harder of a story.

The cost per conversion decreases as the CTR increases with a larger margin (I removed the CTR data scale from top to bottom, left to right). So, having a better CTR offers a better cost per conversion.

Why?

  • Keywords that have a higher CTR likely resonate better with consumers and therefore result in a higher conversion rate/lower cost per conversion.
  • Branded terms typically have the highest conversion rates and CTRs. That’s a debate for another time and another article.

The key to this data set is to focus on relevance. If you focus on relevance, brand or otherwise, you’ll see better conversion rates.

3 ways to use this data to improve your paid search campaigns

Focus on relevance

Google rewards relevance. This comes in the form of higher Quality Scores by keywords matching ad content, which also matches landing pages. The more tightly themed keyword groups you can create, the better.

The best lens to see this is customer experience. Think about what the customer is looking for. What would they expect to experience by reading this advertisement or clicking on the site? The answer to this question is your true north. This will lead you to relevant experience and reward you with better performance.

Understanding Efficiency and Volume

This is a constant compromise that is made in business all the time. Brands do it with product pricing, but we often don’t see it as often in marketing.

Take a group of keywords that are performing well and see how far you can push them. Run a test to increase bids by 25-50%, increase budgets and see what happens.

  • Do you have an additional lift?
  • What was the cost per additional conversion?
  • Is this trade-off better than any other opportunity to spend on other keywords or marketing tactics?

The best part about paid search is the real-time feedback you get with the data to help you make informed decisions. Use this to your advantage.

ABT: always test

This is a combination of the previous two recommendations, but keep testing. Algorithms, your competitors, your customers – they are constantly changing.

Ongoing ad copy testing is just one element, but that shouldn’t get you off the hook more broadly.

Create a test and learn strategy. Work on it methodically. Have a hypothesis and prove or disprove it through your tests. Rinse, repeat.


The opinions expressed in this article are those of the guest author and not necessarily Search Engine Land. Staff authors are listed here.


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About the Author

Jason is currently the CEO of Air tank and is an accomplished CMO and proven leader with over 20 years of experience building strong, profitable teams, working for and with Fortune 500 companies in a variety of industries. Prior to AirTank, Jason served as Executive Vice President of Product for BrandMuscle, an enterprise software and services company focused on Fortune 1000 brands, where he led product innovation and strategy. It earned the company a leadership ranking in the Forrester 2020 Through-Channel Marketing Automation wave. He also spent 16 years working with Rosetta, Razorfish and Progressive Insurance, leading paid, earned and owned media teams in the healthcare, financial services and retail industries. He was named “40 under 40” by Direct Marketing News, was a judge for the AMA Reggie Awards, and has been featured in Forbes and numerous other publications as an expert on the subject.

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