How to achieve a 25% conversion rate on Google Adwords
Does this headline sound impossible to you? Generally speaking we consider a 10% conversion rate to be a good cross-industry average, but if you get everything just right, it’s possible to exceed 10%.
The key to achieving stellar conversion rates is rigorous testing and analysis of the data. First of all, make sure you’ve got the right tools to hand. You need Adwords Conversion Tracking set-up, and you need Google Analytics set-up, and then you need to link both accounts. When you’ve done all that, you’re ready to play.
Run your Adwords for a few days. Make sure your Adwords follow the usual rules. Now you’ll have some meaningful data to play with. Analytics will tell you exactly what’s going wrong with your landing page. The first thing I look for is the bounce rate. The bounce rate measures what percentage of visitors leave the moment they enter. You can expect a reasonable amount of organic traffic to bounce, it’s the nature of the web. But if you’re bouncing +50% of your paid traffic you’ve got one of three problems:
1. Your Adword is misleading. You’re offering a £7.99 Adword, but landing them at a £12 product page.
2. Your Landing Page is uncompelling - the visitor likes the Adword offer, but is unconvinced upon arrival.
3. There is a technical problem - 404 - page not found sites don’t sell much.
Your next port of call is the exit page analysis. Analytics will tell you how long people are spending on your site, where they enter and most importantly where they leave.
Back to 25% conversion rate on Healthspark. As you will recall this is a start-up store which is best described as in beta release. We’re doing loads of testing, and landing page analysis. We currently have PayPal and GoogleCheckout, but are waiting for the bank to provide a Merchant Account so that we can have an integrated payment system. My gut feeling was that payment was hindering sale conversion. This is often the case, customers are fickle, and a slow site, or anything slightly unusual will spook your potential customer.
However, Analytics revealed a high bounce rate on the Rosehip page, and it turned out that the default offer was putting customers off. The Adword itself gave a specific price offering of £7.99, but the options on the landing page defaulted to a 2 for 1 offer at £12.99. Switching this default option off lifted the conversion rate from 5% to 25% with a cost per customer acquisition of £1.50.
What this anecdote reveals is that micro-testing, and daily improvements on both your Adwords, and ecommerce platform are crucial if you want to win.
AdWords viel zu teuer?
I’m in Berlin this month working on a consultancy project and my forthcoming book. You would be amazed at how much work government agencies are putting into small businesses.
There are small business agencies like the Industrie-und-Handelskammer zu Berlin - they are a well-funded agency that provides practical consultancy, and funding for websites and emarketing. Then there’s the Bundesministerium fur Wirtschaft und Technologie (BMT) that provides high quality research papers for businesses of all shapes and sizes. This is a nation that is taking the internet and its opportunity very seriously.
And now to this post, the BMT reckons that B2B Ecommerce in Germany is more advanced than any other EU state (twice as much as the UK), and that B2C ecommerce is expected to be worth 580 billion Euros.
Imagine my surprise then when I created Healthspark’s first German Adword campaign.
The average price per keyword, I reckon is 50% lower than UK counterparts, and many target keywords aren’t even being competed for. Furthermore, many Adword advertisers are producing Adwords with atypical Adword gaffs, namely:
- no specific product
- no price information
- generic campaign
- generic landing pages, with no specific opportunities for action.
What’s a good CTR (click-through rate) for Adwords?
You won’t find a definitive answer on this, as it varies greatly depending on the market and keyword. There are many campaigns with very low CTR’s (<1%) that still manage to deliver profits, but a high CTR is vital for several reasons:
Google rewards a high CTR with a lower CPC (cost per clickthrough). As a rule, Google will always reward content that is more relevant to searchers, and an Adword that delivers a high CTR, must by definition be delivering content that searchers want. It helps of course, that a higher CTR also delivers more profit to Google’s bottom line. Aiming for a high CTR is a great way to beat your competitors in the cost of customer acquisition.
SEO specialists spend a lot of time optimising your page, so that good content is rewarded (good tags, good inbound links), but as always in Adwords and Organics, relevant content is the key.
Seth Godin would like this, if you’ve got something worth saying, and customers want to hear it, Google will reward you.
If you’re delivering a high CTR you are consistently reaching the right audience for your product, so unless your Ad is a blatant lie, you should have a high conversion rate. Watch for a high bounce rate on your site generally. If you’re suffering from a high bounce rate, something’s wrong with your landing page.
Google will also reward you with a lower CPC if you achieve a high CTR, and a low bounce. Its algorithm will also look at the keywords and copy of your Adwords to ensure they cohere with the target landing page.
Finally, a higher CTR maintained over a period of time you will achieve a lower CPC as Google also rewards persistent advertisers - that’s why you shouldn’t plan your entire online strategy around 24 hours of testing.
As always the way to achieve all of this is lots and lots of testing.
Questions you should ask if you want to make money online
1. Are you selling a physical or a digital product?
My forthcoming book will be focussed on selling easy-to-shift physical product that people are actually searching for. It’s possible to make good money out of shifting digital product (many of you will be reading this as a free blog though!), but in general the digital market faces certain problems for the budding e-entrepreneur. The main problem is that the content that people really want can already be obtained by suppliers with massive leverage (e.g. Apple - iTunes) or illegally (e.g. LimeWire). You can pitch original content, software widgets, ebooks etc., but you’ve got a lot of work to do in establishing a market that doesn’t already exist.
At least with physical product, you will be shifting stuff that people want, and they know they want it.
2. What barriers to entry are there?
Ideally, you need a market which is difficult to enter or understand. Establishing supplier relationships for exercise bikes, for example, is fairly protracted.
3. Can you get good supply? Agree terms with your suppliers.
Will you be drop-shipping? (The manufacturer holds inventory, and ships when you get an order). Will you be buying stock? If so, can you buy small quantities, and achieve Amazon like JIT shipping.
4. What’s your price advantage? Put together a spreadsheet of prices
Get comparison prices using searches on Google Adwords, eBay, Amazon Marketplace and a price comparison engine, e.g. Froogle, Kelkoo or PriceGrabber. Calculate your likely margin.
5. How much will it cost to get a customer? Estimate the cost of conversion.
This is an approximate estimation, but you can do the following. Create a test page using a free blog tool (e.g. Type Pad, Word Press, or Blogger.com). Create an Adwords campaign, and look for the amount you’re paying for each keyword for each click-through (CPC). Ideally, you should expect around 6-10% click-through rate (CTR) if you’re Ad is well written, and compelling against the other Adwords being served. Of the 10% that clickthrough, you should be aiming for a 10% conversion rate.
Now, these are rough numbers, but I’ve seen them work across a range of industies. So 100 people see your Ad (100 impressions, cost of an impression = zero). 10 people click through (the exact amount you pay for each click-through is determined by a real-time auction with your competitors, but let’s assume £0.20 per clickthrough). 1 person buys, so the cost of the customer acquisition is £2 (10 x £0.20).
If your margin on a tub of vitamins is £6, you’ve just made £4 profit, and you’ve got a business.
Chitika eMiniMall better than Adsense?
Chitika is an online PPC advertising company geared up for Web 2.0. Amazingly, they seem to be competing very effectively with Adsense (20,000+ site, and 2 billion monthly impressions, reaching 60 million unique visitors a month).
Adsense is Google Adwords for content sites. In an earlier blog, I’ve recommended opting out of the content network when you’re running Adwords campaigns as you can’t be sure where your site will be published. (but if you’re canny, you can do some very effective site specific advertising - we’ve just run a very effective campaign for www.healthspark.co.uk).
Although content Adsense now allows imagery, most of the advertising remains in the Adwords text link format.
Chitika’s USP is that they’ve created some really innovative widgets for bloggers and web 2.0 sites, like the eMiniMall. In the eMiniMall, this mini-shop concept works really well, particularly in product-specific blogs. Users have reported a 50% increase in CTR.
Over the next few weeks we’ll be trialling the eMiniMall over at naturalhealthlibrary.org, and I’ll post the results when I’ve got them.
Google Analytics Data loss
You may have seen this recently on the Google Analytics login page:
System Message: Analytics Processing Delay from April 30th to May 5th
Google Analytics experienced a data processing error from April 30th to May 5th. Almost all of the data has been recovered and is currently being reprocessed. The recovered data will be reflected in your reports within a few days. Please note that a small percentage of data, particularly in the area of e-commerce reporting, was not recoverable from those dates.
The trouble with free software is that you can’t really complain when you get this kind of loss, it just goes with the territory, and at least Google are sorting it out, almost. The worrying bit is the loss of e-commerce data, because these are the sites who live by this data.
I love Analytics. I’ll do a post shortly on how to get the most of its impressive integration with Adwords, but I can’t help but feel frustrated (and a bit paranoid) about how Google handles the data. For example, when you set-up conversion goals, you won’t see any real conversion data for 24 hours. Why is this? Are Google’s servers so slow, they can’t cope with the request for 24 hours? Nope, they’re slow enough to make sure you have to experiment with your campaigns to achieve success. Experimentation = Adspend.
Google Adwords Checkout
The number of Adwords carrying the checkout symbol is on the increase. For those of you who don’t know, Google Checkout is Google’s answer to Paypal. The incentives for using the checkout go way beyond a secure transaction, as the presence of the Google Checkout badge has been know to increase the clickthrough rate by 23%. Also, the brand identification increases the probabilities of customer conversion, and retention. Google’s sales spiel looks like this:
 |
Increase sales. Google Checkout users click on AdWords ads 10% more when the ad displays the Checkout badge, and convert 40% more than shoppers that have not used Checkout before. |
|
Process sales for free. For every £1 spent on AdWords each month, merchants can process £10 in sales the following month through Google Checkout for free. For all other sales, the charge is a low 1.5% + £0.15 per transaction. |
|
Protect yourself from fraud for free. Our fraud prevention tools stop invalid orders from reaching you. And our Payment Guarantee policy helps protect you from chargebacks. |
So the economic benefits of clear, but it’s surprising how few people know how to integrate Google Checkout into their store, and into their Adwords campaigns. Here’s how:
1. Get a Google checkout account here : http://checkout.google.com
2. Now the tough bit; integrate with your store. Most mainstream providers already offer checkout integration, and Google also provides code for most of the open source platforms. (OS Commerce integration is very easy). If you’re interested in getting the Adwords bit rolling for a few products, you could simply produce a buy it now button and slap it on the page.
3. When you set your account up, in the merchant profile, place the root of your domain (e.g. webreality.co.uk, not www.webreality.co.uk).
4. In Google Checkout : settings : Adwords, add your Adwords Customer ID (when you’re logged in to Adwords this is displayed top right).
4. Run your Adwords campaigns as normal.
5. Initially, nothing will change, after the first Google Checkout transaction, there is a delay, and then your Checkout Badge will be active on your campaigns.
You can set your Adwords Checkout badges to Inactive but it will affect all campaigns. It’s worth running tests to ensure that the Checkout badge does actually yield a higher conversion rate.
Adwords Manager - tax free?
We’re just in the process of launching our new Adwords Manager. It’s currently in beta mode, and we’re looking for skilled Adwords users who’d like to give it a spin. We’ll give you free sign-up in return, and we’ll credit any burnt adword spend, so you’ve got nothing to lose.Jersey is outside of the EU, so we’re able to book Adwords tax-free, which is particularly helpful if you’re in the EU, and a consumer or a small business under the VAT threshold. Google Europe is headquartered in Dublin, so wherever you are you’ll pay 21%, unless you use us. But our Purple Cow is that Tax Free Adwords will do more than save you tax. We’ve written a bulk uploader that works a bit like mail merge. We can merge your data into your own Adword templates, so you can produce really targeted Ads for each product in your catalog. For example ….Hewlett Packard 57, £17.99 becomesHP 57 Printer CartridgeOnly £17.99 for Genuine HP Ink+ 5% Off Orders of 2 or More!www.day2dayshop.comTax Free Adwords will then add appropriate keywords, and link your ad directly back to the product page. Quite cool really. There’s loads more, but in the meantime if you’d like to beta-test and let me know what you think I’d be very grateful.
10 minute website testing
So you’ve got a stellar web idea, you know it will work, but will the market take it? In the old economy, in fact, even last year, you would have built your site, built your brand, built your logo, ordered your stock, labels. You’ve handed over hard-earned cash to your accountant, incorporating companies, set-up bank accounts. You’ve got your fulfilment agent ready to fulfill thousands of items per day, and now you’re best part of £30k down. Now, you can do it in a hair’s-breadth. You can test market the concept with a free site from Google, Squidoo (I like this one), or if you’ve got a bit of knowledge, you could buy a template from Template Monster, throw it in with os commerce and give it a whirl. I built a test platform for HealthSpark, a new vitamins and supplements uk healthstore, using the latter route. The build time was 30 minutes, and the site will be ready to receive test transactions next week. Once you’ve got your test site live, you can run a pilot Adword campaign, and get immediate data on likely cost-per-click, and if you’re ready to fulfill, you can get customer conversion costs. Nice work.
Landing Page revisited
Time and time again I click on Adwords to find myself on a generalised page with little or no relevance to the keyword I searched for on Google. Not only will these advertisers find themselves spending more on Cost per Click (CPC, because Google rewards relevancy), they’re chances of conversion are greatly reduced. You’ve got less than 10 seconds to ensure the user can complete the desired action (e.g. sign-up, or add to basket) immediately.The key elements you need to consider on your landing page are:
My friend and colleague Mark Evans, gives us a perfect example in his Exercise Equipment site.
To achieve this level of precision, Google recommends multi-variate testing. Adwords gives such granular detail, that you can measure yield on small changes to your landing page layout and copy. At Webreality we’ve seen multi-variate testing yield an increase from 6% to 10% conversion rates for our customers, so it’s definitely worth the effort.
