10 Easy Ways to Optimize Your PPC Landing Pages & Increase Conversions

It’s common knowledge that a professional website design can increase conversion rates and sales. A professional website design ensures trust and credibility with your users. But website design and landing pages can play a part not just in SEO, but in PPC too.

Actually, there is an entire procedure to optimize PPC campaigns including writing successful PPC Ad Copy, Optimizing Your AdWords Campaigns Now, back to PPC landing page optimization. The tactics I describe in this post will not only improve your Quality Score which can increase your ad position for a lower cost, but can also help convert more people that come to your website.

Now, I will admit that most of these tips are for lead generation, not all of these tips would apply to an ecommerce website.

1. Call to Action/Buttons – It’s no secret that adding a call –to- action or a button that is large and very noticeable on your PPC landing pages will help increase conversions. Anything that draws attention to a user is more likely to get clicked on. Tell people what you want them to do on your landing page, don’t just assume they’ll know automatically.
   
   
2. Minimal Navigation – The key to successful PPC landing pages is keep the user to from getting too distracted. Remove the top, left or right hand navigation from your main site on your PPC landing pages. Simply have your company logo at the top left of the page with a link to your homepage. That will be enough for people to click on if they need more information before converting.
   
   
3. Important information above the fold – Some people who are searching for a service like yours are sometimes in a hurry. If they enter your landing page and don’t see what they need to do within the first 5 seconds, they’re likely to bail. Be sure that your call to action, button, or form is above the fold. Be sure to check Google analytics to see what resolution size the majority of your users are currently using. This will help your designers make the important information above the fold for most of your users.
   
   
4. Easy-to-scan copy – I’ve worked on clients before that use way too much industry language in their PPC landing pages. You have to think that if an executive is looking for a service they’re likely to ask their assistant, intern or even a receptionist to do research before they engage in anything. While the executive may know all the industry jargon the assistant or intern may not. Also, these people who are searching for many companies are in a hurry, and simply just scan the copy on your landing page and don’t necessarily read through it all the way. So break up your copy into several paragraphs instead of one large paragraph. And I like to use the rule of thumb to put your benefits or advantages of choosing your company in a bullet list or numbered list so it stands out more prominently.
   
   
5. Few images to convey professionalism – Some PPC landing pages I have seen have a lot of well, dorky images that don’t convey any professionalism whatsoever. This can really turn off a potential client and make you look untrustworthy. Have one to 2 images on your PPC landing pages that show professional looking people, smiling as if they have just engaged in yoru services and are incredibly happy. Also having too many images on your PPC landing page will make your load times longer.
   
   
6. Fast loading times – One factor of the Google Adwords Quality Score is the load times of your pages. If it takes more than 10 seconds to fully load your pages that’s way too long. It should take less than 5 seconds. Large flash files, too many images, or animated graphics could hinder your fast load times. Also, if I have to wait for a flash animation to load before I can get information about your services, I’m more than likely not going to stick around or come back.
   
   
7. Dynamic headlines – Using dynamic headlines on your PPC landing pages is a great way to better target what the user is actually typing in the search box. Dynamic headlines are generated by tracking URLs that will insert the specific keyword into the headline. This is like using dynamic keyword insertion in your PPC ads, only it’s for your landing pages. If the page headline is more targeted to what the user typed in the search, they’re much more likely to continue reading and complete an action.
   
   
8. PPC keywords in your landing page copy – Many people think this is only true for SEO, but you still need to include your PPC keywords in the copy of your PPC Landing page. This will not only help improve your Quality Scores, but will also help your users connect better to your copy.
   
   
9. Short contact form – You could potentially be driving away qualified leads by having a contact form that is too long. If your contact form is running below the fold, it’s too long. You should be able to see the ‘submit’ button above the fold. Look at your current forms and only require the information you truly need. If someone sees a very long form, they may think, ‘This is going to take too long to fill out’ and could possibly skip that process altogether.
   
   
10. No Clutter – This is really a no-brainer, but unfortunately too many people make the mistake of dumping too much content on their PPC landing pages. You should have one main goal of your PPC landing page, not 3, 4 or 5. Remove any extra copy that isn’t necessarily useful to the user. Remove any unnecessary images or icons.

If you need any persuasion to make changes to your existing landing pages, just take this for an example: if you were to make changes on your landing pages, and increase your conversion rates by .5%, add that to your current sales and see how much of an increase that is. You would be surprised how much additional revenue .5% would drive.

If you have any additional PPC landing page tips that will help increase conversions that I have not mentioned feel free to add them in the comments section!

PPC Magic: 3 Steps To Turning Hundreds Of Keywords Into Millions

Basically, the long tail approach dictates that we not only use high-search volume, general terms, but also load up our accounts with many, many niche terms—the theory being that these tail terms are cheaper due to less competition and also more relevant so they drive higher engagement with users.

I’ve seen campaigns with a few hundred terms perform very well. I’ve also seen campaigns with millions of terms perform poorly. Remember, we test everything in search engine marketing! So, other than the actual logistics of managing a huge list, there really isn’t any drawback to adding and testing many keywords if you think they even have the slightest chance of providing value to your advertiser. I’m going to go out on a limb here and say that for beginners to PPC, try to limit your lists to 10,000 to 20,000 max.

The key is using modifiers

So, how do we take the hundreds of terms we uncovered during our research and turn them into tens of thousands (and maybe even millions) of long tail terms? The secret is with modifiers. For example, if you’re selling used cars, you may take a core term like used car and add buying modifiers so now you have purchase used car, buy used car, shop for used car, etc. As search marketers looking for tail terms, we may combine our core words with multiple modifier lists. For example, if we matched up every term with the dealer’s car brands, we wouldn’t have just purchase used car, but alsopurchase used Saturn, purchase used Ford, purchase used Toyota etc.

Each advertiser will have their own set of modifiers that make sense. However, some common modifier directions include:

Buying cycle. Used for awareness/interest terms, modifiers such as info onor research could be used. For users further down the funnel, buy, shop, purchase and so on also make sense.

Adjectives. If you’re selling broadband service, then description words likefast, speedy, and quick could be important. For banks, it might be performance words such as high yield or safety-conscious words like insured.

Geographical. Lists of cities, towns, states, DMAs, metro areas, etc. If the advertiser is a U.S. based national brand, you may almost always use states and top DMAs as modifiers. Certainly car insurance Omaha should be treated differently than car insurance New York City. Similar geographical modifiers can be used elsewhere in the world.

Here are three steps to using modifiers to build giant keyword lists.

Step #1 – Identify your core terms. If you’ve been through all of the research ideas in this column, you will have already compiled a pretty comprehensive list of keywords from keyword tools, competitor research, and so on. So, you should be able to look through all of the terms and quickly pull out a high level list of core terms. If you’re an online retailer, maybe those core terms are your main categories. Or, if you’re a service company, you will probably have a handful of terms that are used most when people search for your company.

As an example, I’ll use a clothing retailer based in the western region of the U.S. Here is their core term list. Make sure to include plurals and any very common misspellings in the core list.

• T-shirt
• T-shirts
• Jeans
• Shirt
• Shirts
• Dress
• Dresses

Step #2 – Generate your modifier lists. 5 lists that come to mind for this retailer are:

Sizes: Small, Medium, Large, XL, XXL
Color: Red, Blue, Green, Yellow, Brown, White, Black, Orange
Purchase terms: Buy, Shop, Browse, Purchase, Deal, Cheap, Inexpensive,
Qualifiers: Brand name, Designer, Name Brand, Quality, Chic
Western States: California, Arizona, New Mexico, Nevada, Oregon, Washington, Colorado, Montana

Step #3 – Generate permutations. You can use a permutation tool such as Keyword Lizard or Keyword Combinations to input your various lists. You’re always going to want to use your core terms in combination with modifiers where it makes sense. Here’s a screenshot from the free Keyword Combination tool:

Suddenly, you have tail term lists with designer jeans California, small blue shirt, and inexpensive XL t-shirts. In fact, from your seven core terms and five simple modifier lists, you can easily generate over 200,000 keywords.

Okay, here’s where the magic happens. Check the math: 7 Core Terms X 5 sizes X 8 colors X 7 purchase words X 5 qualifiers X 8 States = 78,400 variations of your core words.

Abracadabra!

Actually, you have more than that. There are keywords that won’t contain every list. So you really add one more modifier per list that is a “blank space”. Once you do that, you get 186,624. Wow! In fact, if you were to add just one more keyword to one of those lists, the total available permutations would be 207,360! You won’t use all of those keywords, especially if you cap them at 3-4 words per keyword phrase. However, chances are you’ll be using many more modifier lists and core terms so the list could grow to millions very easily. Ultimately, you certainly will have plenty of great tail terms to test.

And, if you do it right, you can easily segment the keywords into groups and campaigns. For this example, there could be a “sizes campaign” or a “states campaign.” That way you can address similar words with the most relevant ad text and landing pages. Next week, we’ll dive deeper into campaign and ad group segmentation.

55 Quick Search Engine Optimization Tips

Everyone loves a good tip, right? Here are 55 quick tips for search engine optimization. Most folks with some web design and beginner SEO knowledge should be able to take these to the bank without any problem.

1. If you absolutely MUST use Java script drop down menus, image maps or image links, be sure to put text links somewhere on the page for the spiders to follow.

2. Content is king, so be sure to have good, well-written and unique content that will focus on your primary keyword or keyword phrase.

3. If content is king, then links are queen. Build a network of quality backlinks using your keyword phrase as the link. Remember, if there is no good, logical reason for that site to link to you, you don’t want the link.

4. Don’t be obsessed with PageRank. It is just one isty bitsy part of the ranking algorithm. A site with lower PR can actually outrank one with a higher PR.

5. Be sure you have a unique, keyword focused Title tag on every page of your site. And, if you MUST have the name of your company in it, put it at the end. Unless you are a major brand name that is a household name, your business name will probably get few searches.

6. Fresh content can help improve your rankings. Add new, useful content to your pages on a regular basis. Content freshness adds relevancy to your site in the eyes of the search engines.

7. Be sure links to your site and within your site use your keyword phrase. In other words, if your target is “blue widgets” then link to “blue widgets” instead of a “Click here” link.

8. Focus on search phrases, not single keywords, and put your location in your text (“our Palm Springs store” not “our store”) to help you get found in local searches.

9. Don’t design your web site without considering SEO. Make sure your web designer understands your expectations for organic SEO. Doing a retrofit on your shiny new Flash-based site after it is built won’t cut it. Spiders can crawl text, not Flash or images.

10. Use keywords and keyword phrases appropriately in text links, image ALT attributes and even your domain name.

11. Check for canonicalization issues – www and non-www domains. Decide which you want to use and 301 redirect the other to it. In other words, if http://www.domain.com is your preference, then http://domain.com should redirect to it.

12. Check the link to your home page throughout your site. Is index.html appended to your domain name? If so, you’re splitting your links. Outside links go to http://www.domain.com and internal links go to http://www.domain.com/index.html.

Ditch the index.html or default.php or whatever the page is and always link back to your domain.

13. Frames, Flash and AJAX all share a common problem – you can’t link to a single page. It’s either all or nothing. Don’t use Frames at all and use Flash and AJAX sparingly for best SEO results.

14. Your URL file extension doesn’t matter. You can use .html, .htm, .asp, .php, etc. and it won’t make a difference as far as your SEO is concerned.

15. Got a new web site you want spidered? Submitting through Google’s regular submission form can take weeks. The quickest way to get your site spidered is by getting a link to it through another quality site.

16. If your site content doesn’t change often, your site needs a blog because search spiders like fresh text. Blog at least three time a week with good, fresh content to feed those little crawlers.

17. When link building, think quality, not quantity. One single, good, authoritative link can do a lot more for you than a dozen poor quality links, which can actually hurt you.

18. Search engines want natural language content. Don’t try to stuff your text with keywords. It won’t work. Search engines look at how many times a term is in your content and if it is abnormally high, will count this against you rather than for you.

19. Not only should your links use keyword anchor text, but the text around the links should also be related to your keywords. In other words, surround the link with descriptive text.

20. If you are on a shared server, do a blacklist check to be sure you’re not on a proxy with a spammer or banned site. Their negative notoriety could affect your own rankings.

21. Be aware that by using services that block domain ownership information when you register a domain, Google might see you as a potential spammer.

22. When optimizing your blog posts, optimize your post title tag independently from your blog title.

23. The bottom line in SEO is Text, Links, Popularity and Reputation.

24. Make sure your site is easy to use. This can influence your link building ability and popularity and, thus, your ranking.

25. Give link love, Get link love. Don’t be stingy with linking out. That will encourage others to link to you.

26. Search engines like unique content that is also quality content. There can be a difference between unique content and quality content. Make sure your content is both.

27. If you absolutely MUST have your main page as a splash page that is all Flash or one big image, place text and navigation links below the fold.

28. Some of your most valuable links might not appear in web sites at all but be in the form of e-mail communications such as newletters and zines.

29. You get NOTHING from paid links except a few clicks unless the links are embedded in body text and NOT obvious sponsored links.

30. Links from .edu domains are given nice weight by the search engines. Run a search for possible non-profit .edu sites that are looking for sponsors.

31. Give them something to talk about. Linkbaiting is simply good content.

32. Give each page a focus on a single keyword phrase. Don’t try to optimize the page for several keywords at once.

33. SEO is useless if you have a weak or non-existent call to action. Make sure your call to action is clear and present.

34. SEO is not a one-shot process. The search landscape changes daily, so expect to work on your optimization daily.

35. Cater to influential bloggers and authority sites who might link to you, your images, videos, podcasts, etc. or ask to reprint your content.

36. Get the owner or CEO blogging. It’s priceless! CEO influence on a blog is incredible as this is the VOICE of the company. Response from the owner to reader comments will cause your credibility to skyrocket!

37. Optimize the text in your RSS feed just like you should with your posts and web pages. Use descriptive, keyword rich text in your title and description.

38. Use captions with your images. As with newspaper photos, place keyword rich captions with your images.

39. Pay attention to the context surrounding your images. Images can rank based on text that surrounds them on the page. Pay attention to keyword text, headings, etc.

40. You’re better off letting your site pages be found naturally by the crawler. Good global navigation and linking will serve you much better than relying only on an XML Sitemap.

41. There are two ways to NOT see Google’s Personalized Search results:

(1) Log out of Google

(2) Append &pws=0 to the end of your search URL in the search bar

42. Links (especially deep links) from a high PageRank site are golden. High PR indicates high trust, so the back links will carry more weight.

43. Use absolute links. Not only will it make your on-site link navigation less prone to problems (like links to and from https pages), but if someone scrapes your content, you’ll get backlink juice out of it.

44. See if your hosting company offers “Sticky” forwarding when moving to a new domain. This allows temporary forwarding to the new domain from the old, retaining the new URL in the address bar so that users can gradually get used to the new URL.

45. Understand social marketing. It IS part of SEO. The more you understand about sites like Digg, Yelp, del.icio.us, Facebook, etc., the better you will be able to compete in search.

46. To get the best chance for your videos to be found by the crawlers, create a video sitemap and list it in your Google Webmaster Central account.

47. Videos that show up in Google blended search results don’t just come from YouTube. Be sure to submit your videos to other quality video sites like Metacafe, AOL, MSN and Yahoo to name a few.

48. Surround video content on your pages with keyword rich text. The search engines look at surrounding content to define the usefulness of the video for the query.

49. Use the words “image” or “picture” in your photo ALT descriptions and captions. A lot of searches are for a keyword plus one of those words.

50. Enable “Enhanced image search” in your Google Webmaster Central account. Images are a big part of the new blended search results, so allowing Google to find your photos will help your SEO efforts.

51. Add viral components to your web site or blog – reviews, sharing functions, ratings, visitor comments, etc.

52. Broaden your range of services to include video, podcasts, news, social content and so forth. SEO is not about 10 blue links anymore.

53. When considering a link purchase or exchange, check the cache date of the page where your link will be located in Google. Search for “cache:URL” where you substitute “URL” for the actual page. The newer the cache date the better. If the page isn’t there or the cache date is more than an month old, the page isn’t worth much.

54. If you have pages on your site that are very similar (you are concerned about duplicate content issues) and you want to be sure the correct one is included in the search engines, place the URL of your preferred page in your sitemaps.

55. Check your server headers. Search for “check server header” to find free online tools for this. You want to be sure your URLs report a “200 OK” status or “301 Moved Permanently ” for redirects. If the status shows anything else, check to be sure your URLs are set up properly and used consistently throughout your site.

Written By: SEJ

Competitive Intelligence in SEO & Social Media

Understanding thy competition is a golden rule in any kind of business, ranging from online marketing to politics to running the local mom & pop corner grocery store.

I would like to reprint some competitive intelligence tactics that I previously put together here on Search Engine Journal that will also be helpful.

Understanding what your competitors are doing online is a must and absolute priority when launching a new website that is entering a competitive space and also when established websites want to keep an eye on their competition. By knowing what your rivals are doing in their SEO and social media space, not only will you have a better knowledge of their online marketing strategy, but you can also emulate what is working for them, and generate internal ideas to stay proactive.

Furthermore, by understanding what your competition is doing in terms ofon-site SEO, link building, social media marketing, developing third party properties and other search marketing tactics; you can also identify potential new threats which are making it up the rankings and also unearth tactics which are working from them (or not working for them), that you can improve upon, and thrive from in your overall marketing strategy.

And doesn’t everyone love playing spy every once in a while?

Identifying the Competition

The first step in identifying your online competition is checking out the search results for your most popular keywords. Do not look only at keywords which drive the most traffic, but also your longtail keyterms and also the keyterms which convert the most sales, leads or phone calls.

By comparing the sites which you compete with in these various groups of keyterms, you will more or less identify different styles of competition that you can learn from and monitor. Here are some types of sites which may not appear for your basic keyterms in the serps, that you need to monitor.

• Affiliate sites are your competition. Not only sites which run the affiliate ads of your rivals, but also your own affiliate ads, because if they are ranking above your company’s site, they are taking money out of your pocket (or the search division’s pocket) by driving traffic and sales that you should be driving. Furthermore, affiliates don’t have to deal with internal regulations and beauracracy, so they can more or less get away with more tactics like publishing loads of content, paid linking, and taking full advantage of the social media outlets your management or PR division is not letting you tackle. Affiliates are the ninjas, mercenaries and dark armies of your industry, learn from them.
• Offline competitors sometimes don’t do the best SEO, maybe they just launch a flash site or brochure page and don’t rank at all, but they may have an advertising agency with a massive creative team building up their social media presence, hold contests or sweepstakes, build up Facebook followings, have a massive PPC budget and spend a lot of money on site advertising and sponsorships. By monitoring what the do in online advertising, you can identify keyterms and copy which work for them in their PPC campaign and also find out the sites or networks where they are serving graphic advertising, and contact those same networks about striking a deal which will assist with your SEO or linking. If your competition is serving ads there, then those sites hit your target market.

On-Site Competitive Intelligence

Now that you have identified the sites you need to monitor as part of your competitive intel strategy, now start looking into the on-site factors which help them rank in the search engines. You may find not only what they are doing right, but what you are doing wrong. When performing a competitive intel report, I suggest including your own site in the report and even having a third eye, like an SEO consultant or internal staff member, do the research on your own site.

• Site URL Structure : By tracking the URL structure and file naming structure of competitors, you can determine the best route to gain a competitive advantage over other companies.
• Site Development and Coding Structure : Which language is the site being coded in. Are there any conflicts in programming language or separate IP’s? This information is vital to SEO competitive intel.
• Use of Analytics : Is the competitor tracking user behavior and referrals via Google Analytics, Hitbot, Omniture? Looking into their analytics systems help give an idea of how much information they are capturing from their visitors and how advanced their internal tracking is – which may define how advanced their SEO team is.
• The directory files and URL structures of listings pages : This will be used to determine which techniques these competitors are using for their individual pages, their content, meta and URL structures, and how these reflect in the Google, Yahoo and MSN rankings.
• Page Title and META Title Review: Page titles are one of the most influential HTML elements used in an optimization campaign. Since the optimization of this variable is connected to rankings and actual links in the Search Engine Results Pages (or “SERPs”), an analysis has been conducted to provide which sites use a preferred title structure and which just use repetition of their company name.
• META Tag Review (Description / Keywords): META tags have limited relevance to rankings, but do play a part in that search results often feature the META Description tag. Knowing this, an optimized description that instigates action from the searcher is preferred. Further, integrating the targeted keywords allows for them to be bold or otherwise emphasized in the listings – which helps to convert more clicks in the SERPs through to the optimized site.
• Navigational System Review: Search engines spider, or seek out new content based on the links they find to resources on a page. Navigation systems are the most consistent manner for building internal link popularity, so research evaluates the overall strength of these systems used. For example, a Flash based navigational system is horrible for SEO, whereas consistent keyword driven links with keywords integrated are optimal.
• Broken Links : If a site has broken links, broken files or lists non-existant pages, then Google will lower the ranking of that site because the engine believes that the site is under construction. Run a link check using Xenu Link Sleuth to see if your competition is overlooking such linking and internal navigation issues.
• HTML Code Validity: Using the W3C Validation tools, your competitors’’ web sites have been reviewed. This allows the engines to promote sites that deliver a consistent and predictable user experience. Run each site through the validation tool, and reported back the number of errors noted.
• Design & SEO Integration: Similar to the internal navigational structure, the use of some HTML elements are preferred over others for SEO purposes. Our research and analysis of competing site designs have been provided in this document.

Offsite Competitive SEO Elements

Not only do onsite tactics assist with the ranking of a website, but sometimes more importantly offsite tactics can benefit the competitive advantage to boost a site from the bottom of the front page on Google, to the top three traffic driving positions.

By monitoring offsite SEO tactics, and social media tactics, you can get a rounded feel for the link building strategies your competitors are using, their participation in blogs, sites they may own which are harnessing social media equity and directing it to their main site, if paid linking is working for them, and how they’re doing on Delicious, Digg and in vertically targeted social networks. All of these factors have a direct influence on search engine rankings and you will not only learn what your competition is doing, but what they are not. And by identifying these holes, oversights or even genius ideas… and applying them to your marketing strategy, you can further excel within your industry.

• Local Listings : Determine the local SEO listings that your competition has made on Yahoo Local, Citypages, BOTW Local, MSN Live and other local search engines or local profiles. These differ from the results shown in organic web search sometimes and can be an indicator of local seo techniques used or overlooked by the competition.
• Number of Inbound Links: Using Yahoo! Site Explorer, report on the number of inbound links to each of the analyzed web sites. As a rule, the more links and the more relevancy – the better. Search Engines like Google use inbound links to help shape the overall level of authority of a web site.
• Linkbait or Viral Marketing : How are these competitors building links? Are they running link baiting programs and actively having articles submitted to Digg & StumbleUpon? Are they using any Viral Marketing techniques like videos, widgets or badges which link back to them and assist with their rankings. Dig into their campaigns to find out what they are using, and monitor the social networks to identify future social linking campaigns.
• Social Media : Do they actively use social media to market their business? Does their company have a Wikipedia page? How do they rank for their own brand name and are social profiles served in these results? Have they even secured their brand across social networks? Do they distribute online video? This research will help determine a social media plan and also identify competitive advantages that you can use to your advantage.
• Blogging : Do these companies blog and who is doing their blogging? Are the blogs on a subdomain, a whole other website or in an internal directory file. How often do they post? How many subscribers will they have? This information will assist you construct your blogging strategy and possibly unearth some ideas.
• Paid Link Research: It is difficult to say with certainty that an inbound link has been purchased. There are however signs where common systems like Paid Directories and Link Networks are used on a site. Research of inbound, paid links to your competitors from sidebars, ads on newspaper sites or bad paid linking in footer links may give you some insight as to which anchors they are targeting and what is working for them.
• Site visits and Traffic : Using a mix of data from Alexa, Compete and other web traffic estimation tools, estimate the traffic of the competitors in terms of visitors, time spent on site, top referrals and other information driven by third party tools.
• Page Rank and other Metrics : Compile a list of competitive metrics including Google PageRank, SEOmoz PageStrength, Delicious Bookmarks, StumbleUpon voting, Google Page Indexing, Google Competitive Indexing.
• Competitive Rankings : Last but not least, run a ranking check using a search engine friendly software for each of the terms which you have determined for targeted SEO keyterms via your comeptitive research. Check the rankings for these sites and terms in Google, Yahoo, Ask.com, Bing and maybe some engines which are used specifically by your industry.

This may sound like a lot of information to monitor, and you’ll probably want to add more industry specific metrics to your research dependent upon how SEO savvy your market is. But in the long run by documenting this information now, and revisiting it once a quarter, you will have a pinpoint idea of the tactics your search rivals are utilizing, what they are not, and even what they are picking up.

If you need any help with the tools needed to perform a lot of this research, please contact me via email or Twitter (in my profile box at the top of this post) or check out our SEO Tools post for some ideas.

Are there any other competitive intel tactics you recommend? Please feel free to share them in the comments below.

ROAS and Launching Better PPC Campaigns

Return on Ad-Spend, or ROAS, is a metric calculated by dividing the revenue generated from an ad campaign, by the cost of that campaign. It can be applied to any sales situation that has an advertising spend, even a bake sale:

Lets say your mother gave you a pan of brownies to sell at the bake sale, but it costs $50 to get your booth and marketing materials set (we’ll call $50 your ad-spend).

If your brownies manage to produce a total revenue of $50, you’ve broken even, or gotten a full return on your ad-spend.

If you had made the brownies yourself, and they’d cost you $50 to make (we’re talking primo brownies here), then your total investment is actually $100, but ROAS only takes into account ad-spend. So in the same situation you’re still getting a full return on your ad-spend, just not a full return on your investment.

A handy exercise to go through with new clients before you launch a PPC campaign is to calculate the potential ROAS of the keywords you’re targeting.

There are a few unknown, and a few fuzzy variables – we’ll have some tools to help us come up with potential traffic and potential costs, but we’ll have to use some educated guessing to come up with reasonable estimated ranges of conversion rates and click through rates – in truth, the conversion potential of your keywords, through your ads, to your landing pages, for your clients products, are up to you and your marketing team.

Calculating ROAS:

In order to calculate a predicted ROAS in PPC advertising you need to know the revenue that each conversion brings for each product you’re marketing (which could be associated with the keyword, or ad-group level), the potential cost of the campaign, and a half-decent guess at what kind of a conversion rate you might achieve. Once you know what a conversion is worth, all of the info that you need is available in rough form from Yahoo and Google’s keyword tools.

Yahoo give us the estimated number of clicks and cost per click (CPC) for a keyword so we can calculate the expected cost of the campaign per month. Adwords give us approximate search volume along with the estimated CPC, which we can use to determine a rough estimate of traffic at different click-through-rates, and what it will cost us. If we supply a hypothetical conversion rate to calculate conversions, and we know the company’s revenue from each conversion, we have what we need to calculate ROAS. So like I said, it gets fuzzy, but it’s still half-decent for predicted information.

These simple equations are expressed like this:

To further the confusion of the ROAS metric, it is commonly calculated in two *different* ways. One way subtracts the PPC ad-spend from the revenue right in the calculation, the other way does not. Let’s look at each equation and how to interpret the results.

Method one:

With method one revenue of $100 and an ad-spend of $100 would produce a full return on ad spend of %100. So with this method of calculation seeing 100% ROAS simply means you’re breaking even. A 50% ROAS would mean you’re only recouping half of the ad-spend you’ve put out. With this equation in a situation where you have $200 revenue and $100 ad-spend, doubling your ad-spend is expressed as an ROAS of 200%.

Method two:

In this formula the cost is subtracted from the revenue, forming a profit metric that is relative to the ad campaign. Plugging the same numbers into this, $100 ad-spend with $100 cost, break-even comes out to 0% ROAS. With this equation, in a situation with $200 revenue and $100 ad-spend, doubling your ad-spend is expressed as and ROAS of 100%.

Be sure you know which type of ROAS you’re looking at, because obviously the interpretation is different for each.

The basic approach of pre-checking keywords for ROAS can help you launch campaigns that stand a better chance of being profitable quickly, rather than analyzing data after some time (and some money!) has passed. It can let you know going in, all else equal, approximately what costs-per-click should stand a good chance of performing well. The problem is, all else is never equal.

A number of variables affect your ROAS, and tweaking CPC is only one part of a comprehensive management approach. Some argue that ROAS should only be used as a general indicator because it is too broad in scope, and doesn’t take into account the overall costs of sales.

Remember from the bake-sale, if you’ve got extra costs external to ad-spend (like $50 worth of primo brownie ingredients), your ROAS metric is never going to reflect true ROI – only somebody who is familiar with overall costs associated with a product or service can really interpret ROAS calculationsfor that product or service. ROAS is not the same as ROI.

As long as you keep it in perspective of larger ROI influences, ROAS as a guide to see how each variable affects profit margins can be quite interesting to look at. For those account managers that understand both their products and the metric well, there can be a benefit to being able to monitor ROAS at each level of a PPC campaign over time.