Measurement and optimization Flashcards
What’s ROI?
ROI is the ratio of your
net profit to your costs.
One way to define ROI is
(Revenue - Cost of goods sold) / Cost of goods sold.
Why ROI it matters
Make more informed decisions about your budget and bid amounts so that you’re spending the right amount to meet your business goals.
Understand which ads and keywords affect your profit the most so that you can focus your efforts and advertising budget on those things that you know are likely to bring money in.
How it’s used
To measure your ROI, you’ll need to track
conversions, actions that you want your customers to take on your website after clicking your ad such as a purchase, sign-up, or download.
AdWords has two free tools that help track conversions resulting from your ad: conversion tracking and
and Google Analytics.
Conversion Tracking is a free tool that helps you track how many clicks lead to conversions. You can use Conversion Tracking to determine the profitability of a keyword or ad, and track
conversion rates and cost-per-conversions.
Once you’ve started to measure conversions, you can begin to evaluate your
ROI.
Measuring traffic to your website
What are some important things you can measure to help you track and improve a campaign that’s focused on traffic:
Clicks and clickthrough rate (CTR):
Keywords:
Search terms:
Keywords: Keep a close eye on keyword performance with these strategies:
- Update your keyword lists regularly. Pause or remove the words that aren’t working well for you (for example, if they have CTRs below 1%, or low Quality Scores) and add new ones.
- Use the four keyword matching options to help control who sees your ads. Add the Match type column to the statistics table on your Keywords tab
- For a comprehensive view of keyword quality, run a keyword diagnosis
For a comprehensive view of keyword quality, run a
un a keyword diagnosis. It gives you information about your keywords’ Quality Scores and whether they’re triggering your ads. A Quality Score of 5 or higher is generally considered good.
What is considered a good quality score
A Quality Score of 5 or higher is generally considered
Pause or remove the words that aren’t working well for you (for example, if they have CTRs below
1%, or low Quality Scores) and add new ones.
- What to measure for brand awareness
Impressions: Impressions are important to track in any campaign, no matter what your goals are. But they can be especially important .
in branding campaigns, because they represent how many customers actually laid eyes on your ad
- What to measure for brand awareness
Customer engagement: If you’re focused on branding, you can use
use clickthrough rate (CTR) to measure customer engagement for Search Network ads. On the Display Network, though, user behavior is different, and CTR isn’t as helpful. That’s because customers on sites are browsing through information, not searching with keywords.
For Display Network brand awareness since CTR is much lower since people are not clicking ads, you can consider using what other measurement
other measurements like conversions for Display Network ads.
