Module 3: Measuring and optimizing performance (PART 2)

Question 1

Name five different metrics for AdWords business goals.

Answer 1

• Measuring website traffic
• Measuring conversions
• Measuring return on investment
• Measuring return on ad spend
• Measuring brand awareness

Question 2

What should you measure if website traffic is one of your business goals?

Answer 2

• Clicks and clickthrough rate (CTR): These two metrics help you understand how many people found your ad appealing enough to actually click on it and visit your website.
• Keywords: You’ll want to monitor your keyword performance.
• Search terms: Use the Search terms report to review the list of searches that have triggered your ad, and identify the relevant terms that are driving traffic to your website and add them as new keywords.

Question 3

What should you measure if conversions are one of your business goals?

Answer 3

• Conversions:
  The total number of all conversions made within your chosen conversion window after an AdWords click.
• Converted clicks:
  The tally of all AdWords clicks that resulted in one or more conversions within your chosen conversion window.
• Conversion rate:
  The percentage of clicks that have led to conversions.
• Cost-per-conversion:
  Your total cost divided by your total conversions.

Question 4

Why is ROI (Return on Investment) an important AdWords measurement?

Answer 4

(ROI) = the ratio of your net profit to your costs.

You’ll learn how much money you’ve made by advertising with AdWords and can use that information to help you decide how to spend your budget.

Question 5

What is one way you can calculate ROI (Return on Investment)?

Answer 5

The exact method you use to calculate your ROI depends on your goals, but here’s one way to define it:

ROI = (Revenue - Cost of goods sold) / Cost of goods sold

Question 6

How would you measure ROI (Return on Investment) if your business goal is related to conversions?

Answer 6

You can use conversion tracking or Google Analytics to determine the profitability of a keyword or ad, and track conversion rates and cost-per-conversions.

Keep in mind that the value of each conversion should be greater than the amount you spend to get that conversion.

Question 7

How would you measure ROI (Return on Investment) if your business goal is related to sales?

Answer 7

If your business is web-based sales, you’ll need:

• the revenue made from AdWords advertising (this is the conversion value that you set),
• costs related to your products sold, and your AdWords costs.

You’ll want to calculate your net profit by subtracting your overall costs from your AdWords revenue for a given time period. Then divide your net profit by your overall costs to get your ROI for that time period. Here’s the formula:

Ratio to profit of overall costs = Revenue (measured by conversions) - overall costs/overall costs

Question 8

How would you measure ROI (Return on Investment) if your business goal is related to Page views, leads, and more?

Answer 8

First, you’ll want to estimate the value of the action that you’d like to measure. To calculate your ROI, you’ll subtract your overall costs from your overall revenue. Then divide your net profit by your overall advertising costs. Here’s the formula:

Advertising ROI % = (Total revenue - Total cost)/Advertising costs x 100

Question 9

How else can you estimate values for your leads and page views?

Answer 9

Using a cost-per-acquisition (CPA) measurement

Question 10

How would a cost-per-acquisition (CPA) work and how would you calculate it?

Answer 10

Using CPA allows you to focus primarily on how your advertising costs compare to the number of acquisitions those costs deliver.

CPA = (Costs/Sales)

Question 11

What is ROAS?

Answer 11

Rates on ad spend

Question 12

How would you calculate ROAS?

Answer 12

You need to know the amount of revenue generated by your campaigns and your advertising costs.

ROAS % = Revenue from campaigns / advertising costs x 100

Question 13

Name two ways you can measure brand awareness.

Answer 13

• Impressions:
  Impressions show you how often your ad is shown on a search result page or another site on the Google Network.
• Customer engagement:
  You can use clickthrough rate (CTR) to measure customer engagement for Search Network ads.

On the Display Network, however, customers on sites are browsing through information, not searching with keywords, so CTR isn’t as helpful. You may want to consider other measurements like conversions for Display Network ads.

Question 14

Name two more ways you can measure brand awareness.

Answer 14

• Conversions:
  Conversions can help you see whether your ads are driving branding-related visitor behavior you think is valuable, such as sign-ups or page views.
• Reach and frequency:
  Reach is the number of visitors exposed to an ad. Frequency is the average number of times a visitor was exposed to an ad over a period of time.

Question 15

Name two basic ways to improve ROI.

Answer 15

• Use a landing page that’s most relevant to your ad: When customers click your ad, they expect to see a webpage highlighting the exact product, deal, or information described in your ad.

If they don’t find what’s promised as soon as they arrive, they’re more likely to leave your site without making a purchase or signing up for your service. Be sure that any promotions and discounts mentioned in your ad text are visible on your landing page.

• Use highly relevant keywords and ad text:
  If you use general keywords and ad text, a customer may arrive at your site expecting to find something that you don’t offer. Highly targeted keywords and ad text help ensure that your ads show only on searches relevant to your product or service.

Question 16

Name two more basic ways to improve ROI.

Answer 16

• Adjust your bids:
  The bottom line for any keyword is how much value it generates compared to its cost.

For keywords that show a profit, increase the bid to increase exposure and generate more traffic. For keywords that aren’t profitable, decrease the bids to lower your costs or even consider removing those keywords.

• Add successful sites as placements:
  For campaigns running on the Display Network, you can use the Placements tab to see all of the web pages, apps, and videos where your ads appeared. If you find that your ad performs particularly well on a given website, try adding that website as a managed placement.

Question 17

How can you optimise your keywords to improve ROI?

Answer 17

• Use negative keywords to eliminate unwanted clicks:
• Remove duplicate keywords: Google shows only one ad per advertiser on a particular keyword, so there’s no need to include the same keywords in different ad groups or campaigns. Keep in mind that it’s okay to include duplicate keywords for campaigns targeting different geographic regions.
• Optimize low-performing keywords:
  If a keyword is not directly related to your business, website, and ad text, it’ll trigger impressions and clicks that are not likely to convert into actions you care about, like purchases or signups.

Question 18

What measurements should you consider If you’re optimizing low-performing keywords?

Answer 18

• Keyword diagnosis:
  Performing a keyword diagnosis will give you a detailed view of each keyword’s Quality Score along with tips for improvement.

(To diagnose your keywords, hover over the speech bubble icon next to the status for any keyword in the “Keywords” tab. You’ll see a help bubble appear with information).

• First page bids:
  Check your keywords’ estimated first page bids, which is the approximate cost-per-click (CPC) bid needed for your ad to reach the first page of Google search results when a search query exactly matches your keyword.

You can use this estimate, which is based on the Quality Score and current advertiser competition for that keyword, to get greater insight when planning your bidding strategy.

Question 19

How can you optimise your Ad text to improve ROI?

Answer 19

Enhance your ad with extensions:
Ad extensions tend to improve the clickthrough rate (CTR) of your ads.

Depending on the products or services that your business offers, you might consider using different ad extensions. For example, sitelink extensions allow you to add links to your website and help people find what they’re looking for, call extensions let people click a button to give you a phone call, and location extensions help people nearby find your nearest storefront.

Question 20

Name the three different stages of the buying cycle.

Answer 20

1. The awareness stage
2. The research and comparison stage
3. The buying stage.

Question 21

How can understanding the buying cycle help you optimise Ad text to improve ROI?

Answer 21

Understanding what stage within the buying cycle a customer might be in helps you:

• Know what keywords to use to separate the serious buyers from the online equivalent of window shoppers. For example, customers searching with terms like “reviews” or “ratings” are probably still researching the product and might be less likely to make a purchase at that stage.

You can filter out such customers with negative keywords or direct these customers to more research-friendly parts of your site.

• Choose a call-to-action which should reflect the action that you consider a conversion, whether that’s a sign-up, a request for more information, or an actual sale. Conversion-related calls to action will set the right expectation for customers in various stages of the buying cycle.

Question 22

Describe one way you can optimise your Bids to improve ROI.

Answer 22

• Experiment with bids and budgets to see what works: Test different bid amounts and budgets and measure how effective the change is, test bids for profitability and ROI, and test budgets for ad exposure.

We suggest adjusting amounts in small increments to allow your keywords to accrue conversion statistics and performance data with the new settings. Allow at least a few days between changes so you’ll have enough performance data to make an informed decision.

Question 23

Describe a second way you can optimise your Bids to improve ROI.

Answer 23

• Adjust your keyword bids:
  With conversion data, you’ll better understand how profitable your keywords are with their current bids and can identify which keywords could be more successful with adjusted bids.

> For keywords that show a profit (such as having high conversion rate and low costs), you might try increasing their maximum cost-per-click (CPC) bids.

While costs may increase, your ad position could rise and provide more ad exposure, potentially increasing your conversion rate and ROI. In other cases, it may make sense to lower the bid for a keyword even if the keyword is profitable. By lowering the bid, you’ll lower the average amount paid, which may increase the profit margin for that keyword.

> For keywords that aren’t profitable (such as having a low conversion rate and high costs), you might try decreasing their bids to lower your costs.

A lower bid is likely to decrease the keyword’s average position, the number of impressions and clicks it receives, and as a result, the cost it incurs. Not only can this strategy improve your ROI on low-performing keywords, but in some cases, it can also free up part of your budget so you can invest in more valuable keywords.

Question 24

Describe a third way you can optimise your Bids to improve ROI.

Answer 24

• Use ad scheduling to automatically change your bids throughout the day:
  Ad scheduling includes an advanced setting which lets you adjust the pricing for your ads during certain time periods. Use the bid adjustment feature of ad scheduling to automatically take these actions:

> Increase your CPC bids by a certain percentage on days or times of day that are most profitable for you.

For example, if you find that your ads get the best results before noon, you can set your bids higher during that timeframe to try and get more impressions and clicks.

> Decrease your CPC bids on days or times of day when appearing in a high position doesn’t result in profitable clicks.

Question 25

How can you optimise your Budgets to improve ROI?

Answer 25

• Allocate your budget according to performance:

An important aspect of budgeting is making sure you have appropriate budgets for each campaign.

For keywords that are profitable, you probably want to show them all the time. To do this, the campaign’s budget needs to be sufficiently high so the campaign isn’t limited by budget.

If you’d like certain keywords to receive maximum traffic, make sure they’re in campaigns whose daily spend isn’t reaching or exceeding its daily budget consistently.

Try to prioritize your products or services and then match budgets to each campaign based on priority. If your overall advertising budget is limited, find budget from campaigns that have unused budget or that don’t convert well, then reallocate that budget to high-performing campaigns that are limited by budget.

Question 26

How can different targeting options help increase your brand awareness on the Display Network?

Answer 26

You can pick and choose placements, or specific websites or sections of sites within the Display Network on which you can run your campaign.

You can select sites based on specific topics or the target audience that you’re trying to reach, or you can choose any site that meets your branding criteria.

You might also want to add other targeting options, such as age, gender, or interest categories, to reach as many people as possible without significantly limiting your reach.

Question 27

How can different ad formats help increase your brand awareness on the Display Network?

Answer 27

Since a goal of a brand-engagement campaign can be to interact with your target audience, we suggest using rich-media ad formats.

With the Display Network, you can reach customers using text ads, but you can also try a range of more visual formats, like static images, flash animation, and video.

For example, if you’ve produced a video ad that you’re using on your local TV channel, consider uploading it to YouTube. You can set up a free YouTube user channel and customize its design to reflect your brand

Question 28

How can different bidding strategies help increase your brand awareness on the Display Network?

Answer 28

With brand engagement campaigns, you want to maximize your brand’s exposure on relevant sites.

CPM bidding is typically a good fit for a campaign like this since you can set your bids directly from the performance goals you’ve set for your campaign.