While impression share, time on site, average CPC, average position, conversion rate, CTR, first page bids, and quality scores are all important metrics, when looked at individually, they can actually cause you to make misinformed decisions.
Search marketers depend on data to make decisions. Bids are raised, keywords are paused, and ad text is changed based on data. Unfortunately many decisions are being made based on metrics that portray results in a misleading fashion.
While all of the following metrics are important, when looked at individually, they can cause you to make misinformed decisions.
This metric is most likely one of your Google rep’s favorite. Impression share, while valuable in some cases, can provide a drastically inaccurate snapshot of your PPC campaign’s performance.
As SEM managers do their thing, keywords are paused, bids are decreased or increased, dayparting is set up all based of performance. If a set of keywords doesn’t convert well or isn’t relevant to your business, then don’t use them. When impression share is calculated it doesn’t take your optimizations efforts into an account and thus can be quite inaccurate.
Another metric, while valuable, that can provide an inaccurate look into your campaign performance. This metric was useful back in the ’90s when everyone was sending traffic to their homepage and expecting the user to find what they were looking for. Now this metric is becoming increasingly irrelevant with campaigns that use sitelinks to send people to the most relevant page on the site.
Analytics tools such as Google Analytics also come with some flaws related to this metric. Analytics tools often only track up into the last action taken by a site visitor and don’t accurately record how long the visitor stays on the last page of their visit. For more info on this discrepancy please check out this article.
Averages lie, as Melissa Mackey pointed out in an earlier SEW post. When it comes to CPCs, your “average” only tells part of the story.
For example, throughout the day your CPC is heavily affected by your competition. You may bottom out at $2.00 CPCs and spike at $100. But paying attention only to your average CPC can cause you to grossly under estimate or over estimate what you’re paying per click.
Just as an average CPC can throw you off track, your average position can do the same. A metric that is heavily dictated by your competition it is important to understand the landscape of your industry.
The numbers of competitors bidding on your keyword set, how many ads are showing in the “top” of SERPs, and other metrics need to be included when making decisions based off of average position.
OK, this one isn’t a metric, but it belongs here. As many SEM managers know, Google and Bing take your daily budget caps less than seriously. In some cases, you can overspend your budget by up to 20 percent. This can be fine for someone spending $100 a day for a campaign but for someone capping out at $5,000, it can be a big difference.
Without a doubt, keeping an eye on your conversion is important. However, depending on your business model, you may be misled by this metric.
When looking at conversion rate from the 50,000 foot level, it can be a great number to show the health of your PPC account. But for day-to-day management, other factors such as the margin of products sold and how you value your different conversions should be the priority.
For example, let’s say you sell one product, but in three different sizes. Each size is sold at a different price and provides a different product margin. Here is the example:
In this case, the advertiser makes a larger profit margin on the large size. If looking at conversion rate all up across the three products, it could lead you to make a poor decision. Taking the next step and granularly breaking out the data will help boost performance.
Click-through rate can be easily manipulated by an SEM manager by boosting your bid and getting your ad into the top 3 positions, using sitelinks or other ad extensions or by utilizing ad text that contains discounts or promotions (Free Shipping, 50% Off, etc.)
Decisions on keyword shouldn’t be based on CTR alone. If a keyword has a historically low CTR but converts below your target CPA and provides profit for the company, then you shouldn’t worry about CTR. Yes, you should attempt to increase your CTR, but the most important factor is how it works out financially for your business and/or client.
First page bids have been a topic of contention for AdWords and me. There have been numerous times when my average position is above 3 but my bid is below the first page bid estimate. First page bid can be used as a guideline, but some simple manual bidding can help you figure out where your bid needs to be to get on the first page.
There will always be a debate on how important quality score is and if you should be bidding on keywords that have a low quality score. The argument then stems to how these keywords are affecting the rest of your account.
The bottom line when it comes to quality score should be your bottom line.
For example, as highlighted in my post about bidding on competitor terms, if the keywords convert and are profitable, then keep using them – no matter what your quality score is. Do continue to optimize and attempt to raise your quality score, but don’t make it the single factor.
All of the above mentioned metrics are important to managing you PPC efforts but they all need to be examined and weighted correctly. No single metric should be the single reason you to pause a keyword or shut down an entire ad group. Performance should be judged by multiple metrics and – ultimately – if it’s profitable for your business and/or client.