Conversion rate measures the amount of business from website visitors. If a site uses AdWords to deliver 100,000 impressions in search engine results, and 2 percent of those impressions resulted in a click, the site would have 2,000 visitors from AdWords. This is the click rate, which is the first step in tracking performance in AdWords.
If 5 percent of those 2,000 visitors click on an ad on the site or made a purchase, the AdWords conversion rate would be 5 percent.
This 5 percent rate is in line with reports from the Direct Marketing Association claiming that direct response mail has a 4.4 percent conversion rate.
It is worth pointing out that advertisers pay for every mail delivery, They do not pay for impressions in a cost per click campaign. A click is equal to the recipient opening a letter or reading a postcard. A conversion is some form of action beyond that point such as calling the advertiser, buying a product or visiting a store.
Clicks and Conversions: 2 Peas in a Pod
For digital advertising, click rate and conversion rate are tightly bound together.
Six tactics that improve the click-through rate also can improve the conversion rate because they reach customers efficiently. They also focus on relevance.
- Select highly targeted keywords
- Optimize the landing page
- Test the ad copy
- Remove unproductive keywords
- Manage the overall campaign
- Measure the results
Select highly targeted keywords. Effective keyword selection starts with using the AdWords keyword tool to identify keywords and keyword phrases that most closely the page that the campaign is targeting.
A three-word phase is optimal because one or two words usually have the most competition and the highest cost. A phrase with one or two words also has less relevance to highly targeted searches. Less relevance will often result in lower click and conversion rates.
Four or more words in a phrase are hard to find and usually have a small number of impressions. The more specific the phrase, the more targeted and effective the result.
Optimize the landing page. Once a phrase is chosen, landing page optimization requires that the page have the same or similar phrase. They should appear in the title, description, headline and body of the article, among other places. But don’t overdo it to the point where the copy becomes more focused on search rankings and less focused on a natural reading style.
Test the ad copy. Always start with at least two ads for the phrase and look at the resulting click-through rates one to two weeks after the launch of the campaign.
Pause or delete the poor performer and create a new one. This is called A/B testing and can have a major impact on conversion over time. Eventually, the account ends up with many ads that all have a performance history for comparison and insight.
Remove unproductive keywords. After two or more weeks, look at which keywords appear the fewest times and have the lowest click-through rates. Pause or delete the poor performers and search for new ones with the keyword tool.
Some keywords never get searched enough to justify having them in the account, Even though they are relevant to the search. Keyword clutters ads labor and drags down time management.
Manage the overall campaign. A single AdWords campaign can have multiple ad groups, and a single AdWords account can have multiple campaigns. Paying regular attention to each ad group and campaign will result in higher conversion rates across all of the activity.
Measure the results. Use a spreadsheet to analyze and record each campaign and ad group at least monthly. Weekly is even better for larger budgets with more complex campaigns. Look for weak performers and concentrate efforts there.
A campaign manager will find it helpful to take a step back now and then to look at the account as a whole rather than spending too much time in the details.
AdWords conversion rates vary greatly from one keyword to the other. Some highly targeted and effective keywords can generate double digit click-through rates.
But an account should be able to exceed an average click-through rate of more than 2 percent for all campaigns and ad groups.