Marketing 101: Why Conversion is Key to Your Success

Your conversion rate is hands-down the most important metric in digital marketing.

 

Everything you do in online marketing is designed to convert visitors to your website into paying customers for your business.  And conversion rates don't just include sales -- people who make appointments, fill out contact forms, call you, and request free quotes also count as conversions. A conversion can be any desired action that brings your business closer to making a sale.

 

It's easy to get overwhelmed by metrics when getting started in digital marketing. You must watch click-through rates (CTRs) and cost-per-click (CPC) while always considering your return on investment (ROI). But the whole point of digital marketing is to maximize conversions for the cheapest-possible price.

 

In this article, we'll help you understand why conversions are crucial to your success.

 

 

Why Conversions Matter

Increasing the conversion rates of your online marketing campaigns is usually the cheapest way to boost your profits.

 

Think of it this way -- would you rather get more customers from Google AdWords by doubling your ad budget or by optimizing your advertising approach? Optimizing for a higher conversion rate means more bang for the buck. That's a big reason why conversion rates are so important.

 

That's not all - here are three other reasons why conversion rates matter:

#1: Conversion rates can predict success or failure.

Want to know whether your business is on the right track? Conversion rates give a pretty honest assessment, especially once you've optimized your campaigns.

 

With help from analytics reports, you can see which parts of your business get the strongest conversions, and you can predict which audiences are likely to become your best customers. Likewise, weaker conversion rates indicate where your business strategy needs work.

#2: Better conversion rates can save you money.

Campaigns with better conversion rates are generally more efficient than campaigns with weaker conversion rates. A higher conversion rate lets you cover more ground without increasing your ad budget, or you can reduce your ad budget and have cash leftover for testing new marketing tactics.

#3: Focusing on conversion rates will improve your website.

Creating an air-tight sales funnel is the key to boosting conversion rates. Your campaigns, your website and your sales processes need to be as in-sync as possible. As you learn which factors are most important for driving conversions on your website, you'll eventually discover how to make your site more valuable for visitors and customers -- and the benefits of this extend far beyond short-term profits.

How to Boost Conversion Rates

Now that we've reviewed the importance of conversions, the next step is taking action to boost your rates. Here are six easy tips to take your conversion rates to new heights.

 

#1: Sharpen your ads. The first step toward increasing conversions is nailing your ad copy to stand out from the competition.

 

#2: Optimize your landing pages. Deliver on promises made in your ad copy, and use concise, catchy headlines that immediately engage visitors.

 

#3: Test new ad funnels. Create new ads and variations of your landing pages. See how conversion rates change with different advertising approaches.

 

#4: Pare down your audience. Sometimes casting a wider net is better, but tightening your focus to specific consumer groups is an easy way to boost conversion rates.

 

#5: Use FOMO to your advantage. That's the fear of missing out. If you're advertising a sale, say in your ads or on your landing pages that time is running out -- and you can even use countdown clocks for added urgency.

 

#6: Grow your social media. Urge visitors to follow you on Facebook, Twitter and other accounts. Install social media login buttons on your website if it requires a member sign-in; people are much more likely to register using social logins. And if you have a strong social following, display the number of followers or shares on your pages for increased social proof.

 

Conversion Rates Aren't Always Reliable

Conversion rates may be the most universally important metrics in digital marketing. However, any data viewed out of context can be incredibly deceiving. Never be blinded by a high or low conversion rate without carefully evaluating all the data at your disposal.

 

Here are a few ways in which conversion rates can be deceiving:

#1: Higher conversion rates may hide poor performance.

Strong conversion rates are generally positive -- that's what you want. However, you might have a high conversion rate paired with a low sales volume. Or, despite your favorable conversion rate, perhaps high advertising costs are wiping out your ROI. Never assume your campaigns are profitable based on conversion rates alone.

#2: Some of your visitors aren't there to buy.

If you focus too much on conversion rates, you may overlook the multitude of other reasons why people visit your website. Some people may be researching products, and perhaps they'll eventually return to become paying customers. Some may already be customers and they're seeking support or checking on their orders. Do you maintain a blog? You may be building an audience. Don't become so fixated on conversion rates that you forget all the other ways your website is valuable.

#3: Conversion rates can fluctuate with different audiences.

Is your online marketing causing a large influx of new visits? If so, your conversion rates may seem unusually low. That's because new visitors are less likely to buy goods and services than established customers. Also, visitors from different traffic sources tend to convert at different rates. Using Google Analytics reports can help you determine your true conversion rates among different types of visitors.

Conclusion

Conversion rates are immensely important when optimizing your campaigns. Not only do they indicate whether your marketing is profitable, but they also reveal how visitors engage with your website. Conversions aren't all that matter -- you still need to watch your click-through rates, overall spend and numerous other metrics -- but driving conversion rates is generally the key for successful campaigns.

 

 

3 Ways to Measure More Conversions Using Estimated Total Conversions

In October, Google announced Estimated Total Conversions as a first step to providing you with a more holistic view of the conversions driven by AdWords. It is available to all advertisers who use AdWords conversion tracking. Estimated Total Conversions includes conversions you see today, such as online sales, as well as new conversion types like cross-device conversions and calls.

These insights are particularly important to understand because consumers are now constantly connected, using multiple devices throughout the day. In the next few weeks, this will be even more pronounced as people shop for holiday gifts. A recent holiday study shows that 84% of consumers who are likely to use a mobile or tablet device while shopping this holiday season, will start shopping on one device and finish on another.

Google making it easier for advertisers to understand these consumer behaviors with new insights that are part of Estimated Total Conversions, a new column in AdWords.

Estimated Total Conversions includes cross-device conversions, which are also shown in a separate column to highlight their importance.

3 ways to use Estimated Total Conversions to improve business results

1. Take another look at your desktop/tablet bid. Once you see more conversions that can be attributed to AdWords, your total ROI from AdWords will change. Re-calculate your desktop/tablet cost-per-acquisition (CPA) based on these cross-device conversions. If your CPA has improved using this measure, you might want to look for opportunities where you may be able to increase position and volume by increasing your bids.

2. Capture the full value of mobile.  Many experienced search marketers are already using this data to make business decisions, by starting a test on campaigns that previously did not show on mobile.  Within a few weeks of showing ads on mobile devices, these advertisers started to see conversions they could not before -- those that started on a mobile phone and ended on another device. These insights led to important business decisions like adjusting mobile bids or shifting budget to reflect the new ROI of their keywords.

Amber Yeray, Digital Marketing Manager at EXPRESS, a national fashion retailer, has been working with her agency partner, RKG, to understand the new insights offered by Estimated Total Conversions.

“Cross-device conversions have shown that total estimated conversions are up 7%, with a 17% lift from mobile-initiated conversions. EXPRESS and search marketing agency partner, RKG, are now able to increase mobile bids for areas of the account that show the most impact from mobile -- driving more volume while remaining efficient.”

3. Spend only the most profitable dollar. The total value of your AdWords investment might change once you’re able to see more conversions. Whether it’s AdWords, other digital channels or offline media, think about investing your dollar into the most profitable channel possible.

Estimated Total Conversions provides new insights that may help you optimize bids and budgets to improve performance. Amit Shah, Vice President of Online, Mobile & Social at 1-800-Flowers, used the new insights that he gained to make more informed budget allocation decisions.

“After measuring cross-device conversions that began on a mobile device, we saw a 4% increase in total conversions measured in AdWords. With the full view offered by Estimated Total Conversions, we can correctly understand attribution across channels and make better decisions on achieving marginal spend optimization.”

These are just a few of the tips that we will continue to share as we hear feedback from you

New AdWords Estimated Cross-Device Conversions

A couple of months after the paid search world had to transition to AdWords Enhanced Campaigns in the name of simplified and more relevant cross-device ad management, we are finally getting some initial food for thought with regard to cross-device performance. I was calling it the “next frontier for online marketers” in a previous post, and we are now officially getting there!

A New “Estimated Total Conversion” Column Is Rolling Out

In AdWords, a new column called “Est. total conv.” was made available for some beta accounts recently. However, this column doesn’t seem to be available at the keyword level yet — only at the campaign and ad group levels.

The official field description is as follows: “This is our best estimate of the total number of conversions that AdWords drives for your business. What it means: Est. total conv. = Conv. column + Est. cross-device conv. column”

The description doesn’t say whether the “Conv. Column” field is referring to “Conv. (1-per-click)” or “Conv. (many-per-click).” However, I’d tend to think Google is using the “Conv. (many-per-click)” column for reference.

Also, Google plans to factor in other conversion types like phone calls and in-store visits in the future — not right now, though.

Leveraging The New “Estimated Total Conversion” Column

There are lots of different ways to look into this new column — let me just suggest two of them:

1. Since the “Est. cross-device conv.” column is not provided, one can easily calculate it such as Est. cross-device conv. = Est. total conv. – Conv. (many-per-click). This is assuming Google is using the Conv. (many-per-click) column rather than Conv. (1-per-click).
2. Analyzing a new ratio which could be called something like “Cross-device assist %” such as: Cross-device assist % = Est. total conv. / Conv. (many-per-click) – 1. The higher the ratio, the more cross-device conversions occurred as a percentage. A ratio of 0% means there were no additional cross-device conversions, while anything greater than 0% indicates some cross-device assists.

In the below paid search report by ad group and device, those rows with the highest cross-device assist % correspond to assists from mobile devices. That was expected; however, now we have some hard numbers.

Another way to look at it is strictly by device, such as in the below pivot table. I noticed a couple of odd things:

• The numbers in a report differ from the numbers from the AdWords interface by roughly 5-10%.
• The total number of estimated total conversion is lower than the total number of last-click conversions.
• Those additional conversions attributed to mobile devices are somehow subtracted from other devices. As a result, this advertiser’s true mobile CPA is 22% lower than it seems, looking at just the last-click, while the true desktop CPA is 5% higher and the true tablet CPA is 15% higher. You’ll definitely want to take this into consideration when adjusting your desktop/tablet bids, as well as your mobile bid modifiers.

Conclusion

With the new “Estimated total conversion” column, Google is attempting to tackle the increasingly complex issue of cross-device revenue attribution in paid search — and it is definitely a leap forward.
However, in order to make it fully trustworthy and actionable for online marketers, it’d be great to get more transparency from Google regarding the way the numbers are put together (with some kind of confidence interval?), then have the Est. total conv. column available at the keyword level for more granular insights — and ultimately across multiple channels for more sophisticated revenue attribution modeling.

Estimated Total Conversions: New insights for the multi-screen world

People are constantly connected, using multiple devices throughout the day to shop, communicate and stay entertained.  A September 2013 study of multi-device consumers found that over 90% move sequentially between several screens for everyday activities like booking a hotel or shopping for electronics.

As consumers are increasingly on the go and switching between devices, marketers are telling us they want to see a more complete and accurate picture of how their online advertising drives conversions.  Conversions can come in many forms: visits to stores, phone calls, app downloads, website sales or purchases made after consulting various devices.  Getting better insight into these complex purchase paths can help you optimize your online advertising and allocate budget more effectively.

Introducing Estimated Total Conversions

Today, we are introducing Estimated Total Conversions for search ads on Google.com.  This is an exciting first step to give marketers more insight into how AdWords drives conversions for your business by showing you both the conversions you see today, like online sales, as well as an estimate of conversions that take multiple devices to complete.  Over time, we’ll be adding other conversion types like phone calls and store visits as well as conversions from ads on our search and display network.

Estimated Total Conversions will provide you with a holistic view of all of the conversions driven by your Google search advertising that can be used to make important decisions like how much to bid and how to assign budget across your various marketing channels.  For the last few years, many sophisticated advertisers have been using their own analysis to get to these insights.  Today, we are beginning to bring this level of insight and measurement to all advertisers.

Estimated cross-device conversions

Estimated cross-device conversions is the first new conversion type to launch as part of Estimated Total Conversions. Cross-device conversions start as a click on a search ad on Google.com on one device and end as a conversion on another device (or in a different web browser on the same device).

For example, say someone shops for “blue jeans” on her mobile phone while waiting for the morning train.  She clicks on a mobile ad for ABC Blue Jeans.  When she gets to her office, she goes directly to the ABC website to make a purchase.  This is an example of a cross-device conversion.  We calculate cross-device conversions using a sample of data from users who signed into multiple devices. 

Estimated cross-device conversions will begin rolling out globally to all AdWords advertisers starting today and continuing over the next few weeks. To see these new statistics, you’ll need AdWords conversion tracking and a sufficient volume of conversions on which to base a reliable estimate.

In the last few months, we’ve analyzed data across thousands of AdWords advertisers to learn more about cross-device conversion patterns.

When advertisers in the travel industry use AdWords estimated cross-device conversions, they are able to measure 8% more conversions, on average, than they did before.  In addition, they can now measure 33% more conversions that originated on a mobile phone and later converted on different device.  This helps them attribute all those sales -- from customers who searched for flights and hotels on their mobile phones and then made a purchase from another device -- to the right ad.

Similarly, other verticals, like entertainment and retail are also seeing positive results.  Businesses in these industries are now able to measure 12% and 7% more conversions, respectively, than they could before using Estimated Total Conversions.

Sean Singleton, Marketing Manager at American Apparel noted that, "We always knew our online ad investment was influencing conversions across devices, but we didn't know how to begin estimating these numbers. Once we saw that 5.3% more conversions could be attributed to cross-device conversions in AdWords, we knew we could more accurately calculate the value we were receiving from each ad click.  We also learned that mobile ads are driving 16% more conversions than we thought, so we are now investing more into this channel to gain more sales.”

More results from other verticals can be seen below.

Paving the way for marketers to measure the full value of their online advertising

We are committed to helping you gain insight into the new conversion types that are part of a constantly connected, multi-screen world so that you can make the best advertising decisions possible. In addition to cross-device conversions, both phone calls and store visits will be included as part of Estimated Total Conversions in the coming months. These are important conversions to consider — people make more than 40M calls to businesses each month directly from Google ads and are often looking for physical store locations when they search on Google, particularly on the go.

Getting Started with Google AdWords: How to Determine Your Test Budget

If you’re considering launching a Google AdWords campaign, then you may be asking yourself, “How much do I need to invest to test this out?  Is $100 enough or do I need thousands?”
It’s an important question and I hear it all the time from prospective clients. Unfortunately, this question is impossible to answer without further research.  For example, we need to answer the following:

1. Which keywords will you be targeting and how much do they cost per click (CPC)?
2. What is the time frame for your test? Do you need to see results in weeks, months, or a year?
3. What is your sales process and typical sales cycle?  Do customers buy the same day they search or does it take months before a purchase is made?
4. What are your typical sales conversion rates?

Let’s go through an example and at the end you’ll know how to estimate a reasonable budget to test a Google AdWords campaign.

Find Your Target Keyword CPCs

In a Google AdWords search campaign, you pay per click.  That means you only pay Google when a prospect clicks on your ad.  If your ad shows up in Google’s results 1,000 times, but no one clicks on it, then you don’t pay a penny.  That’s why AdWords is sometimes called PPC, or pay per click advertising.
So if we’re estimating our budgets, we obviously need to know how much it’s going to cost when prospects click on our ads. And the exact amount you’ll pay depends on the keyword you’re advertising on.  For example, if you advertise on the keyword, “coffee shop,” then you’ll pay a different amount than if you advertise on “mortgage broker.”  Google estimates you’ll pay $2.90 for “coffee shop” and a whopping $13.76 for “mortgage broker.”
That’s a HUGE difference when we’re estimating budgets.
Now, you may be wondering how the heck do you find all the CPCs for keywords.  It’s actually really easy because Google provides you with the Keyword Planner Tool.  Search for your target keywords and the Keyword Planner tool will give you an estimate for how much each keyword will cost per click.  Note that these are estimates so you may pay more or less.

Testing Time Frame

It’s important to realize that you need to go into an ad campaign with a realistic time frame in mind.  As you’ll see later, the time frame will depend on your budget and it also depends on your industry.  There simply may not be enough search volume for your target keywords to get leads and sales data in 1 month.  For example, “mortgage broker” is searched 9,900 times per month in the US.
If 1% of the searchers click on your ad, then you would get 99 clicks from that particular keyword.  Is it realistic that you would get a sale from only 99 website visitors?  Probably not.  Of course, you’ll be targeting more than one keyword.  The goal here is to make sure there is enough search volume for your target keywords to achieve your goals within your time frame.  Plus, if you have a longer time frame, then you can spread out your monthly budget across multiple months.

Your Sales Cycle

This step is easy.  What is your typical sales cycle?  If it’s over 1 month, then obviously you’ll need to test for multiple months to get decent data from a test campaign.  If your customers buy within 1 day, then you know you’ll get almost instant feedback from the campaign once it starts.

Your Sales Conversion Rates

The final step before we can calculate your budget is to use your sales conversion rates.  In my example above, we estimated that we can drive about 99 prospects to our website from the keyword “mortgage broker.”  There are at least two more conversions that need to take place:

1. Prospect has to call, complete a webform, or visit your office after clicking on the ad
2. You have to close the sale

Let’s say your goal is to get the prospect to complete a webform to schedule an appointment.  A reasonable conversion rate for lead generation like this might be 5%.  So out of the 99 visits, about 5 will schedule an appointment.  I’ll assume 100% will show up for the appointment, which is not realistic, but makes this example easier. :)
Next, is your appointment to client close ratio.  Let’s make the math easy here and say you’re sales conversion rate is 20% (and the sales cycle is only a few days) so you would generate 1 new client.

Estimate Your Test Budget

Alright, now it’s time to put all this information together to estimate your test budget.  We already estimated we can generate 1 new client from 100 clicks on a targeted keyword.  Plus, we know our example keyword costs $13.76 per click, so it’s going to cost about $1,376 to generate one sale.
That means we need at least $1,376 for our initial test to get a sale within about a month, based on the CPC, search volume and sales cycle.  So if you only have $100/month to test, then it’s going to take about a year to test just one keyword.  It’s possible you’ll get a sale more quickly, but it’s also possible it will take longer than estimated to get that first sale.  In this example, I would recommend a budget of at least $2,000 to give this one keyword a fair shot.
As you can see, there are a lot of variables that go into estimating your AdWords test budget.  Play around with the Google Keyword Planner to find your target keywords’ CPCs and search volume.  Then run the numbers based on your sales cycle and conversion rates.

Or, contact me and I’ll do it for you! :)

Google Adds Conversion Estimates To AdWords Bid Simulator

Bid Simulator, the AdWords tool that shows click, impression and cost estimates, now includes conversion predictions
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The Bid Simulator displays estimates for both 1-per-click and many-per-click conversions you might have received with different bids. As with the other estimated data, the conversion estimates are based on clicks from a recent seven day period.



So far, conversion estimates appear to be very limited to high volume keywords. Many accounts may see conversion estimates in the Bid Simulator only for brand keywords. Sparse conversion data clearly makes it hard to make any worthwhile predictions about future performance. Conversion estimates on brand keywords aren’t likely to be useful if the bids are already maxed out (as in the example above).
For those accounts with high converting non-brand keywords, the conversion data could be a helpful signal in determining to whether to test different bids.

Measure & Optimize for Offline Sales with AdWords Conversion Import

Potential buyers have increasingly turned to the web as the first step in their purchase decisions.  So for years, digital marketers in insurance, auto sales, and other high consideration industries have been using AdWords to build awareness and generate leads. These leads have been handed to sales reps, who then help customers complete the purchase process.

In AdWords, you’ve been able to see which keywords lead to higher or lower lead volumes, and to optimize for a cost per lead goal. But there's been no easy way to measure and optimize in AdWords for events that happen beyond the website, like a customer order taken over the phone by your sales team.

New Conversion Import Feature

The new AdWords conversion import feature can help you measure and optimize for the complete end-to-end purchase process. Now you can upload your offline conversion events into AdWords and see how clicks on your ads led to sales made in the offline world such as over the phone or via a sales rep.

Click image to enlarge

And since your offline conversion events will be incorporated into your existing AdWords conversion data, tools such as Search Funnels, Automated rules and Flexible bid strategies can leverage that data.

How you might use the conversion import feature

Let’s see how importing conversions can help a small business measure and optimize for the entire customer journey, from online leads to offline sales.

Isabelle designs, builds and sells high-end custom furniture. She uses AdWords to drive prospective customers to her website, where they can submit their contact information and request a sales call. AdWords Conversion Tracking can measure these raw lead submissions, but since most of them won’t result in a sale, she optimizes her campaigns on raw submitted leads; not actual sales.

Now that she’s able to import her offline conversion data (including sale value), Isabelle can better understand which keywords drive the most profitable sales. With a more accurate ROI picture, Isabelle can better manage her bids and budget.