Clicks and Conversions: Measuring Success in Search Marketing

By: jerry | 08/14/2012

Metrics and return on investment are two of the most common topics of conversation in marketing these days, particularly when discussing online marketing. Because every click can be tracked, we are led to believe that we can analyze and optimize our campaigns into the perfect marketing engine. But like most perpetual motion machines, the reality is much murkier.

Setting aside the larger issue of conversions versus impressions and the balance between awareness and sales, there remains the thorny question of what exactly should you measure in your quest for ROI nirvana. At first glance it appears that there is a simple answer — conversions — after all, a conversion is the ultimate goal. Tracking conversions is an important part of the equation (and often a difficult one, particularly with B2B and offline purchase scenarios where the real conversion doesn’t happen online). There are other metrics, however, with which we should be concerned, particularly click-through rates (CTR).

Perhaps you’re asking yourself, why bother tracking the click-through rate of my ads when the conversion is where I make money? After all, it doesn’t matter how many people see my ad or even click on it if they don’t buy my product (or download my white paper). Seems like a reasonable question until you realize that there are many levers to adjust when creating and optimizing an online marketing campaign.

Ideally, a search engine marketing (SEM) campaign will be equally concerned with click-through rate (CTR) and conversion. Obviously, conversion is the metric we all care about the most, but click-through rate plays a key role in the process. In fact, in a well-crafted campaign, there needs to be a balance between the emphasis on CTR and conversion. At the simplest level, the more click-through’s, the more opportunities for conversion. The reality is a bit more complicated than that.

Each conversion begins with a click-through which is dependent on the effectiveness of the ad copy as well as the Quality Score (QS) of the ad (which is determined by Google). The quality score impacts how prominently the ad is placed as well as the cost of the click. One of the key metrics that Google uses for determining the quality score is the click through rate. Therefore a higher CTR directly impacts how much you pay-per-click as well as how prominently the ad is placed. Both of these impact the overall ROI of each conversion, and — since click throughs are the raw material of conversions — it directly impacts the number of opportunities for conversion you have.

Conversions themselves are most impacted by the landing page. The more generic the page the less likely the click-through will result in a conversion. The more you can optimize the landing page for conversion, including reducing the number of distractions (outbound links that are not part of the conversion process) and increasing the relevance of the content to the ad itself, the higher your conversion to click through ratio.

It is certainly possible to choose keywords and ad copy that are optimized for conversion, in other words, higher in specificity which helps drive more qualified leads. Too much emphasis on this approach, however, will negatively impact your quality score and will hurt the overall performance of the campaign.

When we first begin a search marketing campaign for a new client we typically optimize for click through, particularly when it is a new account, because we need to establish authority with Google (in other words, improve the overall quality score so our cost per click and placement are solid). At the beginning of a new campaign, we also work with our clients to define conversion goals and to begin creating and refining optimized landing pages. This process can be challenging as we work to find measurable online conversion points and to connect with offline conversions by integrating with customer relationship management tools. Until conversion goals can be fully defined and accurately measured, it is not possible to get an accurate ROI for the campaign.

That does not mean that you should wait to begin your search marketing campaign until all of the pieces are in place. Measure what you can and improve the process as you go. As you gain more clarity around your conversion goals and have more control over the entire process you can begin to bring more focus to measuring conversion. However, don’t lose sight of the click-through rate as it is an equally important metric for the overall process.

If you are still interested in the details of balancing click-through rates with conversions, the following links from Search Engine Land, one of the leading sources of up-to-date information on search engine marketing, will be helpful in explaining the link between CTR and conversion.

http://searchengineland.com/conversion-rate-optimization-in-paid-search-why-click-through-rate-matters-118991

http://searchengineland.com/how-important-is-click-through-rate-in-googles-quality-score-formula-27296

http://searchengineland.com/the-conversion-chain-in-paid-search-beyond-traditional-key-performance-indicators-112651

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