Is your Google Ads Conversion Rate, or the lack thereof keeping you awake at night? Well, you’re not alone. ‘Conversion Rate’ is one of the best ways to understand the performance of your ad campaign.
The ‘Conversion Rate’ of your ad campaign defines how effective your marketing strategy is. Having a high ‘conversion rate’ means your marketing is good and you’re likely to see ROI on your ad-dollars
Google Ads can potentially be an expensive investment if not handled right. You might be gifted at providing smart copy, and yet that will not guarantee you sales. There are several different aspects to Google Ads that are worth understanding. A lot of these aspects can impact the conversion rate for your Ad campaign, thereby impacting the performance of your campaign.
This article is intended to be a detailed guide on understanding the mechanics of Google Ads, how to increase your Google Ads Conversion Rate, and to help you avoid mistakes that others have made. The goal: boost your sales numbers.
Let us start with the absolute basics of conversion in Google Ads.
Any ad campaign would need some sort of metric to measure its success and effectiveness. Enter ‘The Four Horsemen’ of Ad campaigns -
Cost Per Click (CPC) means the maximum amount you would pay for each click on your ads.
Cost Per Acquisition is also known as Cost-Per-Action in marketing circles. It’s the average amount to be charged per conversion from your ad. To calculate the average CPA, divide the total conversions cost by the total number of conversions.
This ratio shows how often potential customers who see your ad end up clicking it. This is the Click-Through Rate (CTR), and it can be used to determine how well your keywords and ads are performing.
And now, over to the big question.
Conversion Rate is “the average number of conversions per ad interaction, shown as a percentage.”
In simple terminology, your conversion rate is the total percentage of visitors on your website that end up engaging with the site in a way that you want them to engage, or in other words, “convert.”
A “conversion” could mean a variety of things. Listed below are a few common forms of conversions :
Like the ones listed, there are several other conversion actions with which users can engage on a website, but this should provide you with a general sense of what a “conversion” is. A conversion is a measurable action that progresses a potential customer towards systematically becoming a paying customer.
Read more: Social Media Cheat Sheet for Realtors
To calculate the conversion rate, divide the number of conversions by the number of total ad interactions that can be tracked to a conversion in the same period. The conversion rate formula is below :
Conversion rate = (conversions / total visitors) * 100%
As an example, if you have 75 conversions from 1,000 interactions, your conversion rate would be 7.5%, since (75 ÷ 1,000) x 100 = 7.5. Can it be that simple? Yes, it can! It is made even simpler because most online advertising tools show you the conversion rate on their interface.
Conversion Tracking enables the user to analyze a customer’s interaction with regards to your ads - in cases like if they purchased one or more of your products, subscribed to your mailing-list, contacted your business via email or phone, initiated an app download, etc.
When a prospect has made an action that you determine as valuable, these customer actions known as “conversions” are evaluated using conversion tracking.
Read more: Google benchmark
We begin conversion tracking by creating a conversion action. You can do this in the Google Ads account section. It is a specific customer activity that needs to be defined as valuable to your business. Conversion tracking can be used to track various kinds of actions :
Depending on the type of each conversion source, the conversion tracking process can work a little differently. For every kind of origin, it tends to fall into one of the following categories:
Once conversion tracking has been set up, the data on conversions is visible for your campaigns, ad groups, ads, and keywords. Analyzing this data will help you understand if and how your advertising is helping you achieve vital goals for your business.
Google follows strict security standards and protocols. Google Ads only collects data on pages where the associated tags have been applied.
It is of vital importance that you are providing customers with clear and comprehensive information about the data being collected by you, on your websites, and getting consent from the customer for that collection, wherever legally required.
What is the most obvious way to measure the performance of your campaigns? The answer: By using one’s historical data to measure success of campaigns. The inherent issue here is that it is only your data, which can only give you a handful of actionable insights.
Now, this does not mean that the data loses value, no. This data will showcase your monthly progress, but it is being compared only with your own past performance.
We need to see how this data holds up against industry averages. And this information helps to measure sucessful promotional campaigns in your ads.
Achieving a high conversion rate and low costs per conversion has to be a top priority for you to see substantial returns on your advertising spend. Otherwise, you will merely be paving the way for your competition.
We further need to define what high conversion rate and low costs per conversion look like. Understanding how conversion rate optimization changes depend on the industry. The goal is to give you the essential conversion rate benchmarks necessary to kickstart your conversion rate optimization (CRO) efforts effectively.
Not too long ago, Worldstream analyzed their client accounts to find answers on conversion rates across varying industries.
They ran analytics across 20 different industries, including the following:
So what do we understand from the average conversion rate for search and display?
Advertisers on Google Ads (on average) show a conversion rate of 3.17% on the search network and 0.46% on the display network. You will notice a substantial climb in these figures over the past couple of years, which would encourage advertisers and agencies all the same.
It will be tough to determine how well you’re doing relative to the competition, without benchmark figures. Assume that you have had a CVR of 0.5% and managed to push that figure up to 2%. When compared to your historical data, it looks beautiful. However, when you learn that the Google Ads industry benchmarks for the search network are 3.17%, you’ll realize that you’re not doing so well after all.
Your campaign should meet the averages, and that involves a lot of work. The idea is to view the industry average as a marker, to achieve those figures and do what needs to be done to push beyond.
As for the display network, the highest industry, according to the industry averages in terms of display, is the dating and personal Industry, converting at an average of 3.34%. This industry has ranked higher than finance, as well as insurance.
The five best-performing conversions for display:
And who do you think is at the bottom of the pile for display?
It’s not something one would expect - home goods. The CVR here is a staggeringly low 0.43%.
The top-performing industry for search CVR is dating and personalities. It’s CVR of 9.64% CVR is a substantial 2.66% higher than the legal category..
The five best performing conversions for search:
Knowing about these benchmarks is vital for your business because you need to know where we stand against your competitors and it helps you estimate your costs and ROI.
Without knowing how to analyze the conversion rate data, having the data itself will be of little help. Knowing what to watch out for within this data is what will help you bump up your conversion rate.
Conversion Rate Optimization, or CRO, is the process of optimizing the landing page of your website to give you added conversions from your website traffic. Where CRO comes handy is in getting the most out of your current website traffic. As an example, improving your conversion rate from 1% to 2% will double your conversions, all the while maintaining your website’s current traffic.
There are two types of optimizations we need to understand :
This form of optimization is essentially shaping your ad to have a lasting impact on your prospects before they click on it.
This form of optimization is essentially shaping your ad to have a lasting impact on your prospect after having clicked on your advertisement. Post-click optimization deserves your attention.
Multiple factors determine the conversion rate and understanding how these factors affect and react to your campaign results in an increase or decrease in your conversion rate for the campaign.
Pay close attention to your campaign’s performance against Google Ads industry benchmarks, understand how pre-click and post-click optimizations work, explore the importance of keyword intent, ad groups, and the use of conversion tracking. With all these approaches combined,, you are on the best way to significantly improve the conversion rate of your campaign.
AdNabu helps improve sales in Google Ads for eCommerce companies.