One of the frequent responses we hear as to why companies are reluctant to try Google AdWords is that they don’t believe it will work for them and they are unsure as to how to measure its effectiveness.
However, Google AdWords does provide a number of ways that you can measure the return on your Google AdWords investment through “Conversion Tracking”.
Every company when it starts a Google AdWords campaign should have both an objective of what it is trying to achieve and secondly a way of measuring the impact.
Google AdWords can provide a piece of code which can be added to the company website so that you can measure how Google AdWords visitors interact with your website. This piece of code enables tracking of a specific actions on the website.
- A wedding venue may want to track the number of times a form is completed and sent requesting a visit to the venue.
- An online shop may want to record the number of transactions that are completed.
- A home service company may want to identify how many visitors have booked their service online.
- A travel company may record how many brochures have been downloaded.
- A sports centre may want to recognize how many free pass voucher forms for a sports activity have been completed.
Wherever there is an interaction with the website then it can be measured and attributed to where the visitor came from – whether Google AdWords, Google organic, referral, social media, etc.
The value of these “conversions” is sometimes easy to recognize where it is recording an online transaction, but less easy when its an activity where there is no immediate value that can be assigned.
However, an approximate value can be worked out based on the company’s conversion rate and the average value of a client.
In example 1 above, if the cost of each wedding venue visitor who has booked, having originally comes through Google AdWords, costs the company £40 in advertising costs and 1 in every 5 visitors to the wedding venue ends up booking the venue then the cost to acquire each customer would be £200 (£5 x £40).
However, if an average venue booking is £3,000 than it represents a return on the marketing cost of 15 times (before other associated costs of providing the service). This cost and return can then be compared with other marketing methods used to generate bookings to see which is the most cost-effective.
As a result a Cost of Client Acquisition can be measured on an ongoing basis, to not only measure the most effective form of marketing, but also the ROI (return on investment).