Recently a local business owner reached out to me because he was stressed over the performance of his AdWords account. His clickthrough rate (CTR) had dropped by about 15%, yet he was getting a lot more clicks and impressions.
He wasn’t sure if that was good or bad so he asked me what the most important metric in PPC is.
The answer to that partly depends on your goals. But in his case (and many cases) where the ultimate goal is sales, then my vote for the most important metric is Profit. (Or, on a more granular level, profit per impression.)
If you know that each impression you get in your campaign generates $0.05, $0.50 or $5.00, AdWords becomes your personal ATM machine. When you’re in a situation like this, you’re going to try to find as many targeted impressions as possible!
If you’re selling something directly online, it’s easy to calculate the sales your AdWords campaign generates because AdWords can do most of the calculations for you.
But it’s a bit more challenging for a local business because a lot of transactions happen offline. But with conversion tracking and a spreadsheet (or at least the back of an envelope!) you should be able to get a pretty good idea of how profitable your campaigns are.
To do this you’ll definitely want to track whatever on-site conversions you can like a contact form completion, request a quote form completion, or newsletter sign up, etc. And, offline, you’ll have to do some calculations about how many of these ultimately result in business.
But you’ll also want to set up call tracking. There’s some basic call tracking available within AdWords, but using a 3rd party service will give you much more valuable information. These services will generate unique phone numbers on your site based on the source of the traffic (AdWords, SEO, social media). The most comprehensive systems will even let you track things down to where you know which keywords are driving the most calls.
And these systems are probably not as expensive as you think. For example, call tracking company Century Interactive offers a pretty robust service for just $25 per month + $0.08 per minute for phone calls.
Once you have the data from call tracking and on-site conversions, you should be able to merge that with your AdWords data to get an idea of what your profit and profit per impression is.
For an offline business, you probably not be able to track these things down to the penny. But the closer you get to that number, the better you’ll be able to optimize your AdWords campaign and squeeze the most profit out of it.
Without conversion data you’re left to optimize based off of metrics like clicks and clickthrough rate. And while those are important, you can’t deposit them in your bank account.