January 30, 2015
Please select the multiple-choice answer that best describes your paid search goal:
(A.) I want to increase conversion and/or revenue volume.
(B.) I want to decrease cost-per-conversion and/or increase return on ad spend.
(C.) I want to increase spend.
(D.) I want both A and B.
(E.) None of these goals describe me.
(F.) I am goal-less.
Goals are important. Without goals, there is no way to create a long-term strategy for an account. Now, I do have an important clarification to make: goals and performance are different.
Paid search can be a magical world where ‘miracles’ happen frequently. I categorize a PPC miracle as immediate improvement of all metrics. It happens – I’ve seen it! But the PPC miracle can be rare, flaky and temperamental. We can improve metrics, but it takes time and strategy. It’s best not to bet on a miracle, but rather to align your account with goals that can be achieved in order to improve the business.
I Want To Increase Conversion and/or Revenue Volume
Super realistic! There would be no point to do keyword expansion and campaign builds if you had no interest in growing. The caveat is that you have to be willing to spend more to get there.
Setting a parameter is a good way to make sure that as spend and conversions increase, costs do not get out of control. The parameter is going to sound something like this, “increase conversions as long as cost-per-conversion stays below $25,” or “increase revenue as long as ROAS stays above 200%.” Thresholds are important to for profitability when in growth mode.
I Want To Decrease Cost-Per-Conversion and/or Increase Return On Ad Spend
Efficiency is a great goal and also realistic. Efficiency is achieved by cutting out wasted spend, including bidding aggression, negative keywords, geo-targeting and dayparting. All of these tasks are achieved by putting less money towards the least profitable areas. Decreasing cost-per-conversion is most easily achieved by cutting spend.
Balance is key as you don’t want to cut everything but your most profitable keywords if they only bring in 5% of your monthly conversions. Similar to increasing conversions, a parameter is a nice, complimentary goal. Here are two examples.
- Decrease cost-per-conversion, but we need to have at least 30 leads to keep our sales team busy.
- Increase ROAS, but if revenue drops below $40,000, we’ll lose money based on the amount that we pay our employees.
Don’t know the thresholds for the profitability? It’s going to be worth the time that it takes to learn them. Money is a great motivator and reward of doing a good job!
I Want To Increase Spend
Why? Increasing spend is not a goal. Wanting to grow an account and spend more money? That’s great! But know what you want on the other end of it. Are you looking for more conversion or better brand awareness? Spending more just to spend will never end well – know what you’re trying to achieve from it.
I Want Both A and B
Nope. These goals can work against each other. We don’t live in a perfect world and remember that the PPC miracle is not commonplace.
The simplest way to increase conversions is to spend more money. The simplest way to decrease cost-per-conversion is to cut spend. These two methods contradict each other. We can build out new campaigns to increase conversions and decrease cost-per-conversion in preexisting campaigns, but it does not make sense within the same campaign.
The easiest way to achieve both is to focus on two separate goals. There needs to be a decision made for which to prioritize. For example, the goal for this quarter is grow the account. In the next quarter, it is time to work on efficiency and pulling back.
Some of you might be thinking, “But Kristina, if we drop cost-per-conversion and spend the same amount, won’t conversions increase?” My response would be, “how do you plan to spend the same amount without expanding?”
Campaigns that are ‘Limited by budget’ could be the one exception. Cut wasted spend and allow more of the budget to go to profitable areas of the existing campaign. If the campaign continues to be ‘limited’, there is an opportunity to cut cost-per-conversion, while keeping spend consistent. This strategy could only work if the campaign is sufficiently capped.
None of These Goals Describe Me
Most accounts that I focus on use direct response, but not all of them. If your goal is branding, Rachael just recently wrote a post about how to measure brand awareness. The types of goals that should not drive paid search strategy are decreasing CPCs or focusing solely on ad rank.
I Am Goal-Less
I am just going to come out and say it – this thinking is not good. Even without a concrete number goal, there should be a reason that you are spending money each month on paid search ads. Sarah wrote a great article about how to set PPC Goals. This should be step one in the process of getting your account on track – read Sarah’s post and set a goal.
Realistic goals are a must! They can adapt quarter to quarter, but knowing what’s going to make the biggest impact for the business is where we should start. Unrealistic goals or contradicting goals will muddle the long term strategy and hurt more than help.