Why Manual Bidding Will Slowly Ride Into The Sunset
With the recent changes in AdWords, it may be time to let manual bidding go and embrace automated bidding.
In early 2012, we here at White Shark Media were at a cross roads. We had acknowledged the need for call tracking for quite some time, but the interest to sign up with our call tracking partner wasn’t as high as we wanted it to be.
We wanted 90% of all local-based Clients to sign up for dynamic call tracking, which would allow us to optimize AdWords a lot more efficiently.
Our current Clients could see the value in our idea, and they almost unanimously told our Account Executives that it was a great thing to do. However, they just didn’t want to pay for it immediately after having signed up for a full AdWords management plan.
We therefore decided to include call tracking, at our expense, in all our AdWords management plans and boy did we see a change. In this post, I’ll review some of the thoughts that went through our minds when we chose to include call tracking.
Optimizing for CTR vs. Conversions
A good best practice if you don’t have conversion or call tracking, is to rely on your keywords’ CTR and ads to determine success.
Even though it’s a widely recognized practice, it’s flawed in many ways. By solely relying on CTR, you can write ads that are speaking to the majority of searchers.
But by speaking to the majority, you’re most likely not influencing anyone enough to make them convert on your website. I’ve personally seen hundreds of AdWords ads where the ad with the highest clickthrough rate didn’t actually result in the highest conversion rate.
It’s usually the other way around.
Optimizing Only for CTR is a Great Way to Pay Google More
Even though CTR is a hugely important factor and should always be taken into account when optimizing, you should never focus solely on CTR. By focusing solely on CTR, you’re actually only unnecessarily paying Google more money.
The higher the CTR, the more clicks you get, and the more you pay Google. So does this mean that you shouldn’t optimize for CTR if you don’t have conversion data?
No, not by a long shot. It’s always better to have something to optimize towards and if you truly don’t have any way of installing tracking (most people do however), then optimizing for CTR can be the lesser of two evils. Optimizing for CTR is better than not having anything to optimize at all.
Missed Opportunities – Customers with Immediate Needs aren’t Tracked
Another scenario is when you have a prominent contact form on your website that you’re tracking. Novice advertisers might think that this is enough to give you an estimate for what keywords are bringing in conversions.
But the reality is that the visitors that choose to use a contact form are very different from the ones choosing to pick up the phone and calling you.
The visitors that are visiting your site with an immediate need, will definitely call you to get their problem sorted right away. Especially for plumbers or roofer calls; this can be their main source of leads.
This can also reflect within your AdWords campaign if you’re solely tracking contact form submissions. All keywords and ads focused on emergency services (for instance, emergency plumbing repair) might see a very low contact form conversion rate. By implementing call tracking, you will be able to track these conversions too and thereby broaden the scope of your otherwise successful AdWords campaign.
Internet Savvy vs. the Average Joe
While more Internet savvy visitors will not shy away from using a contact form, less Internet savvy visitors will most likely pick up the phone and call you instead.
Within your particular industry, the majority of your customers may not be Internet savvy. By optimizing your AdWords campaign based on the number of conversions generated via a contact form, you risk ignoring the majority of your potential customers.
One-to-One vs. Dynamic Call Tracking
When choosing call tracking solutions, I normally recommend either of the following two levels of service:
1) One-to-One Call Tracking
2) Dynamic Call Tracking
One-to-One Call Tracking
One-to-One call tracking means that you’re tracking one source per phone number. If you’re using one-to-one call tracking for your AdWords campaign, then you would only observe how many calls your entire AdWords campaign generates.
It’s not possible to see conversion data for individual campaigns, ad groups or keywords, which is essential for optimizing AdWords campaigns successfully.
If you’re unsure about how many calls your campaign is generating, then you can start out with only one-to-one call tracking. This will give you an estimate of how many calls the campaign is generating.
If at any point, you start registering decent call volume (50 calls a month, for example), then I’d recommend you switch to dynamic call tracking.
Dynamic Call Tracking
This is where the magic happens. You can now see conversion data for each keyword and ad. This will enable you to find the keyword and ad combination that will generate the largest amount of revenue for you.
For advertisers who are serious about their online marketing endeavors, rest assured I stand behind dynamic call tracking 100%.
Dynamic Call Tracking Pays for Itself
Even though dynamic call tracking can be quite expensive, I haven’t seen an instance where it didn’t pay off directly in the subsequent AdWords optimization stage.
By knowing exactly what keywords and ads are generating a higher conversion rate, you can then focus on these elements, which will then let your campaign reach higher levels of profit.
Dynamic call tracking is essential when it comes to proper bid management of AdWords campaigns.
Calculate the Estimated Value of a Conversion – and Bid Accordingly
One of the hardest things to carry out in an AdWords account is bid management without a clear cost-per-conversion goal.
By having access to dynamic call tracking data, you can set an estimated value-per-call/conversion and ensure that every one of your keywords are at a profitable level.
You can calculate your estimated value-per-call by finding out roughly how many calls turn into paying customers.
When you know this percentage, you can then calculate your average first time sale (some also calculate the 2nd and 3rd sale). By identifying these two numbers, you can measure your estimated value-per-call.
100 Calls * 25% (Average Closing Sale: $100) = $2,500 in Revenue
You can read more about how to perform bid management in AdWords based on conversion data in my article on SEODesk.org
We Couldn’t be Without It
By implementing call tracking in our AdWords management plans, we became more successful in our firm’s overall mission and our Account Executives had fewer frustrations in their day-to-day jobs.
Our Account Executives now have access to as much data as possible and can talk directly with their Clients about the results without any need to guess or estimate. It’s all in the reports and it has really helped us lower our churn-rate for local businesses.
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