Need to Understand Metrics from Search Ads? Read them Backward

Sometimes to make a point, it helps to use examples from other industries. Today, to help explain PPC ads, I’ll borrow an example from a legal description of real property.

Have you ever tried to read a township, range, and section legal description for real property? Or find one on a map? At first glance, these are vexing to say the least. They must have been created for surveyors, or maybe lawyers, but not for layman.

However, there is an insider’s trick to reading one: read it backwards. Here’s an example: The NW 1/4 of the SE 1/4 of Section 5, T3N, R11E. To locate this property on a map, it is far easier to start on the right side, at the range, and then work backward to the left, through the township, section and so on, until you arrive at the parcel you are seeking.

Start with the end result from online ads

We can use a similar approach to understand search engine advertising. Most advertisers notice or ask about the user-facing elements from PPC, such as keywords or ads. To understand online advertising faster, and to avoid getting bogged down in details, a business owner should focus first and mostly on the desired outcome.

For most advertisers, the desired outcome from website traffic is either a lead or a purchase. Some sites have business categories that need both. Leads and purchases can come in online or through incoming phone calls. These desired actions from websites are generally known as conversions.

A quick heads up: one assumption I’m making here is that you have conversion tracking correctly set up on your website. If not, make sure you have this done as a first step.  Reliable conversion tracking is key to the whole process.

At this point, we’ll outline purchases and leads, and use bullet points for easier reading.

Online purchases, reservations, etc (a.k.a. ecommerce)

  • Ecommerce is the purest form of online advertising. PPC ads are ideally suited for it.
  • With the right kind of shopping cart and PPC + analytics settings, we can automatically compare the dollar value of the online sale to the dollar cost of ad spend. This calculates your return on ad spend.
  • If you need to understand the process in more detail, you can work right to left – from online purchase back through the campaign, ad group, ad and keyword that generated the purchase.
  • It’s straightforward to measure initial return on ad spend. It takes more input to project the average lifetime value of customers that are acquired. But it’s important action to take.

Online leads: contact forms or incoming calls

  • Leads can be online forms, email opt-ins or other click-based actions
  • Leads can also take the form of incoming phone calls.
  • Tracking phone numbers are an easy way to segment calls and count incoming calls from various sources of traffic to your website.
  • If you measure incoming calls, insist on having the duplicate calls removed and filter out calls that are too short to be useful.
  • If appropriate for your business, have calls recorded so you can get a better understanding of what potential customers are asking for and how your company representatives handled the opportunity.

Article 1 in a series of 3

This is part 1 of a 3 part blog series on conversions. The next two will dive into other topics related to creating and counting leads and purchases from websites. If you have a recent experience with this topic, please share it with us.