The ultimate aim of PPC advertising campaigns is to get business to your website and increase your sales. You want to drive traffic, build your customer base, and sustain your profitability. While we all understand this goal, a common stumbling block is realizing how to measure this and what benchmarks to consider to see if your PPC ads are worthwhile.
This is where conversion rates are king. A conversion rate is the percentage of customers who perform a specific action after clicking on one of your ads. This is a step forward compare to impressions because we are looking at positive actions – not just clicks.
An example of a conversion could be a sale, filling out a contact form, signing up for a newsletter, or requesting a product brochure for example. In this article, I explain how to measure conversion, and what you can do to improve your rates.
How to Measure Conversion Rates
Formula = (Total Conversions / Number of Interactions) x 100
First, you must understand how to measure your PPC conversion rates and the above formula is the starting point.
Total conversions are the positive actions customers took after viewing your ad. Remember that these should be pre-defined and you may have multiple conversions such as product purchases and information requests. It is preferable to calculate separate conversion rates for each of your conversions, but also have an overall rate that encapsulates everything.
The number of interactions relates to how many times people clicked on your ad. Let’s look at an example.
In the last week, you had 234 interactions, and from these, there were 19 conversions. The formula would be as follows:
(19 / 234) x 100 = 8.11%
What is Considered a Solid Conversion Rate?
Knowing PPC conversion rates is fantastic but you also need some type of benchmark to compare this against. A Google Ads Company can provide statistical data to compare to, but as a whole, Google PPC ads have an average conversion rate of 3.75%.
Furthermore, the average conversion rate for PPC ads in general (across multiple platforms) is 2.35%. This allows you to set your expectations accordingly and not have unrealistic goals.
PPC conversion rates by industry can vary and some like catering & restaurants and media & entertainment do have higher averages. I advise spending time researching industry averages so you know what to aim for.
How to Improve Your Conversion Rates?
You now have an understanding of conversion rate calculations and expectations, but what can you do to improve your conversions? There is no definitive answer and each business is different, but there are some core methods you can do which we discuss below.
Make sure your landing pages are optimized
Landing pages are where your customer is directed after they click on your ad. These pages must be optimized, user-friendly, and fully functional. The simplest thing is to make sure everything works including navigation and links.
You also want to refine the SEO including keyword usage and page loading speeds. Essentially, your landing pages need to be perfect, and they need to be engaging to the customer to prompt that positive conversion.
Refine your Ad copy
Low conversion rates may simply be a case of poor ad copy too. This could be uninteresting text, poor-quality images, or bad keyword usage, for example.
Refining your ad copy will be a continual process and Google Ads has many tools that allow you to easily use multiple texts and heading variations for the same ad to see which ones yield the best results. Testing is an important factor and you can’t expect to stick with one ad and it to provide fantastic conversions immediately.
Improve your Google Ad Quality Score
Google measures its PPC ads using the Google Ad Quality Score and this is an important metric for various reasons. Firstly, a higher quality score will result in a reduced CPC (cost per click) which ultimately means your ads are more cost-effective.
A higher quality score should also theoretically mean more conversions simply because your ads are better quality. They are more relevant to your target customer, the landing pages give a great customer experience, and the keywords are gaining the right traction.
Refine your keyword usage and match types
You may have a low conversion rate because you are using the wrong keywords which is resulting in your ads being displayed to people who are never likely to make a purchase or do something positive on your website.
Keywords can be continually refined and you can easily use different keywords in your ad copy to see which ones yield the best results. Also, consider nuances like the keyword match type which helps filter the people who will find your ads.
Utilize negative keywords
Negative keywords are words and phrases that you DON’T want your ads to appear for. Not adding negative keywords can impact your conversions as it could mean your ads are displaying for the wrong audience.
For example, perhaps you have a luxury furniture store aimed at people with more disposable income. If your ads are appearing for people searching for cheap furniture, the conversions will be lower. In an instance like this, you could add cheap and similar words as negative keywords to stop your ads from appearing for those searches.
Set Your Expectations and Aim for Continual Improvement
It’s important to clearly define your conversions beforehand and set out goals for what you want to achieve from your PPC campaigns. This will make it much easier to measure the conversions and see the success of your ads in relation to your business goals.
The aim is to then strive for continual improvement and use the conversion rate as a benchmark figure that you want to increase. This is done by improving your ad copy, revising keyword usage, utilizing negative keywords, and improving landing pages for example.