Is your Google Ads Conversion Rate, or the lack thereof keeping you awake at night? Well, you’re not alone. ‘Conversion Rate’ is one of the best ways to understand the performance of your ad campaign.
The ‘Conversion Rate’ of your ad campaign defines how effective your marketing strategy is. Having a high ‘conversion rate’ means your marketing is good and you’re likely to see ROI on your ad-dollars
Google Ads can potentially be an expensive investment if not handled right. You might be gifted at providing smart copy, and yet that will not guarantee you sales. There are several different aspects to Google Ads that are worth understanding. A lot of these aspects can impact the conversion rate for your Ad campaign, thereby impacting the performance of your campaign.
This article is intended to be a detailed guide on understanding the mechanics of Google Ads, how to increase your Google Ads Conversion Rate, and to help you avoid mistakes that others have made. The goal: boost your sales numbers.
Let us start with the absolute basics of conversion in Google Ads.
How is success measured in Google Ads campaigns?
Any ad campaign would need some sort of metric to measure its success and effectiveness. Enter ‘The Four Horsemen’ of Ad campaigns -
- Cost Per Click (CPC)
- Cost Per Acquisition (CPA)
- Click-Through Rate (CTR)
- Conversion Rate or CVR
Cost Per Click
Cost Per Click (CPC) means the maximum amount you would pay for each click on your ads.
Cost Per Acquisition
Cost Per Acquisition is also known as Cost-Per-Action in marketing circles. It’s the average amount to be charged per conversion from your ad. To calculate the average CPA, divide the total conversions cost by the total number of conversions.
Click-Through Rate (CTR)
This ratio shows how often potential customers who see your ad end up clicking it. This is the Click-Through Rate (CTR), and it can be used to determine how well your keywords and ads are performing.
And now, over to the big question.
What is the Conversion rate in google ads?
Conversion Rate is “the average number of conversions per ad interaction, shown as a percentage.”
In simple terminology, your conversion rate is the total percentage of visitors on your website that end up engaging with the site in a way that you want them to engage, or in other words, “convert.”
A “conversion” could mean a variety of things. Listed below are a few common forms of conversions :
- Making a purchase.
- Submitting a form (contact us form, etc.).
- A direct call to your business.
- Engaging with your online chat.
- Signing up for paid or free subscription such as a newsletter.
- Registration on a website.
- File Downloads (trial software, eBook, mobile application, etc.).
- Using something (new/advanced feature on your software or app, simply using your software/app for a certain amount of time).
- Upgrading their service.
- Any form of engagement with your site (hover time on the website, repeat visits, number of pages visited).
Like the ones listed, there are several other conversion actions with which users can engage on a website, but this should provide you with a general sense of what a “conversion” is. A conversion is a measurable action that progresses a potential customer towards systematically becoming a paying customer.
Calculating Conversion Rate
To calculate the conversion rate, divide the number of conversions by the number of total ad interactions that can be tracked to a conversion in the same period. The conversion rate formula is below :
Conversion rate = (conversions / total visitors) * 100%
As an example, if you have 75 conversions from 1,000 interactions, your conversion rate would be 7.5%, since (75 ÷ 1,000) x 100 = 7.5. Can it be that simple? Yes, it can! It is made even simpler because most online advertising tools show you the conversion rate on their interface.
- If you track more than one conversion action or decide to count each conversion, your conversion rate could be over 100%, as more than one conversion is calculated for each engagement.
- You should utilize conversion tracking in your account to measure the conversion rate and eventually use it to help guide your advertising strategy.
Tracking Conversion Rate in Google Ads
Conversion Tracking enables the user to analyze a customer’s interaction with regards to your ads - in cases like if they purchased one or more of your products, subscribed to your mailing-list, contacted your business via email or phone, initiated an app download, etc.
When a prospect has made an action that you determine as valuable, these customer actions known as “conversions” are evaluated using conversion tracking.
Why Use Conversion Tracking?
- Understand what’s most effective to deliver optimum customer activity in terms of keywords, ads, ad groups, and campaigns.
- Automatically optimize your campaigns by using smart bidding strategies to suit your business goals.
- Provides you the flexibility to understand customer engagement with your ads across various devices. The “All Conversions” reporting column gives insight into cross-device, cross-browser, and other conversion data.
How does conversion tracking work?
We begin conversion tracking by creating a conversion action. You can do this in the Google Ads account section. It is a specific customer activity that needs to be defined as valuable to your business. Conversion tracking can be used to track various kinds of actions :
- Website actions: Purchases, signups, other interactions a customer makes with your website.
- Phone calls: Calls made to your business directed from your ads, calls to a phone number on your site, click on a phone number on your mobile website, all of which would come under “phone call conversion tracking.”
- App installs and in-app actions: App Installs on your Android or iOS device, and purchases or other engagement within those apps, which would come under “offline conversion tracking.”
- Local actions: Actions that are counted whenever a customer interacts with your ad because it is specific to a physical location or store.
Depending on the type of each conversion source, the conversion tracking process can work a little differently. For every kind of origin, it tends to fall into one of the following categories:
- A conversion tracking tag, or code snippet, etc. can be added to your website or mobile app code. Clicking on your ad from Google search or selected Google display network sites, or when viewing the video ad, a temporary cookie is placed on the computer or mobile device of the customer.
- Once visitors complete the action you defined, the system recognizes the cookie (through the code snippet you added), and thus a conversion is recorded.
- Some types of conversion tracking don’t require a tag. For instance, for tracking phone calls from call-only ads or call extensions, you use a Google forwarding number that follows precisely when the call came from your ads.
- It can also be used to track details like call duration, call start and end time, and caller area code, etc. Additionally, in-app purchases and app downloads from Google Play and local actions will automatically be recorded as conversions, without tracking code.
Once conversion tracking has been set up, the data on conversions is visible for your campaigns, ad groups, ads, and keywords. Analyzing this data will help you understand if and how your advertising is helping you achieve vital goals for your business.
Security and privacy with regards to website tracking
Google follows strict security standards and protocols. Google Ads only collects data on pages where the associated tags have been applied.
It is of vital importance that you are providing customers with clear and comprehensive information about the data being collected by you, on your websites, and getting consent from the customer for that collection, wherever legally required.
Conversion rate benchmarks across different industries
What is the most obvious way to measure the performance of your campaigns? The answer: By using one’s historical data to measure success of campaigns. The inherent issue here is that it is only your data, which can only give you a handful of actionable insights.
Now, this does not mean that the data loses value, no. This data will showcase your monthly progress, but it is being compared only with your own past performance.
We need to see how this data holds up against industry averages. And this information is required to see if your ad campaign has been successful.
Achieving a high conversion rate and low costs per conversion has to be a top priority for you to see substantial returns on your advertising spend. Otherwise, you will merely be paving the way for your competition.
We further need to define what high conversion rate and low costs per conversion look like. Understanding how conversion rate optimization changes depend on the industry. The goal is to give you the essential conversion rate benchmarks necessary to kickstart your conversion rate optimization (CRO) efforts effectively.
Not too long ago, Worldstream analyzed their client accounts to find answers on conversion rates across varying industries.
They ran analytics across 20 different industries, including the following:
- Dating and Personal
- Travel & Tourism
- Education & Employment Services
- Consumer Services
- Animal Care
- Real Estate
- Medical & Dental
So what do we understand from the average conversion rate for search and display?
Advertisers on Google Ads (on average) show a conversion rate of 3.17% on the search network and 0.46% on the display network. You will notice a substantial climb in these figures over the past couple of years, which would encourage advertisers and agencies all the same.
Benchmark figures are essential to your business
It will be tough to determine how well you’re doing relative to the competition, without benchmark figures. Assume that you have had a CVR of 0.5% and managed to push that figure up to 2%. When compared to your historical data, it looks beautiful. However, when you learn that the Google Ads industry benchmarks for the search network are 3.17%, you’ll realize that you’re not doing so well after all.
Your campaign should meet the averages, and that involves a lot of work. The idea is to view the industry average as a marker, to achieve those figures and do what needs to be done to push beyond.
As for the display network, the highest industry, according to the industry averages in terms of display, is the dating and personal Industry, converting at an average of 3.34%. This industry has ranked higher than finance, as well as insurance.
The five best-performing conversions for display:
- Dating and Personals: 3.34% CVR
- Legal: 1.84% CVR
- Education & Employment Services: 1.57% CVR
- Finance and Insurance: 1.19% CVR
- Auto: 1.19% CVR
And who do you think is at the bottom of the pile for display?
It’s not something one would expect - home goods. The CVR here is a staggeringly low 0.43%.
The top-performing industry for search CVR is dating and personalities. It’s CVR of 9.64% CVR is a substantial 2.66% higher than the legal category..
The five best performing conversions for search:
- Consumer Services: 6.64% CVR
- Legal: 6.98% CVR
- Employment Services: 5.13% CVR
- Finance and Insurance: 5.10% CVR
- Dating and Personals: 9.64% CVR
Knowing about these benchmarks is vital for your business because you need to know where we stand against your competitors and it helps you estimate your costs and ROI.
How do you increase the conversion rate for your Google Ad campaigns?
Without knowing how to analyze the conversion rate data, having the data itself will be of little help. Knowing what to watch out for within this data is what will help you bump up your conversion rate.
Conversion Rate Optimization, or CRO, is the process of optimizing the landing page of your website to give you added conversions from your website traffic. Where CRO comes handy is in getting the most out of your current website traffic. As an example, improving your conversion rate from 1% to 2% will double your conversions, all the while maintaining your website’s current traffic.
There are two types of optimizations we need to understand :
This form of optimization is essentially shaping your ad to have a lasting impact on your prospects before they click on it.
- Headline: Most headlines fall short of being precise, and more importantly, they don’t persuade the customer. Your headline should convince the customer concisely and straightforwardly, showing them only the benefits of your product.
- Descriptions: Never shy away from attempting different specifications and layouts, observe and analyze what appeals to your prospective customer.
- Tailor your ad extensions for each ad: You’d be surprised how useful optimizing ad extensions are. Using an ad extension that is related to your ad and one that adds value by improving the customer’s journey can improve your conversion rate.
- Negative keywords: You should frequently perform keyword diagnoses to identify negative keywords. These are keywords with bids that are not too high, or that prevent triggering similar ads, thus avoiding unwanted spending.
- Keywords selection: The idea is to keep things simple. Understand that the more keywords you are adding for an ad campaign, the more compounded the probability of getting a high conversion rate. Be very clear, specific, and intentional when selecting keywords.
- Addressing searcher intent properly: Keep in mind that your potential customer base is always on the lookout for products on Google. Understanding and addressing searcher intent will increase your campaigns’ quality score.
- Single keyword ad groups: Different customers may have different agendas when visiting your landing page. The idea is to keep the ad information as audience-specific as possible, thereby catering to different types of audiences. Maintain granular control of your entire ad spend.
- A/B test: The ideal way to run an A/B test is to split your page as two different variants and divert half of your traffic to each variant. That way, you will be able to find out which variation performs best.
This form of optimization is essentially shaping your ad to have a lasting impact on your prospect after having clicked on your advertisement. Post-click optimization deserves your attention.
- Landing page optimization: The landing page is the first page where your traffic is being directed. This page needs to be optimized to sell, especially if you’re paying to get traffic to your website.
- Page loading speed: Increased loading time can significantly affect the Google ranking and conversion rate of your campaign. Use a tool like Google’s Page Speed Insights to help you optimize.
- Mobile responsiveness: We know that most of the conversion happens on the post-click landing page, and mobile responsiveness is essential to post-click conversion.
- Easy to navigate: Providing a smooth navigation experience for the user does yield a positive conversion rate.
- Message to match your landing pages: Message-match optimizes the landing page with keywords to create an experience that the user is expecting. Message matches can potentially increase your conversion rate by 200+%.
- Call-to-action: Wikipedia defines Call To Action as, Call to action (CTA) is a marketing term for any device designed to prompt an immediate response or encourage an immediate sale. A CTA most often refers to the use of words or phrases that can be incorporated into sales scripts, advertising messages or web pages that encourage consumers to take prompt action. Finding the apt call-to-action (CTA) will take some experimenting, and it yields positive results.
- Make use of visuals: Never underestimate the power of visual representation. Experimenting with a new picture or video more often than not increases your conversion rate.
- Make use of live chat: Live chat is engagement on your page by any potential customer; the use of a live chat plug-in like LiveChat or Zendesk will bring up the conversion rate of your ad campaign.
- A/B Test the offer: We have seen that splitting up the traffic to separate dedicated landing pages can be an easy and effective way to go. For this, the use of CRO software is required, and there is both affordable and expensive software available in the market.
Improve your conversion rate instantly with this guide
Multiple factors determine the conversion rate and understanding how these factors affect and react to your campaign results in an increase or decrease in your conversion rate for the campaign.
Pay close attention to your campaign’s performance against Google Ads industry benchmarks, understand how pre-click and post-click optimizations work, explore the importance of keyword intent, ad groups, and the use of conversion tracking. With all these approaches combined,, you are on the best way to significantly improve the conversion rate of your campaign.
Guest Post by AdNabu
AdNabu helps improve sales in Google Ads for eCommerce companies.