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With increased competition leading to higher keyword prices, one of the most important metrics in a search marketing campaign is the conversion rate of clicks to actions. An action might be a sale, a lead, or any other desirable, quantifiable result. Faced with increasing keyword prices, maintaining an acceptable return from a search marketing budget requires constant improvements in the conversion of clicks to actions.
To improve the profitability of a search marketing campaign, it is best to focus on the factors that affect the conversion of paid clicks to leads or sales. The conversion rate is defined as follows:
Conversion rate (%) = x/y * 100
where x = ‘measurable action’ defined as a sale, phone call, email, or other valuable result that can be measured.
and y = number of clicks
There are two ways to improve the conversion rate:
1. Increase the number of conversions
2. Decrease the number of clicks
In this article, we focus on the latter. Of course, we are not advocating that in all cases the marketer reduce the number of clicks. Our purpose is to provide guidelines on improving the
conversion rate and the campaign profitability through the removal of low quality clicks, i.e. those least likely to convert. A successful implementation
of this strategy will free up campaign resources which can then be reinvested to increase the number of higher quality clicks leading to more conversions and a higher conversion rate.
STRATEGY
Improving the overall quality of clicks requires the implementation of tactics to remove poor clicks that have little chance of converting to sales. The goal is to focus campaign resources on medium to high quality clicks.
• High Quality Clicks: These clicks are the most likely to convert as they represent searches that are highly relevant to the product or service the marketer offers. A marketer would be willing to pay more for these clicks as they are the most valuable.
• Medium Quality Clicks: These clicks are relevant but the searches are more general in nature and therefore representative of searches from users in an early stage of the purchase decision. They have value in terms of awareness that may lead to sales in the longer term and as such, a marketer would be willing to pay a lower CPC.
• Low Quality Clicks: These are worth little or nothing. They are not relevant to the marketer’s business and should be eliminated if at all possible.
Think of high quality clicks as being from internet users looking for an immediate solution; they are ready to make a purchase decision. Medium quality clicks are from legitimate potential customers that may not urgently need to buy a solution; they are fact finding, collecting information on what is available in order to make a
possible purchase at a future date. These clicks are still valuable but harder to quantify. Low quality clicks are from users who are not in the marketer’s target market; these clicks are for the most part irrelevant.
The strategy for improving overall keyword quality is to identify and remove the low quality clicks.
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