Using AdWords and PPC for Ecommerce Websites

by Jessica Ramesh Anicca Digital

Ann Stanley, Managing Director at Anicca, explains how to optimise your site for conversion

Google AdWords and MSN AdCenter (which feeds Bing and Yahoo) are the most popular PPC platforms for ecommerce websites. LinkedIn and Facebook pay-per-click (PPC) are normally too expensive due to a high cost-per-click (CPC). However, AdWords is becoming so complex that it is essential to have specialist knowledge in order to achieve an affordable cost-per acquisition (CPA) and a positive ROI.

Overview of Google results

So what are the most important aspects of running a PPC account? First, cost-per-acquisition. Calculate your target CPA for every product you sell to ensure you can afford to use PPC. For example, your CPA will be £25 if your conversion rate is one per cent and your CPC is 25p.

Quality Score is Google’s measure of relevancy, which can affect your position and how much you pay. Your AdRank is the maximum CPC bid multiplied by the Quality Score for each keyphrase. The higher the AdRank the higher your position. Your CPC is determined by the amount you pay to beat the AdRank of the competitor below you. If you improve your Quality Score, you can reduce costs. For example, if a keyphrase has a Quality Score of 10 (maximum), you will pay half as much as a competitor with a Quality Score of five (for the same position). In terms of position and branding, high competition will force up your CPC and resulting CPA. You may have to bid lower (for example, positions three to six).

Quality Score factors

The main factors which influence Quality Score are keyphrase/ad relevancy – maximise your Quality Score by finding thousands of keyphrases split into tightly themed ad groups (with a matching ad). Landing page relevancy should include your keyphrases (for example a category or product page). Your landing page needs to be fast to load and include links to your T&Cs or privacy policy. Clickthrough-rate (CTR) is the biggest factor in Quality Score. A low CTR will drag down the Quality Score of all the other keyphrases in your account.

Campaign set-up

• Create individual campaigns for each product, with additional clones for targeting include your display network (including remarketing) in a separate campaign. Include mobile devices and desktop devices in separate campaigns in order to allow you to optimise them differently.

Note: Google has just announced new enhanced ads, which will use bidding to control exposure across the different devices. With geo-targeting, create clones of the above campaigns for local or international targeting.

• We use the technique in fig two to create ad groups with single or tightly themed ad groups.

• Create a brand campaign in order to block out competitor activity. Depending on your market, you may also have to bid on competitors’ phrases.

• Ad extensions can be used to enhance your ads and encourage click-through-rate. Dynamic search ads allow you to set-up ads without bidding on keyphrases. You create a dynamic ad and a select a URL relating to the specific category within your site.

• Remarketing ads is where a cookie is placed onto the user’s device after visiting your site. The user is then shown ads when they visit other sites in the display network. Remarketing generally has very good conversion rates and is more cost effective than traditional display ads.

Tracking and analytics

Automatically return the user to a ‘thank you’ page (from each payment gateway). Add an Analytics ecommerce tracking code. Use PPC conversion tracking with dynamic code so the value of the sale is imported back into AdWords. Set-up Google Analytics Goals and Sales Funnels in Analytics for each of the steps in the shopping cart.

Call tracking technology

Google offers call tracking but third party software is currently more cost-effective. The user calls a dynamically generated phone number on your site; the source of the call is recorded and a virtual page is created in Analytics allowing a goal to be created. The goal can be imported into AdWords so the conversion is tracked against the original keyphrase and ad, allowing call optimisation. Use event tracking in Analytics for sign-ups, video views or downloads. These can be used to create a Goal and import into AdWords.

Reporting, revenue and ROI in AdWords

AdWords records the conversion against the last PPC click, so conversions can increase over a number of days. Set up conversion tracking with a dynamic sales value and display the value of the sales. Use search funnels (within the Conversion menu) to find keyphrases that assisted in the conversion but were not the last click. You can also see the average number of clicks and time to a conversion.

In analytics

Within the AdWords reporting section of Analytics use the Click tab to display revenue and the ROI for campaigns, ad groups and keyphrases. Use the Conversion menu to see conversion pathways and attribution modelling.

Maximise your conversions

Initially optimise to maximise the CTR, positions and Quality Score of the keyphrases in order to get as many relevant clicks for your budget. Then optimise for conversions: pause keyphrases or ads that convert at a lower conversion rate than the average. If a keyphrase is converting at an affordable CPA then you can push up the bid to get higher positions, maximise clicks and therefore conversions. If the CPA is too high then you may have to drop the bids to reduce the CPC and the CPA. Use ad testing (challenger ad vs champion) to increase CTR and conversion rates. Use landing page testing either in AdWords or Analytics.

Optimising for revenue

Either import the revenue in your AdWords dashboard or use Analytics (or third party optimisation tools) to assess the revenue and ROI. Optimise for revenue by pausing keyphrases and ads with low conversion rate/low revenue/low ROI/no conversions/ revenue but which spent more than your target CPA.

We would normally expect brand campaigns to generate revenue of 10-50 times the ad spend, whereas product or generic phrases will generate 5-20 times the ad spend.