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Andrew talks about common mistakes new advertisers make about metrics. One of the biggest oversights is to focus on a specific metric without taking into account all of its implications. For instance, one can focus on something like trying to find the lowest CPC keywords. It seems like the natural thing to do, right?
When you go to store, you will most likely be drawn to a sale or promotion. However, AdWords does not work the same way, since it is an auction. People bid more for high valuable keywords because they work. Andrew goes in more detail as to why this approach will bring the most value to you and other useful tips to make the most out of your metrics.
Video Transcription
Today, we’re going to talk about metrics and why metrics is one of the most common things that new advertisers make mistakes about. So one thing I see a lot from new advertisers is that you look individual at each metric. For instance, an advertiser can get hell bent on finding the lowest CPC keywords, but at the end of the day you’re not earning a lot of money if you just find keywords with the lowest CPC because Adwords is an auction.
AdWords Auction
With an auction people will tend to bid more for high valuable items. It’s the same thing in Adwords. If a keyword has a high value, which means that it brings a high ROI, a lot of customers, a lot of transactions, then it will cost a lot more money to bid for and to get clicked for. If you only go after low CPC keywords they’re the ones with lower competition because it has no value for your competitors. No value for your competitors means that it has no value for you.
CTR
The same thing happens with metrics if you go into other metrics. For instance, if you start looking at CTR and you only try looking at I just want to have high CTR but you have a low conversion rate because in your ad you write “free flat screen TVs” and when they come into your site it’s actually the TV that costs $1,000.
A Balance Between a High CTR and a High Conversion Rate
People are not going to buy that when you write free flat screen TVs. So you need to have a balance between having a high CTR and a high conversion rate. On the other hand, you don’t want to have a low CTR and a high conversion rate because, again, the balance means that you don’t get enough out of Adwords, and you’re not going to get optimal out of Adwords. So, at the end of the day when you’re looking at your Adwords metrics, find the balance, find the keyword with the right CPCs, with the right conversion rate and with the right click-through rate that will enable you to get the highest ROI possible out of your Adwords.
