Web Analytics: How to Stop Wasting Your PPC Dollars

Guest post by Brandon Clay

Advertising works. If you have a good offer and spend money on good advertising, you will earn revenue from your advertising efforts. Search engine or pay per click (PPC) advertising is a great example of revenue-generating advertising. Good businesses spending money on well-run PPC advertising should get a decent return on their ad dollars.

But not all advertising works – including PPC advertising. As soon as you start a PPC campaign, rest assured some of those Google dollars are going right down the drain. Whether or not you know it – you’re bidding on terms that will never turn into a sale. Famous 18^th century businessman John Wanamaker once said “I know that half of my advertising money is wasted… I just don’t know which half.”  This is especially true with pay per click advertising.

Analytics Tells You Which Visitors Are Likely To Buy

The good news is you can now know which half of your PPC ad dollars are being wasted. By measuring the effects of your PPC traffic through web analytics, you can see which PPC visitors like your website and which ones don’t. Better yet, you can see which visitors do something significant on your website – like contact you,  download an ebook, or make a purchase – called a conversion in PPC lingo. And knowing that information, you can spend more money on the types of visitors who like your website and will take an action, and stop spending money on visitors who don’t.

So how do you determine which visitors are welcome on your site and which ones should stay home? Before going there, it would be good to review how things work in the offline world…

Consider a dress shop and its shoppers. Some dress shoppers are more likely to buy than others. A good salesperson knows the difference. When the salesperson asks a shopper if they need any help, one visitor may reply by asking for different dress sizes. That visitor is more likely to buy than the visitor who responds to the salesperson’s inquiry with “I’m just looking.” Just like a salesperson can determine which shoppers are more likely to buy before a purchase, good web analytics can do the same thing for your website – and its PPC visitors.

How Web Analytics Works With Your PPC

What is web analytics? Simply put, web analytics measures website usage and relates it to the effectiveness of your PPC ads. Web analytics has several standard metrics. These measurements suggest different levels of web visitor interest in your site, and tie that interest to the keywords used to find your site.

PPC advertising sends traffic to your website initiated by search engine keywords. Internet searchers type in words into a search engine, see a list of results, then click on the ad which sends them to your website. Some of those PPC visitors are interested in what they see on your site – others are not.

Good web analytics will tell you, just like the salesperson, which PPC visitors are interested in your site and which ones are “just looking” and unlikely to take any action (or may have gotten there by mistake). Web analytics identifies and sorts these visitors in terms of the keywords they used to get to your site. Some PPC keywords will have high engagement with the website: low bounce rate, high average time on site, and more actions taken on your site. Other PPC keywords will have lower engagement with your website. The first visitors/PPC keywords are more valuable, while the other visitors/PPC keywords are less valuable.

How to Improve PPC with Analytics

The goal is to minimize traffic from less valuable PPC keywords and maximize traffic from more valuable PPC keywords. If you eliminate the bad keywords, then you have eliminated waste in your PPC advertising. The John Wanamaker problem of wasted advertising will be solved – at least for your PPC account.

Here’s how it works in real-life PPC…

Let’s say you own a website selling paint in Des Moines, Iowa. One visitor comes to your site from a PPC ad after typing into Google “learn to paint in Des Moines”. Another visitor clicks on an ad after typing “buy paint in Des Moines”. The 2^nd PPC visitor is much more likely to buy.  Like the dress salesman in the above example, you want to pay closer attention to the more promising visitor — but how do you do that?

If you review the web analytics activity for your site, you’ll see more positive activity for the second PPC keyword than for the first PPC keyword. The 2^nd visitor would have a lower bounce rate, more pageviews, and probably more sales compared to the 1st visitor. This tells you that “learn to paint in Des Moines” is probably causing you to waste money, while “buy paint in Des Moines” is a profitable keyword term for you.  Your best next step is to prune the unprofitable keyword terms from your PPC campaign and continue to experiment with other promising search terms till you find the ones that send the most qualified visitors your way.  You can stop wasting money and spend it only where it makes a proven difference.

Web analytics opens up a completely new layer of visibility on your internet marketing campaigns. Instead of living at the mercy of PPC-only metrics, you can now see which PPC keywords lead to buying-like activity on your website and which ones don’t. That way you stop wasting your PPC budget on worthless traffic – and start maximizing your PPC budget where it counts. John Wanamaker would be proud.