The time of "visits and page views" has gone down in history. It is simple, either we start to measure our online Marketing campaigns well or we will fail. At Thatzad we have written a comprehensive report on How to Increase Conversions.
Today, web analytics is essential to measure the effectiveness of our campaigns, but we are not always clear how to interpret the results or what aspects to take into account. The time of "visits and page views" has gone down in history and these metrics are no longer enough to assess whether our campaign is working as it should or not.
Frequently we make the mistake of valuing the quantity and not taking into account the quality. How are we going to ensure the profitability of our campaigns only by measuring visits?
How to measure our campaigns: the importance of the quality of visits.
Doing massive CPM (cost per impressions) campaigns with a creative hook (Do you think Rajoy will win? Do you want to spy on your neighbor?…) guarantees us a very high number of clicks. Even if we pay CPC a lower cost per click, it doesn't have to be an advantage, either. Ensuring clicks on an ad if we do not take into account the quality of those clicks does not seem a very difficult goal to achieve. Instead, trying to turn those clicks into a purchase is something else. And to achieve this goal it is essential to correctly measure each and every one of our campaigns. It is precisely here where the key to success lies.
Let's see it better with four numbers:
Table 1.
I have a campaign that generates 100,000 visits to my online store. This campaign has a Cost per Click (CPC) of 0.12 cents and has generated 100 sales for a value of 50 euros each. Without a doubt, the campaign has generated direct losses of € 6000
Campaign B.
I have a campaign that generates 12,000 visits to my online store. With a cost per click (CPC) of 0.30 euros (much higher than the cost per click of campaign A) and it has generated only 80 sales at 50 euros each. This campaign has earned us € 400.
In campaign A I have a conversion rate of 0.1%. Our ROI in this case is -58%.
In campaign B I have a conversion rate of 0.67%. Our ROI in this case is + 11%.
We see how in campaign B we have fewer visits and a higher cost per click, but the quality of the visits is much higher, so the conversion rate is higher. This translates into an ROI of 11%, that is, we are earning + 11% for every euro invested.
On the other hand, in campaign A, despite having many visits, our ROI is negative, that is, we are losing money because the cost of the conversion is too high.
This is a clear example of the importance of measuring our campaigns well and obtaining quality visits. Taking a correct control we will be able to:
• - Have objective data to support us when we decide to go ahead with the campaign or cancel a certain action.
• - Optimize our resources by redistributing our budget among those actions that truly have a conversion.
• - And finally, we can improve our campaigns as a result of the knowledge acquired in previous campaigns
The keys to increase my conversions
Once at this point, a new question is likely to come up: Okay, so I've measured my campaigns and now how do I increase my conversions?
To improve our conversions we have two levers on which we can act:
• - Invest in improving the quality of attracting visitors (Internet or out site improvements)
• - Invest in improving the convertibility of the web (Web or on-site improvements)
I have an online store and I have invested a large budget in a marketing action. Before carrying it out, I have established a series of objectives so that I can later measure whether the conversions I expected have been fulfilled. In this case I have used the conversion funnel technique.
This model shows the process that a visitor follows once they enter our website. In this case, our final objective will be that the visitor ends up buying one of our products, and to do this, they must follow some steps:
1. Homepage: 100% of visitors will come to the homepage.
2. Navigation: Once you have reached the home page, we want the visitor to look at some of our products. We establish as a goal that of all those who have reached the home, 70% look at a product. Expected conversion ratio: 70%
3. Start purchase process: Once you have looked at some of our products and are interested in them, we want you to register in order to buy. Conversion ratio: 10%.
4. Purchase: Finally, the visitor makes the purchase. Conversion rate: 3%. Always regarding the total number of visits to our website.
If we have established this measurement process:
1. We will be able to measure the number of abandonments in each step.
2. We will be able to know if the problem lies in one of the steps and establish improvements.
It is in this last point where another of the keys to success resides. Many times we are wrong about data analysis and when we see that our conversion goals have not been met, we invest in more uptake (Internet) instead of investing in our own website. (Web)
Let's look at one last example following the conversion funnel above:
I have a campaign that generates 12,000 visits to my online store with a cost per click (CPC) of 0.80 euros, that is, we have invested € 9600 in raising funds. Those visits have generated 360 sales for me at 50 euros each. Therefore, I have a conversion of 3% and an ROI of 187%.
How to double my sales
Let's imagine that we set ourselves the goal is to double sales. As the campaign is working well, we decided to invest more money in it. Therefore, to double sales, we doubled the investment in acquisition and went from 12,000 to 24,000 visits. If we pay the same CPC (although normally more would be paid) the total investment in the campaign would be € 19,200. All this has generated 720 sales at 50 euros each. In other words, income of € 36,000 and an ROI of 187% (we doubled income by doubling investments, the ROI remains but the profit goes up).
But there is another option to reach our goal of doubling sales. If I decide to increase my conversion rate by investing € 5000 in the implementation of improvements in the navigation process (it may also be in the purchase process but the previous one is more critical), I will obtain a lower abandonment rate in this step.
If before, of the 100% that reached the home page, 70% browsed the page and only 10% started the purchase process, with improvements in web browsing and better showing the product, we found that instead 10%, is 20% the people who start the purchase process. This translates into an increase in the conversion rate from 3% to 6%, that is, we doubled sales but increased ROI to 253%.
Table 2.
To optimize our internet advertising campaigns the first step is to measure correctly. Not just visits, but conversions, revenue, and dropout rate at every step of the conversion funnel.
To increase our sales we have two levers for action, one to improve our campaigns (Internet or out site improvements) and the other to improve the conversion funnel of our page (website or onsite improvements). Without a doubt the best option is to attack both fronts, what is clear is that without a correct measurement and analysis of the results it is much more complicated to make our online campaigns profitable.
