Setting advertising goals

For companies that are interested in branding, clicks and engaged visitors are sufficient. However, for most businesses, the ultimate goal is not simply a click, or a website visit, but a sale or a lead. This type of action that we want website visitors to ultimately take on our website is also known as a conversion.

Getting ready

Before you start spending money on AdWords, you will want to determine what you'd like your visitors to do once they come to your website. It's important to understand your end goal so you can properly track and measure results of your ad campaigns.

How to do it...

Think about what you would like your visitors to do once they come to your website. The following are some common conversion goals advertisers have:

• Sales

• Registrations

• Leads

• Downloads (whitepapers and apps)

• Sign-ups

• Visits to a particular page, such as the contact page

The goal of online ads is to get as many visitors as possible to take the actions you previously identified. In essence, you'll try to maximize clicks that result in conversions and optimize the ad to increase your conversion rate.

There's more...

Conversion rate is the number of conversions (sales, leads, and so on) divided by the number of clicks received during a set time period. For example, if you received 5 online leads (conversions) out of 100 clicks from AdWords, your conversion rate would be 5 percent.

Conversion rate = Conversions / Clicks x 100

Conversion rates vary based on a variety of factors, including a website's look and feel and how easy or difficult it is for visitors to get through the conversion process. You can get an idea of how your website converts and how many visitors are completing your desired actions in your Google Analytics account, or through other web analytics programs you may be using.

Simplicity is key, and you should aim to minimize distractions and website features that would complicate or hinder the conversion process. For example, "Buy Now" buttons should be prominent and easy to spot, contact options displayed prominently on the website, and lead and registration forms as simple as possible.

I have heard industry experts throw around 2 percent as an AdWords average conversion rate across different industries. Typically, websites with a higher level of commitment required on a user's part (such as e-commerce) will have lower conversion rates than websites with lower levels of commitment required (such as lead generation). The Fireclick Index, http://index.fireclick.com/, can help provide some additional guidance on online conversion rates by industry.

The simpler conversion goals such as lead generation or e-mail collection will usually convert closer to 3 percent but can go as high as 5 to 15 percent. For lead generation, conversion rates can be all over the place since the marketing offers, the value of the product, and costs vary so widely.

See also

• The Predicting if AdWords will be profitable and calculating potential returns recipe