What’s The Best Measure For Lead Generation Google Ads

in FAQ

So just what’s the right measure for managing someone who’s running Google Ads for you?

Getting these measures right is vital because if you set the wrong goals for people, you will drive behaviour you don’t want.

In this video, we will look at some approaches you can use to judge the success of your Google Ads campaign or manager. We focus on lead generation campaigns.

This post was first published on Onlinebusinesbuildeer.com.au, an old website of mine and some of the logos are still in the graphics or videos. Despite this - the content is still relevant

Video Transcript

Reasonable goals have both a quality and a quantity measure. This makes sure people don’t produce quantity with junk or extremely high quality with no volume.

The Google Ads Funnel

To answer the question, we need to look at a typical Google Ads funnel.

Right at the top of that funnel is impressions. That’s the number of times your ads exposed to searchers on Google or other sites.

If they’re interested in what you are advertising, people click on your ads. So the measure of that is clicks.

When someone gets to your landing page or website, and they are interested in the service you offer, they will convert. That conversion could be completing a form or phoning your business. They can also convert by calling a number in a Google ad. They are not real conversions but conversion to a lead.

The last level is actually converting the lead to a sale.

What’s Easy And Hard To Measure

Your Google Ads manager can measure and report on all of these. But some of them are more important than others.

As a business owner, you should focus on sales and align your Google Ads manager with that as well where that’s possible.

Obviously, that creates aligned behaviour because everybody is working towards generating sales and that’s where the money is made.

Clicks, click thru rate, impressions, impression share, and the like are not useful measures..they are indicators the Ads Manager can use as part of the optimisation process

Clicks are actually an inferior way of measuring what’s going on. If you drive your Ads manager to increase the clicks, they could easily do this, adding less relevant keywords to your campaigns or writing clickbait ads. The net result of this is you would spend more on clicks but you don’t produce the proportionately more sales.

But these should not be KPIs, and you should not use these as a management measure without looking at other factors. Some of the important KPI’s relating to sales are:

  • The number of sales
  • The total cost of the sale in advertising dollars
  • The value of the sale produced in terms of dollar sales to you in the first transaction
  • The value of the customer overall. It might be that they might buy one thing but end up being far more valuable in the long run
  • Last is the source of the sale. In the context of Google Ads that means tracking back to the keyword and the campaign.

Options For Measures Of Success

As a business owner you have two main options of measuring success:

  1. Sales made from Google Ads generated leads and the value of those leads vs the cost of getting them
  2. Or the number and cost of the leads generated

To directly link Google Ads keywords, ads and campaigns to leads is easy. To link this to the actual sale is harder as you need reliable tracking and a good CRM or sales pipeline management system.

To track conversions, you also need to have proper tracking of phone calls. This is because you need to follow phone calls back to the campaign, keyword, and ad that created the click that resulted in a lead which ended up in a sale.

Aggregate Data Is Not Actionable

It’s not a lot of help just saying we got 100 leads and closed 30 of them. This is because it does not tell the Google Ads manager anything about the 70 you didn’t close or the 30 you did close. That’s because there’s no direct connection back to the campaign, keyword or ad that generated the lead.

That level of tracking and using a CRM can be both a time and cost consuming proposition for some business owners.

And some owners don’t want to go to this level. Also it’s not that useful if you’re only getting 5-20 sales a month from your Google ads.

No CRM? Manage From Conversions and Conversion Cost

If this is the case the next best measure is conversions, as Google calls them, are really just leads generated. They are a useful measure.

Conversions are very close to a sale. But leads are not sales, and they can send the wrong messages. For example, the Google Ads manager might think they are doing a great job as leads to clicks, and total leads are increasing. Yet at the business end, more and more leads are not converting.

Useful related measures are the cost of a conversion and the number of conversions.

So as a business owner, what measure should you mostly focus on? My recommendation is conversions (leads).

You need to hold the Google Ads manager accountable for both the volume of conversions and the cost of conversion.

  • If you measure just volume, it’s easy for the cost of each conversion to blow out as the manager tries to get more conversions.
  • On the other hand, if you focus just on conversion cost, then the total volume of conversions likely drops as the manager works to drive down these costs.
  • For a quality measure, you are really looking at the conversion of those leads to sales.

It’s not fair to hold a Google Ads manager accountable for sales in total because they are not making the sales to your customers.

However, everyone should be aware of the value of those leads and which leads are converting better than others if that’s possible.

Last you should leave your ads manager to worry about impressions and clicks and all the related noise that they need to keep an eye on to generate conversions. It’s not something that you as a business owner should spend your time worrying about.

Instead, just ask them these questions from time to time:

  • What’s the cost of a conversion? How does that vary by campaign or offer?
  • How can I get more conversions?
  • Will increasing my ad spend increase my conversions?
  • Is my conversion cost vs the value of the sale about right?
  • What is the profit maximising conversion cost?
  • Why did conversions increase (or decrease) this month compared to last month?
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