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Clicks vs Conversions and the relevance problem

[ Edited ]
Visitor ✭ ✭ ✭
# 1
Visitor ✭ ✭ ✭

Hello,

 

I'm wondering why I would ever rely on Conversions instead of Clicks, i have always though CPA can be  misleading. I mean a click is always a click, the user sees my ads and clicks on it. The conversion on the other hand, happens on my website, the user checks out the product and might like it or not, so i don't see the relevancy when it comes to the ad writeup.

 

Comparing two users who click on two very similar ads on my account, one converted, and the other didnt, its mostly because of the content in my landing page, why should one ad write-up be rewarded and served higher just because the user who clicked on it just converted.


So let's back it up with an example. I have two ads write-up for http://buildyourapp.today/features, exactly the same, but one with a price mentioned, and the other without a price. So now Adwords is serving both, one user clicks on the first, and the other clicks on the second, the first user converts and the second user does not. Now, Adwords is rewarding my first ad with the price mentioned because the user converted. However in reality, if the ads were switched and served to the same users, the user who converted, will still be the same user who converted, but he will be coming from the second ad (without the price). Again, the factors here that made the user convert is not the ad write up, it's

 

  • (1) the content of the landing page and
  • (2) and the intent of the user to buy.

 

This is why I don't see CPA work with similar ads write-ups. It might work with completely different ads write-ups, but not in my case.

 

This was just me trying to analyse things, i might be completely wrong, I would be very happy to hear from experts whether im driving to the right conclusions

 

--

Yehia.

2 Expert replyverified_user

Re: Clicks vs Conversions and the relevance problem

Explorer ✭ ✭ ☆
# 2
Explorer ✭ ✭ ☆
Hello @Yehia_A,

Clicks are more important when it comes to quality score and its influence on how much you need to pay to receive good PPC rankings on the AdWords search results page. Expected Click-Through Rate is one of the three factors of quality score. However, the ultimate goal of paid advertising is to generate business value, and that ultimately comes through conversions or customer leads / purchases/ calls / etc.

Conversions are always the ultimate goal of any complete paid advertising account. I would argue that if you are able to, consider using the Google Click ID, track the value of leads, and import actual dollar values of your leads back into AdWords to determine your ROI, as this will be a better gauge of account success vs. CPA which treats all leads as equal (whether or not they turn into an actual customer for you!).

Let me know if that helps!

Nick

Re: Clicks vs Conversions and the relevance problem

Rising Star
# 3
Rising Star
Hi Yehia,

The problem with your example is that the sample size is too small.

If Ad A and Ad B are identical except that Ad B mentions the price, and both go to the same landing page, a typical result would look like this:

Ad A - 1000 impressions, CTR 5%, CPC $1, Clicks 50, Spend $50, Conversions 5
Ad B - 1000 impressions, CTR 2.5%, CPC $2, Clicks 25, Spend $50, Conversions 8

So Ad B gets fewer clicks, because many searchers don't find the price appealing. But those who do like the price are more likely to convert.

In this case, Google will serve Ad A the most, even though Ad B is more profitable for you. So you can manually optimise the ads (ie pause Ad A), or instruct Google to show ads according to how well they convert.

Re: Clicks vs Conversions and the relevance problem

Rising Star
# 4
Rising Star
Definitely true. And that is why Google offers the different options.

I recommend not letting Google optimise until there is sufficient data. Otherwise they tend to favour the early winner before it is statistically relevant.

Re: Clicks vs Conversions and the relevance problem

Top Contributor
# 5
Top Contributor

Hi @Yehia A great question.  Firstly, as @RobSkelton has pointed out, you can't really look at handfuls of clicks when considering data relevance, I'd argue that even Google's limit (15 conversions in 30 days) is really far too little data to make informed decisions.  You're right, if it was 2 clicks, one on one ad and one on another, it'd make no sense to give benefit to the Ad that converted, but if it was 1000 clicks and that Ad still had a significantly better CVR, that's a much better indicator.

 

In terms of how Ad copy affects conversions, that's a very interesting topic.  It can (and has!!) been argued that a click is a click is a click, and conversions are the result only of what happens on the web site itself.  However, in my own experience, I know that some Ads do have better conversion rates than others, measured over many months and many thousands of clicks, so there is the real potential for Ads to affect conversions.  Ultimately, it's about two things: the type of person who is attracted to click the Ad and how your Ads compare to others being displayed.  Obviously, if one Ad tends to attract people who are just "window shopping", while the other attracts people who are ready to buy, that's going to have a big influence on the conversion metrics.  Why the Ads differ is up to you to discover.  The other aspect is how your Ads compare to others on screen.  If you don't display a price, the customer may decide to go for an Ad where they can see the price, for example.  

 

It's an interesting subject, one open to much debate!

 

Jon

AdWords Top Contributor Google+ Profile | Partner Profile | AdWords Audits

Re: Clicks vs Conversions and the relevance problem

Rising Star
# 6
Rising Star
Here's an common example:

Free Shipping!

All other things being equal, if your ad mentions free shipping and the others do not, in my experience, the ad converts better.

Not only do searchers dislike paying for shipping, they hate the arduous process of finding out the true final cost. Free shipping means when they see the price on the landing page they can make a quick decision.
(works best if they are searching for a specific item, like a model of camera - not people searching for "clothes for winter")

So this works for any strong point of difference you might have.

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