How To Measure PPC Ad Effectiveness Through Split Testing

Writing by Pay Per Click Journal on Monday, January 14, 2008 Comments (2)

(Source) Paid search accounts for more than half (57%) of the online advertising dollar, while display advertising has a 22 percent share. Advertisers say that’s because search works.

If you’ve been involved in search engine marketing or pay per click advertising then you aren’t surprised by these figures at all. Pay per click works.

Most people think of Google AdWords when they think of pay per click advertising, but Google isn’t the only show in town. There’s also Yahoo!, MSN adCenter, Miva, and several other smaller pay per click companies. Sometimes the small companies are more effective in getting you the traffic you want than the larger companies are. But the large pay per click companies are a good place to start.

Split Testing Beginnings: Where To Start
I recommend starting a campaign at each of the major pay per click advertising providers and using the exact same ad at all three companies. This is called split testing. By testing the same ad at all three service providers – Google AdWords, Yahoo! Search Marketing and MSN adCenter – you can decide which one is more effective in sending you the traffic that you want.

The ad will not cost the same at all three providers. It may read the same and target the same keywords, and you should point it to the same landing page as well, but you will likely be paying less per keyword at Yahoo! and MSN than at Google. You will also likely get more traffic from Google. But don’t just look at your traffic numbers. Compare conversion percentage to conversion percentage and ROI. The following table is fictional, but it should illustrate what I mean when I say compare conversions and ROI rather than traffic:

How To Measure Split Testing/Ad Effectiveness
These numbers are based on a unit cost of $19.99. With the Google ad, you are selling more units, but your conversion percentage to click throughs is lowest among the three campaigns. Your income is higher based on the number of sells, but your ROI is lower than the Yahoo! campaign and only slightly higher than the MSN campaign. These numbers are not taking into account the cost of producing and marketing your widget through other means, or any other fixed costs associated with the production of your product. But since those are the same across the board then they aren’t necessary for measuring the effectiveness of your PPC campaigns.

Of course, just looking at these numbers doesn’t tell us whether we should drop an ad or not. You are making a return on investment with each ad so I’d say that there is some effectiveness with each one. But you’ll need to look at your ad’s position at each search engine and determine whether you can make tweaks within each campaign to increase the overall effectiveness of your advertising. If your .15 bid per keyword at MSN adCenter positions your ad in the No. 5 position then you can increase your bid and affect the total effectiveness of that campaign, maybe even increase your ROI. The same goes for each of your other campaigns at Google and Yahoo!

Just remember, split testing your ads doesn’t necessarily tell you which one to drop, though it could. It does, however, measure the total effectiveness of your PPC ads and whether or not you can make each one more effective than it already is. And that is what you are trying to do.

Comments (2) Category: Ad Copywriting

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2 Comments

Made Friday, 18 of January , 2008 at 11:43 pm

I think it’s important, also, to make incremental adjustments in your spend after you take at least a month’s worth of data. It may be tempting to throw huge wads of cash at something you perceive to be performing well ROI wise, but if you over-do it, you’ll wind up driving Cost per Conversion up and ROI down in some cases.

Comment by Brick Marketing

Made Saturday, 19 of January , 2008 at 3:17 pm

Thanks for stopping in, Michael. I agree. Sometimes adjustments are necessary and you certainly don’t want to do too much too soon.