Q: What is the best way to test my existing conversion action setups

The best way to check that a conversion action is working/set up: Login to Google Tag Manager (GTM) (https://tagmanager.google.com/?authuser=1#/home) and go to your account and enable the Preview Mode If you refresh (or access a webpage) after you've enabled the Preview Mode, on the bottom (or on the right side) of the webpage you'll be able to see GTM data (tags which fired and which didn't) Complete the contact form and you'll be redirected to the Thank You (TY) page. On the TY page, verify if the Google Ads Conversion tracking tag fired, If it did, everything is ok. Testing The Landing Page Used In The Ad - If you want to test the landing page URL, it’s best to Google the brand name and click on the ad. Yes, this will spend money (although the CPC for the branded campaigns is always super low), but it’s necessary because of parallel tracking. Parallel tracking is complex, but it has to do with the fact that there’s the actual URL and then there’s the version of the URL with UTM parameters added to it (if you set those up). Sometimes, the UTM “tracking template” version of the URL can work without the actual URL working...which is dangerous, because it might give you a false positive if you just click on an ad from inside the account.

Question 1

What does "Proven ROAS" mean?

Accepted Answer

A campaign that has proven ROAS means that it’s ROAS is or was at whatever number you need it to be at in order to make a profit.

For example, a 100% ROAS means you spend $1 on ads and get $1 back.

This is never a large enough number because the business will undoubtedly have other expenses beyond just ad spend, so this campaign has not proven it’s ROAS.

400% ROAS is a general rule of thumb for the minimum number you should be aiming for if the business doesn’t know it’s exact costs & you therefore can’t calculate an exact ROAS metric.

This is because 400% lets you break even if the business has a 25% profit margin. You get to make at least 4x your money back to break even. If you want to cover an agency fee, then they’ll have to get to 450% ish.

Find current ROAS: All conversion value / cost

Find minimum, break-even ROAS: If 60% profit margin, figure out how many times 60% goes into 100% (60/100 = 1.7). Then, add two zeros to turn that into a percent and you get 160% break-even ROAS.

***Pro tip: If you are an e-commerce company, set up a custom column in Google Ads to display ROAS in a % format (fyi, if you don’t set this column up, you can look at “conversion value/cost” column which gives you the same ROAS number but in decimal format).

Question 2

What if a campaign is not spending all of the budget?

Accepted Answer

Sometimes businesses would rather gain more impression share than hit a super high goal because the goal might be more profit than they really need and they want volume/scale.

For example, if you are targeting ROAS, then the campaign prioritizes that ROAS over spending all the budget, which means you’ve reached audience capacity and your options are either:

Find a new/wider audience with different keywords
Lower the bid strategy goal

Question 3

What if I have a small budget of $500 monthly?

Accepted Answer

Accounts with small budgets (~$500) can be extremely difficult to optimize because there’s often not enough data to recognize patterns.

For example, if a keyword got 1 click last month and 1 click this month, should we increase the bid for that keyword? Well, 1 click is not enough information to make an educated guess.

In this case you may need to manually edit the budget twice per month because you want to spend the majority of it in a short amount of days and then pull back.

Do not turn on monthly budget because then it will spend that money evenly throughout the month, which isn’t ideal.

Question 4

What impact does running PPC ads have on my brand?

Accepted Answer

Brand Recognition is a by-product of running advertising - Companies that run PPC ads consistently receive more organic, more post ad click calls, & more direct traffic as a result. In fact, Google even takes some data from PPC ads and factors it into Organic rankings (like time spent on page, click through rates, etc.) This is anecdotal, but there is always a correlation when you look at the amount of money spent on ads and compare that with organic traffic to the site. Take this into consideration when you are calculating the impact running PPC ads has on your business.

Question 5

What is a Good Conversion Rate?

Accepted Answer

Across industries, the average landing page conversion rate was 2.35%, yet the top 25% are converting at 5.31% or higher. Ideally, you want to break into the top 10%.

Source: https://www.wordstream.com/blog/ws/2014/03/17/what-is-a-good-conversion-rate#:~:text=Conventional%20wisdom%20says%20that%20a,in%20the%20average%20performance%20bucket

Question 6

What is PPC?

Accepted Answer

That's a great question that deserves a great answer. Read more here.

Question 7

What is the best ad copy strategy to use for search campaigns?

Accepted Answer

The recommended approach for best ad copy strategy is to use 2 Expanded Text Ads & 1 Responsive Search Ad.

Every search campaign’s ad group has these 3 ads inside it.

The expanded text ads give a structured ecosystem to try out the two sets of headlines/descriptions you think will work the best, and then use the RSA ad to give you insights into which ad copy is most effective.

Effective copy can be a better click rate (which helps with the quality score) or a better conversion rate.

After there have been 100 clicks on the ads, then you can begin making changes to optimize the expanded text ads based on those insights.

Question 8

What is the best way to test my existing conversion action setups

Accepted Answer

The best way to check that a conversion action is working/set up:

Login to Google Tag Manager (GTM) (https://tagmanager.google.com/?authuser=1#/home) and go to your account and enable the Preview Mode
If you refresh (or access a webpage) after you've enabled the Preview Mode, on the bottom (or on the right side) of the webpage you'll be able to see GTM data (tags which fired and which didn't)
Complete the contact form and you'll be redirected to the Thank You (TY) page.
On the TY page, verify if the Google Ads Conversion tracking tag fired, If it did, everything is ok.

Testing The Landing Page Used In The Ad - If you want to test the landing page URL, it’s best to Google the brand name and click on the ad. Yes, this will spend money (although the CPC for the branded campaigns is always super low), but it’s necessary because of parallel tracking. Parallel tracking is complex, but it has to do with the fact that there’s the actual URL and then there’s the version of the URL with UTM parameters added to it (if you set those up). Sometimes, the UTM “tracking template” version of the URL can work without the actual URL working...which is dangerous, because it might give you a false positive if you just click on an ad from inside the account.

Question 9

What is the difference between Google Smart Shopping and Google Shopping Ads?

Accepted Answer

Traditional Google Shopping campaigns are only directed at users searching Google for a product to buy. This user sees the ads on a search engine results page.

Google Smart Shopping, on the other hand, is a step up. This outbound-heavy campaign uses algorithmic targeting to show ads to a very specific user. This user has shown serious interest in a specific product through their past search activity.

Question 10

What Should My MER Goal Be & Why?

Accepted Answer

Can You Remind Me What MER Is?

It’s essentially a business’ overall ROI from its media spend. (Media spend is usually synonymous with ad spend in the world of small eCommerce businesses, unless you print flyers or have other promotional expense that will scale as the business scales).

It stands for “Media Efficiency Ratio” and it divides the business’ total, gross revenue by its total media costs.

What Should My MER Goal Be?

The simple, two-step answer is this:

Step 1:

How many times does your profit margin go into 100? That’s your break-even MER.

By the way, we're using this calculation for profit margin = (Net revenue - Costs) / Net Revenue

Costs should include anything that will scale with each additional sale (i.e. COGs, fulfillment costs, & taxes)

Step 2:

Want to make more than just break-even so you can pay your bills? Tack on an extra 10%-30% and that’s your MER goal!

But Why?

The best way to understand why is with an example.

Let’s say an eComm business has an average profit margin of 30%. This means one third of the revenue is kept while two thirds of the revenue goes towards paying for COGs & fulfillment.

So, step 1:

Thirty goes into one hundred 3.33 times. So the break-even MER for this business would be 333%. Meaning this business needs to make 3.33X more revenue than what is spent on ad spend in order to break even.

When this business spends $10 on ad spend and breaks even, it means they made $33.30 in revenue (which is a 3.33X return). But remember, this company’s profit margin averages 30%. That means they only get to keep 30% of the $33.30 they made, or $9.99.

They are breaking even at about $10 spent and $10 made.

Now, step 2:

Let’s say they want 20% more than that to cover their bills. Then they’d go for a 353% MER (a 3.53X return).

So when they spend $10 on ads and make $35.30 in revenue (which is a 3.53X return), they get to keep $10.59 (aka 30% of $35.30).

Now they’re breaking even plus making an additional 59 cents each time they bring in $35.30 in revenue, which they can use to cover overhead and salaries.

Why Don't I Want My Goal To Be Higher Than That?

The higher the return you want to make on each sale, the less of the market you'll be able to capture.

This happens because, if you want a higher return, then you need to spend less and make more. The problem with this is that Google Ads is an auction system, and the cost per click is pretty "set." Meaning, whatever your competitors can afford to pay for a click, is what you need to also be able to afford to pay for a click. But if you want a return that's significantly higher than what your competitors are going for, then you won't be able to pay for a click that costs as much as they can.

Sales funnels always have folks at the "bottom of the funnel" who have their wallet-in-hand, and folks at the "top of the funnel" who aren't ready to buy yet. And so the people who aren't ready to buy are going to be more expensive. They'll need to click on 2 or 3 ads before converting. Some of them won't ever convert, etc. There's also people who will have a lower average cart value than other people. So, if you tell the algorithm "I only want the ones who are cheap to acquire and who spend a lot of money with me" then you're cutting out part of your market.

This is why a high goal will limit your ad spend & stop the account from growing. You won't be able to scale sales & the business will stay small.

Shouldn't I Factor In Repeat Purchases (Returning Customers)?

If you have returning customers making repeat purchases, it makes it easier for you to hit your MER goal.

But it doesn’t change your MER goal.

Keep in mind: Those customers will come back after some amount of time, so the MER will go up when that happens. This makes the MER goal an easier target for a business only after it’s able to get those repeat purchases in.

The positive consequence of this is that you get to grow your ad account (increase budget) & grow your business (increase sales/revenue) more quickly (and, eventually, more vastly than your competitors can). Have a higher repeat purchase rate than your competitors? You win the game! You have more power to win in the bidding/auction system that is digital ads, because you can afford to pay more to acquire a new customer (higher CPC) since you’ll get more revenue later from each of them.