Google AdWords Advanced Bidding Techniques Using Search Funnels

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AdWords follows last click attribution model, meaning it only attributes conversions to the keywords that were clicked last before the visitor converted. However, there is a whole set of ads and keywords that aided in generating the conversion before that last click. AdWords doesn’t attribute credit to these keywords and ads that helped make the sale.

Why is knowing these keywords and ads important?

Not knowing about the various keywords and ads that assisted in the conversions mean that you as an advertiser are probably undervaluing keywords that are valuable. This means you could either stop advertising such keywords totally, thus missing opportunities, or under spend on such keywords, leading to a poor return on investments.

AdWords Search Funnels helps address this issue by providing insight into the various keywords and ads that a visitor used as part of the buying process before converting (i.e. keywords and ads that assisted in generating conversions, but weren’t the last click).

Where to find them?

Log into you AdWords account –>Click on Tools and Analysis –> select Conversions –> select Search Funnels

 

Google AdWords Search Funnels

Google AdWords Search Funnels

It provides a detailed view of visitor behavior including:

  • The time a visitor takes to convert from the first click on your ads to the last click before performing an action you consider as conversion.
  • The various keywords used across the buying cycle.
  • The various keywords that assisted in generating conversions, even though they were not the last click

I had already spoken about using Assisted Conversion report to more effectively determine the value of keywords. You can check it at

Time Lag Report

Have you come across a situation where the monthly conversion data of campaigns reviewed at the end of the month and again at a later date for the same time period don’t match? Let’s say you had 300 conversions in your AdWords campaigns for May on May 31st. At the end of June, you check the AdWords conversion data for the month of May and find it has increased to 325.

AdWords uses last click attribution to track conversions. Let’s say a visitor clicked on your ad and within 30 days visited your website directly to make a purchase. AdWords will treat it as a conversion and allocate it to the respective keyword.

For example, a visitor clicked on your ad on June 30th but didn’t purchase. The same visitor returned to your website by directly typing in the url and made a purchase on July 15th. AdWords will allocate this conversion to the click from June 30th.

Please note that AdWords uses a 30-day cookie window. So if a visitor clicked on your ad and made a purchase more than 30 days later, that conversion won’t be credited to the last click from AdWords.

Since AdWords uses a 30-day cookie window for allocating conversions, choose date ranges that have at least a 30-day time period ahead of them. Select Complete Paths and From Last Click. Select your Primary Dimension as Days to Conversions. AdWords also offers 30, 60 and 90-day history windows. Choose the history window based on your customer buying cycle duration. The report shows:

  • Days to conversion.
  • Conversions – the number of conversions generated within the specific time period.
  • Value – the actual value of the conversion generated by the keyword.

The following is the data from one of the accounts we manage.

AdWords Search Funnel Time Lag Report

AdWords Search Funnel Time Lag Report 

I am presenting the same data in a table format for more clarity and easy understanding.

AdWords Time Lag Report Data

AdWords Time Lag Report Data 

From the above data, it’s easy to understand that 76.61% of the conversions happened within the first day. We are concerned about the conversions that happened after the first day, which is the difference between 100 – 76.61 = 23.39.

This means 23.39% of conversions happened after the frst day, with 10.14% of conversions taking more than 12 days. What if you generated clicks on the last day of the month and factored only the conversions that occurred on that day? That means you are not factoring in the 23.29% conversions that will be generated from all those clicks on the 30th or 31st.

Why is knowing this important?

If you are an advertiser who wants to know the actual return from your advertising dollars every month, then it’s important to know this. If you are an agency working on a pay per performance model, then it’s also important to know this in order to be compensated for all of the conversions.

Many advertisers don’t factor the time lag conversion data when reviewing monthly PPC campaign performance. How effective will my bidding decisions be if I base them on only 73.41% of the conversion data, without factoring in the 23.39% conversions, and not factoring in the complete ROI from advertising spending?

This percentage will vary greatly depending upon the type of businesses and the vertical you are in, but you should make sure to check it out to determine how significant the conversion rate is post 30 days. Knowing this information will allow you to bid more effectively and help to generate better ROI.

What can you do about this?

Select the last 4 to 6 months to calculate your average time lag conversion rate, and use it to factor for the conversions that you are going to generate from the current month clicks at the end of each month. Remember to also consider seasonality when analyzing such data.

Further analyze the AdWords keyword conversion data at the end of the month and save it. For example, let’s say you checked your conversion data for the month of May on May 31st. At the end of the next 30-day period on June 30th, download the reports for May 1st to 31st again. Compare the keyword conversion data across both reports to determine the keywords that had incremental conversions, the keywords that converted for the first time, the click costs, and the ROI.

Repeat this for 3 to 4 months, working backwards to determine which keywords are converting often, their conversion rates, the click cost and the ROI. Use this information to bid more effectively on keywords.

I hope this approach helps you better determine the value of keywords and bid more effectively.   You can find more details about the search funnel and the various metrics within it at http://support.google.com/adwords/bin/answer.py?hl=en&answer=1722023

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About 

Siva helps Pitstop Media's clients define and implement online marketing campaigns delivering solid results. He writes on various PPC subjects and he is especially thrilled with Quality Score.

 

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