Usability Testing User Experience

An Experiment on Increasing ROI of an Adwords Campaign

adwords-experiment-roi-1

 

In this experiment we will take an existing internet-based product, create a PPC Adwords campaign for it, design landing pages and optimise them to get the best ROI possible. As a digital marketer there is an abundance of theory on the internet to learn from. Let us apply some of those to see if they work as they are supposed to.

The Product being Tested (the lab mouse)

For this experiment we will run campaigns for a internet-based service called Recordator.com. It is a service that small businesses and professionals use to record their important phone calls. Small businesses and market research firms use it to record their user experience interviews and conference calls, while journalists and PhD thesis students use it to record their client or research interviews.

recordator logo

The primary customer acquisition channels are organic search traffic from Google and Facebook.

What we hope to Achieve – Target ROI and CPA

When running a pay-per-click campaign, say, an Adwords campaign, you need to attain what you would consider an acceptable ROI. That is, however, easier said than done. Multiple factors affect ROI, many of which will be outside the scope of a single marketing campaign.

In this experiment we will pull levers within our control to achieve the following CPA and ROI.

Target CPA – of $15, Target ROI – 100%

What we have to Work With

We have two broad areas of attack.

1. Offsite / AdWords Optimisations 

As part of offsite optimisations, we will limit our scope of work to Adwords. In Adwords, we have selected three metrics that we are going to monitor and optimise – Quality Scores, ROI and CPC.

a. Quality Scores

In Adwords, Quality Score (QS) is Google’s estimate of how relevant your ad and landing page are to the keyword you are bidding for.

Quality Score (QS) is important because your actual CPC is inversely proportional to the QS. According to Hal Varian, Chief Economist at Google, the actual CPC you pay is determined by the following function:

Actual CPC paid by you = (QS of the ad shown below you * Bid of the ad shown below you) / Your QS

I would recommend you to watch this very interesting video by Google’s Hal Varian talking about the relation of QS with ad ranks and CPCs. Though published in 2010, it should help with the fundamentals.

Thus QS has a direct impact on ROI.

QS of a keyword assigned by Google is in turn determined from three contributing factors:

1. Expected Click-through Rate – This is assigned by Google based on your ad’s past performance. According to this research by Wordstream, you should make sure your expected CTR rating is at least “average”. Improving CTRs beyond “average” will have marginal impact on the QS.

If you have watched the video by Hal Varian mentioned above, you would realise that expected CTR is the most important contributor to QS (followed by ad relevance). Expected CTR is derived from historical actual CTRs. Thus we should make sure that our CTRs are top-notch. To achieve this we need to make use of various ad extensions – more on this as we start our experiment.

2. Ad relevance – This is Google’s estimate of how relevant your ad copy is to your keyword

3. Landing page experience – Google’s estimate of how relevant and useful your landing page will be to the people who click your ad. We will be taking this up in the second leg of this experiment.

b. CPC and ROI

ROI is the ultimate metric you want to track for your business while running a marketing campaign. However it may not be always possible to calculate an ROI immediately. This could be because your sales cycle is quite long, or if it is difficult attributing a sale to a campaign. In such cases you use your past history and assume expected values for these metrics to calculate ROI.

 

2. On-site / Landing Page Optimisations

In the second leg of this experiment, we will create several landing pages and optimise them. We will apply existing literature, principles and best practices advocated by marketing gurus to our designs and document the effects they have.

The metrics that we will track as part of this exercise are:

1. Conversion Rate

The conversion rate here refers to sign ups divided by the number of users (as per Google Analytics) received on the landing pages.

Call recording is usually a low-involvement, almost transactional, purchase. Though for certain segments it can be a high-involvement purchase as well. We shall address different segments with variations of landing pages, with a message customised for each segment.

2. Adwords Landing Page Experience

When you create a search campaign on Google Adwords, Google gives you a Quality Score (QS) for each of the keywords you target. Quality Score (QS) for a “keyword” is Google’s estimate of how relevant are your ad and landing page to the keyword.

One of the components of the QS is the landing page experience score. This is Google’s estimate of how relevant and useful your landing page will be to the people who click your ad. The possible values for it are Below Average, Average, or Above Average.

3. Cost Per Acquisition

This is the cost incurred for acquiring a single prospect or in our case, a single paying customer.

In the next article we will begin with the first leg of the experiment – Off-site / Adwords Optimisations. Do subscribe to our email list to receive an alert when the next article is up.

 

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