Calculating conversions (total or individual?)

ctr, conversion

[datadirect]

Lets say I'm bidding on 75 keywords, and I judge a 2% conversion to sale of visitors as a success for my campaign.

Should that 1% be judged on an individual keyword basis, or on all the keywords combined?

I ask because up to now I've had 4497 impressions of my 75 keywords, with a 1.11% clickthrough, making 50 clicks. If I'm measuring my success rate against all the keywords in a campaign combined, then I should have 1 sale by now (50 clicks = 1% = 1 sale).

However, if I was measuring my success against each keyword individually, then I would have to wait until each keyword itself gets 50 clicks before seeing if it makes a sale to achieve my target 2% conversion (1 sale in 50 clicks).

I know advertisers conversions vary between say 1% & 5%, but I've never understood if thats based on total keywords combined (in which case you can judge success much sooner), or each keyword itself (in which case the campaign has to run on much longer for them all to get enough clicks)?

Of course, all keywords are quite similar in the campaign, so guess that has a bearing on the answer, for example:

driving instructor training
driver instructor training
how to become a driving instructor


Many thanks,
Dave

[LucidSW]

You have to compare something to something. Therefore, you have to compare smaller bits to the campaign as a whole. If your conversion rate (or whatever other metric you are looking at such as click rate) is say 4%, you must compare an individual keyword to that 4%.

But you also need enough data. 50 clicks is not enough and one sale is certainly not enough. You need to be more confident that you can maintain a 1% conversion rate or whatever number and metric you're looking at. My base number is 20 clicks or 20 conversions. More is better. When it reaches 30, I'm even more confident. So when I test ads, once both reach at least 20 clicks, I am very confident which one will consistently outperform the other's click rate. Same for conversions of which I need 20 for each. Same idea when drilling down to the keyword level.

[RhinoFish]

i concur, 50 clicks isn't enough data.

if your keywords are very tightly themed, you can increase confidence in the aggregate statistics. once you get proficient on tightness, you'll only spend time optimizing individual keywords that are proven high performers with moderate to high volume. if you judge too soon, lacking segmentation, organization, match type and bid level via tight themed groupings, you'll be randomly killing and randomly praising the wrong pieces. focus a little higher than each keyword, but only do that with a sniper approach, not shotgun.

[datadirect]

Thanks, just to add something though:

I've now had 5250 impressions and 59 click throughs, so 1.12% (spread average across about 50 keywords).

Thos 59 clicks have cost £34, and the product I'm selling has a profit margin of £37.

So I read that as needing to make at least one sale by now for the product to be viable. Any more clicks without a sale means no profit right.

I mean - if I'm aiming for 1%, 2% or whatever, as a rule of thumb, surely that percentage target should even apply to the first 100 clicks? Or should a campaign need to run for much more to start averaging the 1%, 2% etc?

[LucidSW]

Don't forget that your ads are only the carrot to get people to your site. While I believe an ad can affect your conversion rate, no 95-character ad closes the sale. That's your site's job.

Your 1.12% CTR means nothing by itself. What's your position? More important, what's your QS? It tells you how well your ads are doing compared to others.

As for a percentage applying to the first 100 or the next, it simply doesn't work that way, especially if you're talking about only a 1% sale conversion rate. You'll have lots of differences from one block of 100 visitors to the next. Frankly, my opinion is, for most cases, a 1% conversion rate is very poor. You need to do a better job on your sales message. If you don't give visitors a reason to buy from you, they won't, especially if a competitor gives them a good reason to buy from them.