Run Your Brand Phrases In A PPC Campaign? Part 2: How to Test the Results
In part one, we asked, “Should you pay to run your own brand phrases in a PPC campaign such as Google Adwords when most of these phrases are reaching top “organic” search results anyway?
Our testing shows it usually pays off. We get more conversions with our clients’ brand phrases running in a PPC campaign, than from organic search alone.
More importantly there’s usually a very positive ROI from the additional conversions (Gross Profit less the cost of the PPC campaign).
In part one we showed you why it usually works. In this post, Part-2, we’ll show you how to test the results to see if it’s paying off for you.
Steps to Test the Results of
Running Brand Phrases in PPC
Setup & Optimize Your Brand Ads – Setup one or more AdGroups for your brand phrases. Optimize them just like any other adgroup by testing ad copy, testing keyword variants, adjusting keyword positions. Get the adgroup(s) performing at its best. This could take one or more months.
A Note about Your Daily Budget. Check your daily budget. Ideally you’ll want your brand ads running as close to 100% of the time as possible during the test so check your daily budget.
Are you spending your daily budget most days? If so check the impression share you’re reaching. If needed plan to increase your budget high enough during the test to have your brand ads running as close to 100% of the time as possible. This may mean running your brand phrases in a separate campaign so you can maximize the daily budget
Setup an analytics system such as Google Analytics. It should be set up so that it is tracking some meaningful goals such as signups, purchases, or leads etc or if needed some strong indicators of future conversions such as views of key pages, etc (but this will make it harder to estimate ROI).
Run a Time Series (On/OFF) Test
Once the brand adgroup(s) is optimized you’re ready to run the test.
Because you’re testing the results of running your brands in a PPC campaign versus only receiving organic search traffic for your brand phrases I don’t think there’s a way to run an A/B test (If anyone figures out a valid way to do this let us know). Instead you’ll run one or more Time Series tests: an On/OFF test.
Running an On/OFF test is very simple. Just pause the brand adgroup(s) for a period of time then turn the brand adgroup(s) on for a period of time and compare the results for each period.
How long to run the test. You’ll need to run the test long enough to collect enough conversion data to make a valid comparison between the two tests.
Estimate how long you’ll need by looking at the number of conversions you were getting from the brand phrases as you optimized the brands adgroup(s).
About Latent Conversions. Hopefully you have some idea about latent conversions for your web site – that is, people who come to your web site but don’t convert on the first session. Instead they return to the site at a later date and convert. You’ll need to have the on/off periods last long enough to account for latent conversions too.
About Offsite Conversions. Hopefully you have a large enough percentage of conversions completed online to compare the results of the test periods. If not you’ll need to try to tracking your offsite conversions too (conversions competed on the phone or by visits to a facility etc). See the For More Information section at the end for a link to an article about offline conversion tracking.
Compare the Results
Using your analytics compare the results with the brand phrases running in a PPC campaign vs. the period with the brand phrases not running in the PPC campaign.
Compile the following data for each period. If you have many variations of your brand phrases then you may want to compile data for some number of the top brand phrases only.
Compile the Number of visits, Conversion Rate, and the Number of Conversions including both organic and PPC search results.
Here’s an example of results with and without brand phrases running in PPC.
|
Visits |
Purchase Confirmation % |
No. of Purchases |
|
| Brand phrases running in PPC |
1905 |
10.29% |
196 |
| Organic brand phrases only |
1711 |
9.00% |
154 |
If there were no more conversions with your brand phrases running in PPC than without, you’re done – test over! It looks like it doesn’t pay to run your own brand phrases in a PPC campaign. However see below about running the test multiple times.
If there were more conversions with your brand phrases running in PPC the next step is to estimate the ROI from those additional conversions.
Estimate the ROI from the additional conversions
To do this you’ll need some reasonable estimate of what a conversion is worth to you. This could be the average gross profit you make on a sale or some lifetime value of a new client, etc.
For lead generation conversions you’ll need an estimate of the number of leads you typically need to result in a sale and figure that into the calculation (Or you could also use a maximum amount you’re willing to pay for a lead. This is a slightly different calculation)
Here’s an example based on the numbers above –
Assume the company in the above example makes about $150 in gross profit on a sale. Then below is the additional gross profit from their brand phrases running in PPC:
|
No. of Purchases |
Gross Profit |
|
| Brand phrases running in PPC |
196 |
$29,400.00 |
| Organic brand phrases only |
154 |
$23,100.00 |
|
Additional Gross Profit |
$6,300.00 |
Now assume the average cost per click (CPC) for the brand phrases is $0.25 (that’s an actual average CPC for one of our clients. As we said in Part 1, the average CPC for brand phrases can be much lower than the average CPC for non-brand phrases).
So even if they had to pay for all 1905 of those clicks (very unlikely), that’s about $476 in ad spend.
So this company netted at least $5,800 in additional gross profit in one month by running its brand phrases in a PPC campaign ($6,300 in gross profit less $476 in ad spend).
Notice the Higher Conversion Rate
Did you notice there was also a higher conversion rate for the period when the brand phrases were running? Here’s the numbers again:
|
Visits |
Purchase Confirmation % |
No. of Purchases |
|
| Brand phrases running in PPC |
1905 |
10.29% |
196 |
| Organic brand phrases only |
1711 |
9.00% |
154 |
We see this most of the time too. Take a look at your conversion rate for just the brand phrases running in the PPC campaign. For many of the reasons we talked about in Part 1 you may have a higher conversion rate for your brand phrases in the PPC campaign than you do from organic search results.
However we often see the conversion rate for the organic search results also increase during the period when the brand phrases were running in a PPC campaign too. It appears that having a top result in both the PPC Sponsored Listings and in the organic search results helps improves the conversion rate overall.
About running multiple tests
There is an inherent problem with running time series tests instead of A/B tests. There could be factors that affected the results for one period or the other that could invalidate the test.
For example, if you ran a test like this during the past fall of 2008 and the news of our economic meltdown occurred during your test your results could be heavily skewed.
You could run an on/off test like this multiple times. If you get similar results two or three times you’ll be more confident of the results.
Try the test yourself. You may be in for a present surprise.
For More Information –
Part 1: Run Your Brand Phrases In A PPC Campaign. It Will Likely Pay Off. Here’s Why
Improve the conversion rate for non-brand keyword phrases for search marking success
eVision – Pay Per Click Experts
eVision has been in business since 1998. We’ve been helping clients around the world build their businesses with PPC campaigns since they were first available. Most have experienced double, triple, or more in sales increases from their websites.
“eVision has steadily increased the number of our subscription signups while reducing the cost per acquisition. Search marketing has become an important and growing advertising channel for us.”
Victoria Mead
Direct Marketing Manager
INTERNATIONAL HERALD TRIBUNE www.iht.com
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