Data is the honey in digital marketing. It takes some time to gather enough data to derive insights from your campaigns and optimize. Further, data helps you to strategize, and often you implement new strategies based on a history of data. In this blog, I’ll take a look at some of the data that has helped me personally with strategizing and optimizing paid search campaigns.
Data should not be a luxury in digital marketing but, unfortunately, sometimes that is the case. The first action step that is an absolute must before you launch any paid search campaign is to integrate Google Ads with Analytics. There are other paid search platforms like Bing but for this blog, we’ll focus only on Google search, which has the largest market share by far. Google Analytics comprises all your site’s data, organic and paid, which can give you vital marketing insights. It’s a robust tool that, among many other things, allows you to create conversion goals and build audiences, especially for remarketing campaigns.
If you don’t want to hire a developer, you need to learn Google Tag Manager for tracking data on your site that will flow into Google Analytics. It’s a free tool and has to be a building block in your digital marketing endeavors. You can read more about the benefits of Google Tag Manager here. Without proper tagging of your site, you’ll be flying blind, and your paid search campaigns will be like throwing darts in a blindfolded manner. Who wants that, right?
So, now that we have your website’s data covered, let’s turn to business data. Unfortunately, many companies don’t leverage the importance of business data with a paid search strategy. One important KPI that business data gives you is your daily new revenue. As the month matures, your daily new revenue accumulates, and at about the mid-point of the month, you can begin to forecast your total monthly revenue.
Why can’t you begin to forecast total monthly revenue at the beginning of the month? Good question. 1) Depending on the business vertical, new daily revenue can be very erratic at the beginning of the month jumping from “slow sales” to “great sales” quickly DoD (day-over-day) and back down to “slow sales” historically since the percentage changes are too erratic. 2) The revenue pattern hasn’t settled yet and you won’t have a moving average for proper forecasting. 3) If you have “tier sales” for your business, they usually take some time to settle and show a pattern later in the month. Here’s an interesting article about PPC forecasting.
I usually start looking at the 5-day average for new daily revenue. Using Excel you can forecast upper-confidence, mid-range, and lower-confidence. If the 5-day average revenue is not plausible since your total MTD (month-to-date) revenue is already above the upper-confidence mark for ex., I begin to look at the 3-day moving average total. I have been quite on mark with a 3-day moving average so far. However, if your daily new revenues have been pretty stable day-to-day, you can forecast without running averages.
What are the benefits of revenue forecasting for PPC campaigns? It really depends on your particular business vertical. It can assist you with PPC budget pacing, seasonality, and targeting for ex. This leads us to ROAS, i.e. Return On Advertising Spend.
Many digital marketers only look at the 30-day mark for ROAS but that is only one part of the story. Obviously, ROAS shows you which campaigns are performing well looking at your 30-day mark, i.e. comparing month-over-month. But leads and conversions can “mature” more at the 60, 90, 120, etc. mark. For example, I have been working quite a bit on Bing for online dating and Bing tends to perform much better at the 60-mark for ROAS. For the online dating vertical, it’s just a slower platform while Google Search, i.e. intent, performs quite well at the 30-day mark. So, if you JUST look at the 30-day mark overall for all platforms (Display, Search, Native, etc.) you might be shocked to only see about a 10% ROAS (Return On Advertising Spend). However, once you start to look at the 60-day mark, you’ll see growth, which could be up to 20% for ex. and then it just improves the further you look back. But, and this is a BIG but, you need access to business data to analyze this growth and leverage the data for paid media optimizations.
This could mean that your business starts to break even, i.e. at 100% ROAS, a few months ahead. Currently, the online dating vertical I’m working on, we’re seeing a 100% ROAS at about the 5-6 month mark. Everything after that is pure profit. Now, the vertical I’m working on has other streams of revenue as well. In short, as a business, it would behoove you to diversify your streams of revenue. Paid media is merely one aspect of revenue but shouldn’t be your only one as your business grows. The above explanation should tell you why and make you put on your thinking hat as a business owner.
If your business has tier sales like different levels of memberships, business data will help tremendously with targeting. If you see some high spending coming from certain campaigns, keywords, etc. you can optimize accordingly and capitalize on this insight. Data doesn’t just stop with Google Analytics. To be a savvy digital marketer, we need access to both and at the end of the day, we want your business to succeed. If you need any help with your digital marketing effort, please contact us here. We can also conduct a free audit for your current paid search campaign(s) and give our two cents.
For now, please stay safe out there and we’re all looking forward to 2020 coming to an end soon. Cheers!
