Marketing

5 metrics that can maximize your paid search return on investment

Know what you need before you hire someone to handle your marketing needs

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Over the past few years, real estate professionals have seen rapid changes in marketing methods. The emphasis on print media, such as fliers, business cards and newspaper ads, are now shifting to digital channels including social media, SEO and paid search advertising.

The digital marketing realm changes exponentially each year, which can overwhelm many businesses as they struggle to keep up. The medium of paid search has demonstrated that it can be more efficient than traditional forms of advertising when targeting a selected audience.

The older methods of TV and radio are like a shotgun, and search engine marketing is akin to an extremely accurate sniper rifle. Like anything else, this rifle needs to be used properly to be effective.

Below are five metrics that you need to be aware of when evaluating paid search campaigns. Of all the marketing methods I have tried over the past 10 years, paid search has been the most effective way of getting me in front of my target audience.

1. The AdWords auction process and quality score

When a user types in a search query, Google runs an auction process to determine which ads will show and in what position. Each ad is given a quality score that is determined by relevance to the query, landing page experience and expected click-thru rate.

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The more relevant your ad is to the search query, and the better your landing page is, the better your ad will rank with the lowest cost per click possible.

2. Impression share

This is the numberĀ of times your ad shows up, also known as an impression, divided by the estimated number of impressions you were eligible to receive. So, if your ad went through the auction process 100 times and your ad showed up 50 times, your impression share would equal 50 percent. I strive to keep my impression share around 70 percent on my search campaigns.

3. Click-thru rate

Click-thru rate (CTR) is measured by the number of clicks your ad received divided by the number of times your ad is shown. This is very similar to a response rate that is calculated when using direct mail.

The average CTR varies by industry. I use very specific keywords in my campaigns that target sellers in the later stages of their path to purchase. My CTR averages between 2 and 5 percent.

Matt Umbro of PPC Hero said a CTR of 2 percent is good as a general rule of thumb. However, you should always look for ways to improve this number.

4. Average ad position

Once the auction is complete, each ad is assigned a position on the search engine results page (SERP). Ad position is determined by the quality score of the ad multiplied by the maximum bid. Ads in the top three positions get a higher click-thru rate.

Ad position is now more relevant than ever due to the increased amount of search traffic coming from mobile devices. Ads that show on the side panel of the SERP are invisible to contemporary smartphones.

The Google AdWords Dashboard will report the average ad position for your ad group. This site is something you’ll want to monitor regularly, and you’ll also want to strive for an average ad position of three or less.

5. Quality score

Quality score is defined as an estimate of the quality of the ad itself, relevance of keywords used and landing page experience. A higher-quality score is a great way to lower your cost per click and increase your ad position. This is Google’s way of rewarding relevant content.

The AdWords dashboard will report your quality score for each keyword that corresponds to your ad. A score of 6 out of 10 is considered good, but you should strive to get that number as close to 10 as possible.

How landing pages can help

One of the ways Google bases an ad score is on the landing page in which it links. The landing page needs to be relevant to both the ad and the search query performed by the user. A major mistake many businesses make is creating one general landing page for multiple ads.

Doing so will decrease your quality score and your ad rank. This will cause your bid to stay in a relevant position to increase and eat into your overall budget. Create a landing page unique to the ad and the search query you are targeting.

Once you identify your target audience, a well-managed paid search campaign can vastly increase the quality of your leads. Google AdWords is an accurate and precise instrument that has to be finely tuned. The fine-tuning is an ongoing process, and it’s never perfect.

Mike Otranto has been an active real estate investor in the Raleigh, North Carolina, area since 2005. Visit Mike’s Web page or catch him on Twitter.

Email Mike Otranto.