Changes to Google's SERP and What it Means for Conversion Rate Optimisation (CRO)

07.03.2016

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Any business currently dependent on traffic from Google paid search or thinking about pursuing it, needs to understand the importance of conversions and how they impact marketing budgets.

Having a focused strategy going into PPC (pay-per-click) advertising has never been more important. The Google search engine results page (SERP) has seen the following changes in recent weeks (February 2016): 

  • No more right side ads
  • Addition of a fourth ad in the centre above the organic search results

Google's recent changes mean that real estate above the page fold will have increased competition for positions 1 - 4 and may require a higher bid. This being the case, efficient allocation of your ad spend is critical in the ultimate success or failure of your ad campaign.

You’ll need to consider where you send your traffic (what landing pages) and how well you can convert that traffic into enquiries (or whatever desired conversion action you're aiming for). Inevitably, all roads lead to conversion rate optimisation. 

Conversion Rate Optimisation (CRO)

CRO is the process for increasing the percentage of visitors to a website that convert into customers, or more generally, take any desired action on a website.

The general consensus across businesses in the digital realm is the more traffic the better. However this approach is not feasible over the long run due to limited budgets. It is more costly to acquire a large volume of traffic consistently than it is to make changes for better CRO.

With the power of Google Analytics, businesses can  become better educated around user behaviour on their websites and take action to reap more rewards with less traffic, resulting in greater return on investment of marketing dollars.

Company X and Conversion Rate Optimisation

Take for example, company X who have the current performance metrics for their AdWords campaign:

Average CPC cost-per-click spend: $2 Average profit per converted sale: $200 Campaign conversion rate: 1% Leads required to produce one sales enquiry: 100

Cost per sales enquiry: 100 * 2 = $200

Sales enquiry conversion rate: 33%

Sales enquiries needed for one sale: 3

Ad spend required per sale: $600

Pay per click return on investment $200 - $600 = -$400

Can you spot the issue here? 

As you can see, AdWords doesn't look to be a viable option when it comes to marketing for company X. Unfortunately, for many businesses this is where they fail thinking Adwords doesn't work - because they don't spend the time to understand the tools at their disposal to make it work. The key element to turning the above scenario around lies in CRO. 

To increase company X's conversion rate, a number of onsite variables need to be considered. Company X can focus on the following on page items to increase their conversions:

  • Design: A visually pleasing and functional design with one clearly defined purpose for visitors. 
  • Headline copy with a clear offer.
  • Calls to Action: Multiple calls to action around your page's primary purpose. 
  • Page Content: Copy that sells. 
  • Testimonials that reinforce your selling points.

Now that company X have incorporated the key elements required of a converting landing page, they observe an increase in their conversion from 1% to 4%. 

Let's revisit their key performance metrics to see if a better return on investment was achieved. 

Average cost per click spend: $2

Average profit per converted sale: $200

Campaign conversion rate: 4%

Leads required to produce one sales enquiry: 25

Cost per sales enquiry: 25*2 = $50

Sales enquiry conversion rate: 33%

Sales enquiries needed for one sale: 3

Ad spend required per sale: $150

Pay per click return on investment: $200 - $150 = $50

Company X has turned their negative -$400 return into a positive $50!

The next step

In the previous scenario, Company X was able to increase their returns on marketing spend through an optimised landing page experience. This is not where the story ends. Why settle for a 4% conversion rate? The next piece int he conversion puzzle is to being split testing your "optimised" landing page to see if modifications to the layout and structure can produce a 5,6, or 7% enquiry rate. An ongoing data driven approach to conversion rate optimisation will ensure your business can convert a higher percentage of its leads. 

A simple premise of lead generation is that to produce leads at a higher volume than your competition you must be able to spend more than your competition and still remain profitable. ‚Äč

The final phase

Now that you have a suitable conversion rate and your marketing campaign is profitable the question is what do you do with your competitive advantage? For example if your conversion rate is 4% whereas your competition is only 2% this means you can bid more per click than the competition and still achieve the same cost per lead. The advantage to doing so is you are achieving the number one position in a highly competitive market reducing the likelihood of potential customers clicking on the competitor's ad all with the added bonus of achieving higher volumes of sessions.

Sounds good to me!

 

Nathan
Nathan
Director / Digital Strategist

Nathan leads zimpleweb's B2B sales and Digital Marketing team. Certified in Google Analytics and Google Adwords, Nathan's ability to understand clients needs whilst connecting business objectives and digital outcomes will ensure your business has unmatched decision support in a competitive digital environment.

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