What are your advertising goals? What is your return on investment? How much are you willing to pay per conversion? All of these questions seem pretty straightforward; however you might be surprised how many advertisers can’t answer them.

Defining your goals should be a priority in any form of advertising: online or offline. While traditional advertising has always had more barriers to tracking performance, online advertising offers ways to evaluate performance that some businesses might not be using.
 
Define what your conversion points are. Do you want your site visitors to sign up for a newsletter, become a member, or make a purchase? Next, decide how much you are willing to pay for that conversion.  You may have many conversion points on your site and each one may be worth more or less than others.

What do you want to track? With the transparency of online advertising, you have the ability to track just about any metric you want. You can track how much revenue was brought in by a particular search engine, such as Google or Yahoo. You can even determine which keywords are generating conversions.

Once your goals are clearly defined, you can then begin to determine how effective your advertising is. Are you making a profit? What is your return on investment?

Investopedia defines ROI as “a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments”. You can easily calculate your ROI by using the following formula.

For example, if you earned $18,000 from your Google paid campaigns and you spent $4,000, your return on investment would be 350%.

If you are able to determine if your goals are being met, you can easily begin to optimize the performance of your efforts. If you are not seeing a return, you can also determine what efforts you should not continue or work to improve.

If concentrated visibility in front of a segmented demographic is one of your PPC goals, Demographic Exclusion is the vehicle that can help get you there.  Age and gender segment exclusions are just one of the tactics that the top search engines are providing advertisers with to help refine their PPC campaigns.  Options for targeting vary by engine.  Check out Katherine Bennett’s recent post for more on the details.

Google has been rolling out similar features at a higher rate since their acquisition of DoubleClick was solidified.  With more demographic data available form a higher volume of publishers, Google is able to offer smaller advertisers (budget-wise) the opportunity to target their core demographic with a minimal cost of entry.  While higher budgets will get you more visibility, it is possible to be effective with modest budgets as well.

Demographic exclusions can be implemented quickly and easily, from a technical perspective.  However, it is important to know your audience and even to have solid evidence to support your exclusion choices prior to implementation.  Have you profiled your customer base?  Reviewed demographics for the websites you are advertising on? Be sure to do your due diligence before testing.

To adjust your demographic settings in AdWords, select the campaign (available for content only at this time) and click “Edit Campaign Settings”.  On the Edit Campaign Settings Page, Demographics are located within the Networks and Bidding section.  In the example below, we have excluded all known users up through age 34.

After two weeks, we saw Click through Rate increase by 175%. See below for a comparison as shown in AdWords Account Snapshot report.

Although ads within this campaign received fewer impressions, we have eliminated known unqualified users from clicking our ads.  From here, we can refine our Click through Rates even further by segmenting into gender-based ad copy.  One option is to set up a duplicate campaign, each targeting either Male or Female users.  Ad copy should reflect the audience being targeted.  For example, an ad targeted toward Males for Mother’s Day gifts could be:

Browse Thoughtful Gifts
Get Your Wife What She Really
Wants For Mother’s Day This Year!
www.ClientSite.com/MothersDay

A Similar approach should be taken with display ads.  Use male-themed images to attract your male audience and female-themed images to attract your female audience. 

If you have not checked it out already, I highly recommend taking Demographic Exclusions for a test drive.

It’s no secret that effective ads and landing pages are crucial to the success of your search engine marketing efforts. Perhaps you’ve already created compelling copy relevant to your keywords, achieved top positions on the search results pages, and optimized the design and usability of your landing pages. All of this may have increased your site’s traffic and conversions, but do you still want more? Try offering an incentive.

Appealing incentives are proven to persuade searchers to not only click on your ads but also convert once they arrive at your landing page. Depending on the nature of your business, you can offer a free white paper or book, discount, web special, complementary product or accessory, gift, or free shipping to boost conversions. According to an article in Practical eCommerce, 84% of online shoppers surveyed during last year’s holiday season said they were most influenced by free shipping offers, while 77% cited sales and specials as their strongest motivators.

However, when it comes to determining the ideal incentive for your site, it’s best to test. Remember that while an incentive is a value-add for your customers, it’s also an incremental cost to you. That’s why it’s important to consider how it affects your bottom line. A recent study in Marketing Experiments Journal confirms that conversion rate alone cannot indicate which incentive has the most positive impact on net profit. Instead, the journal recommends using Return-On-Incentive, or ROIc, to measure this. Simply stated, the ROIc is the net cost of the incentive subtracted from its net profit. For instance, a free shipping offer might result in more conversions, but a free gift might be a better incentive because it yields a higher ROIc. Check out the study to learn more about calculating ROIc and using it to test two or more incentives.

Are you utilizing incentives to your advantage today?