The Keyword, the Click-Thru, and the Conversion Rate

MoreVisibility - April 30, 2008

Here at MoreVisibility, we partner with many companies looking for us to manage their Pay per Click (PPC) campaigns. For some clients, they have never used the internet to market their business and rely on us to develop, create, and implement a PPC strategy. For other clients, they realize the scope of their internet marketing is growing and they contract MoreVisibility to manage their PPC programs because they want to focus on their core business practices or feel they need an experienced firm to take their marketing to the next level. For the latter, which have significant PPC experience one mistake many make is identifying their top keywords. A big reason for this misconception is the lack of analytics in their program and their assumption that the keyword with the highest click-thru rate is their best keyword, is often flawed.

Unfortunately, click-thru rate is not a good barometer of a keyword’s performance. Whether you are selling a tangible product online or looking to acquire new leads from your website’s online application, the number of conversions a keyword generates is a more effective indicator than click-thru rate. Many small and medium size businesses running programs in Google, Yahoo, and MSN for example, do not have a way to track conversions (they have no analytics). Without that metric, many make the mistake of assuming their top performing keywords are the ones that generate the most traffic. But what happens if none of those web visitors purchase a product, or fill out an application? You still paid for that traffic, but you didn’t get a return on your investment (ROI). The reality could be the keyword that generates the most traffic to your site is actually your worst performing keyword when it comes to conversions and this could greatly decrease your ROI.

We use Google Analytics at MoreVisibility to track the performance of the campaigns we manage for our clients. With this reporting tool we can see how well a keyword converts with respect to how much traffic it generates. Knowing how much traffic you receive from a keyword and what it costs you to get that traffic is only half the battle. You also need to know if that keyword generates a conversion, and only then can you determine the performance of that keyword.