Channel Contribution 101: You want your paid search account to drive value and make money. You want to use your paid search account to help reach new customers and grow your business. Unfortunately, it’s not as simple as whipping up a campaign, throwing in some keywords, and then watching the revenue come flooding in. You need a strategic plan that allows you to get your business to where you want it to be.
A good strategic plan will map out your campaign and ad group structure so you can apply the right assets (keywords, ads, etc.) that target the right audience. As a result, you’ll be able to achieve your goals in the most efficient ways possible.
So, how do we do this?
Using the Marketing Funnel in PPC
In order to create a strategic plan which will allow you to be successful, we need to understand your audience in terms of where they are in their journey to conversion. The marketing funnel can help us visualize this journey from awareness to action.
The top of the funnel represents an audience unaware of your business and the bottom of the funnel represents an audience who has converted and become a customer or a client. Hence, a high funnel audience is less likely to convert than a mid or low funnel audience. This is important to understand as you’ll need to use different campaigns for different audiences, each with assets tailored to move a given user further along in their own journey through the funnel.
Think about it: how often do you go from being completely unaware of a given company or product to being ready to buy in one step? Not very often, right?
You usually need a bit more information before taking that action. So, if you’re targeting mid funnel audiences with a given paid search campaign, does it make sense to use content focused on, say, the price and a call to action of “buy now”? Maybe not. Perhaps you should utilize content which informs this audience further, moving them along from being aware they have a problem (mid funnel) to aware that you are their solution (low funnel).
Your strategic plan needs to be in lock-step with this kind of funnel, or user journey. Let’s take a look at each part of the funnel in detail to see what campaign types and strategies you need to take advantage of and optimize for.
High Funnel PPC
User’s Location in the Funnel: Awareness
A high funnel user is either unaware or just becoming aware of your business and isn’t necessarily interested in your offering(s). This audience likely isn’t searching for anything relevant to your business.
Campaign Type: Display
A vast majority of the time, a high funnel user needs an initial point of contact outside of search to go from being unaware of your business to aware. This audience is usually acquired through banner ad or video ad display campaigns (non-remarketing).
Focus: On-Site Usage Metrics
This audience is highly unlikely to convert right away. If your account’s average cost per acquisition (avg. CPA) is $50, you should expect to see an avg. CPA 20 or 30 times higher for these campaigns specifically. You want this audience to engage with the content on your website so they become interested in what you have to offer.
High Funnel Key Performance Indicators
Because these audiences likely won’t convert by their nature, you should rely on on-site usage/engagement metrics to determine the success of these campaigns:
- Bounce Rate
- Avg. Session Duration
- Pages per Session
Remember, the goal of these campaigns is to move a high funnel user down the funnel to become a mid funnel user.
Mid Funnel PPC
User’s Location in the Funnel: Interest
A mid funnel audience is aware of your business and is becoming more interested in your offer(s). These users may be actively searching for related topics to learn more and see what offers your competitors have.
Campaign Type: Non-Branded Search (Including Shopping), Soft Remarketing
This audience is typically acquired through non-branded search queries – terms that indicate this audience is problem-aware and/or solution-aware. They also tend to convert well with soft remarketing campaigns which offer additional content to assist them down the funnel instead of a hard sell.
Focus: New User Conversion Metrics, Assisted Conversion Metrics
These audiences do convert but do so typically at lower rates than the account or site average. These campaigns can best be judged by new user conversion metrics; these more accurately reflect a mid funnel audience. Furthermore, since these campaigns are designed to get a mid funnel user to return to your site later and convert as a low funnel user, assisted conversion metrics will be among the most important KPIs at this stage.
Mid Funnel Key Performance Indicators
- New User Conversion Volume
- New User Conversion Rate
- New User Avg. CPA
- New User ROAS (if e-commerce)
- Assisted Conversion Volume
- Assisted Conversion : Last-Click Conversion Ratio
Low Funnel PPC
Users’ Location in the Funnel: Desire
A low funnel audience is well aware of your business, possibly searching for it specifically, and is ready to make a purchase. These users are ready for the hard sell.
Campaign Type: Branded Search (Including Shopping), Hard Remarketing
This audience is typically acquired through branded search queries – terms that indicate this audience is looking for a specific brand and ready to convert. Likewise, they may convert well from a remarketing ad which is offering them the specific product or service they’ve become familiar with through your preceding marketing efforts.
Focus: Returning User Conversion Metrics
This audience will convert at higher rates than any other type of user. Focus on returning user conversion metrics, particularly on a last click model, to measure the success of these campaigns.
Low Funnel Key Performance Indicators
- Returning User Conversion Volume
- Returning User Conversion Rate
- Returning User Avg. CPA
- Returning User ROAS (if e-commerce)
Develop Your Account Strategy
Now that you know which campaign types correspond with which audience types, you’re ready to begin developing a robust and sophisticated strategic plan which will set you up for success.
Remember where we started, “Channel Contribution 101.” Taking the time to build out a strategic account plan will naturally cause you to create accounts and campaigns that hit the big goal: moving any given user to the next step of the marketing funnel. From structure to creative, knowing where your audiences are in the funnel and what to show them next will lead to planning campaigns with appropriate assets, messaging, and context.
Commit to building out this plan before you start advertising. It will pay huge dividends in the long run. Your end result after executing this plan will be better conversion rates and more revenue than you could otherwise hope to achieve from paid search.