Improving Pay Per Click ROI in 8 Steps

Ian Lurie Jun 6 2007

The most common pay per click error I see is waste: Spending too much on keywords that don’t perform, and too little on those that do. If you’re a novice, and you have limited time to work on your pay per click campaigns, these 8 steps will help you start improving their efficiency:

  1. If you don’t already have one, set up a Google Analytics Account. Don’t be shy. It’s easy.
  2. Figure out what your site’s goal is. Then set up goal tracking in Google Analytics.
  3. Let your pay per click campaign run for a few days.
  4. In Google Analytics, go to Traffic Sources >> Keywords. Select the ‘Goal Conversion’ tab, and select ‘Show: Paid’:Google Analytics: Paid Traffic
  5. Now, open up your pay per click account. View the keyword performance for a relevant ad. I’m using Google Adwords as an example:
    PPC Screenshot
  6. Compare the keyword performance in your pay per click account to the conversion rates in Google Analytics.
  7. If any keywords generated zero conversions, reduce their bids by 50%.
  8. If any keywords have a conversion rate higher than 10%, check their bids. If you can afford it, move ’em up.

Keep an eye on conversions, and repeat as necessary. Follow these steps and your campaign will steadily improve.

If you’re a PPC expert, you’re about to write a nasty comment about the 500 steps I’ve missed, how I’ve arbitrarily assigned 50% and 10% as thresholds, etc. etc. blah blah blah. Relax. These are the absolute basics, for folks doing it themselves. Move along. Nothing to see here…

tags : conversation marketing


  1. I am assuming that this post is written with ‘let’s make money’ campaigns in mind, but what about other types of campaigns, like branding, where you are not as worried about traditional conversions or actions?

  2. ian


    Then I’d look at pageviews or time on site as my metric. Check your keywords – any keyword that delivers fewer than X number of pageviews per visit, or X number of minutes on the site, reduce the bid by 50%.
    On average I use X = 4 pageviews or X = 3 minutes.

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