A Five Minute Task That Is Saving Me $750 A MONTH!
As my regular readers will know, I often share my own online experiences in my articles in the hope that it will help some of you. As my regular readers also know, despite the fact that I have achieved a degree of success with my Internet ventures, I can be pretty lazy when it comes to the more mundane aspects of running an online business. It is usually these ´boring´ tasks that end up saving or making me large sums of money (when I eventually get around to dealing with them!). One day I will learn..... :-)
This week, the incredibly boring job that I want to talk about is ad-tracking. Now please bear with me on this - I know it isn´t the most exciting topic in the world BUT spending (literally) five minutes on this task a month ago is already saving me over $750 a month (that´s $9,000 a year!) and there is every possibility that I could end up saving more than double that amount!
Like many website owners, I use pay-per-click search engines to promote some of my businesses. I am sure you are all familiar with this type of advertising but if not, you basically have your website advertised in the search results of a particular search engine and every time a browser clicks on your advert, you pay the search engine a set fee (anything from 5 cents upwards). The amount you pay is governed by how popular the search keyword that you are listed under is. For example, search terms such as ´hosting´ or ´casinos´ etc are very competitive and could cost you several dollars a click (that is just for someone to visit your site - they don´t have to buy anything!). As you can see, it can get very expensive.
Anyway, back to my story....
One of the most popular search engines to advertise on in the above way is Google, using their Adwords service. Adwords are the paid adverts that show up on the right-hand side of the Google search engine listings. I have been using Google Adwords for years on and off but more recently I have only been using this service to advertise a couple of my main websites. The reason being that these sites have high sales conversion ratios (the number of people that visit the sites and actually buy something) and therefore I can justify the relatively high advertising cost.
Both of these sites were receiving good levels of traffic from Google Adwords and both were making proportionate levels of sales. Of course, the sites also receive traffic from many other sources but I assumed that as Google had always provided me with visitors that bought, that this was still the case. The bottom line was that if my PPC costs were way lower than my sales costs on each day, then I was basically happy :-)
A few months ago, Google introduced a new tool which allows you to track the visitors that they were sending you through your advertising with them. The ad tracking tool is very easy to install and requires you to place a small piece of HTML code on your ´thank-you´ pages (for example, the confirmation of order page that a customer will only see if they have purchased from you). Once installed, Google can track their referrals and see how many of them actually make it to the ´thank-you´ page (ie. and make a purchase). The results are then displayed within your normal Google Adwords stats.
Last month I had a spare five minutes so I installed the ad tracking tool on one of my sites, expecting to find that I was correct in my assumption that a good percentage of these referrals from Google were buying from me. I was initially very surprised to see that over the first few days, hardly any of the referrals were making purchases but I put this down to an ´off-week´ and let the adverts continue to run.
In the end, I tracked this specific ad for a month and the conversion rate from the Adwords referrals was appalling - seriously, I really couldn´t believe it. The site WAS making sales but hardly any of the buyers were coming from the Google paid adverts. The fact was that the sales were covering the cost of the Adwords advertising but I was basically wasting money because this advertising was in no way whatsoever as effective as it had been in the past.
Result?
I stopped that advertising campaign after tracking it for a month and guess what? The level of sales on the site in question has remained constant but I am now saving over $750 a month by not paying for the Adwords advertising.
I am now tracking a second site in the same way and whilst the results so far show that the conversion rate is higher than the first site, it is still not as high as I would have expected so I may well end up ditching this campaign also and that will save me considerably more money each month!
The moral of this story? Well, it´s obvious really but it is absolutely vital that you track your paid advertising to see how effective it really is. You may well be surprised (as I was) and if it saves you a few hundred dollars a month, I can assure you it is a very nice surprise :-)
Copyright 2004 Richard Grady
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