Bounce rates can be disturbing, so can be the cost per acquisitions. It is common knowledge that lower these rates much better it is. But how much is too high remains undefined. The problem is that numbers can be misleading.
In this post, we are going to show you the importance of analyzing the bounce rate and cost per acquisition. Maximizing ROI requires both these to be monitored closely. So, let’s start.
All of you routinely review your marketing performance reports that track various metrics including Bounce Rate and Cost per Acquisition. While the bounce rate measures the effectiveness of campaigns in recruiting visitors to a site, Cost per Acquisition (CPA) measures the effectiveness of a website in successfully leading them to the site’s goal. The reason why we are emphasizing these two metrics in this article is because of how they impact the ROI of CPC spends.
Even a small increase in the bounce rate or CPA can adversely impact the channel’s ROI. Our experience shows that there is a strong correlation between Bounce Rate and CPA. Typically, the CPA is high for traffic segments that also have a high Bounce Rate. This is another reason for you to closely watch these two metrics.
Focusing optimization efforts on controlling just one of these metrics will not be enough. Maximizing ROI requires both these metrics to be monitored regularly and controlled effectively.
The objective of online marketing is not just to bring in traffic but rather to bring in traffic that will stay on the site, engage with the content, and eventually convert. The higher the bounce rate the lesser the engagement of visitors with the site. So when you find that the bounce rates are creeping up, what can you do? Start by looking at the Landing Pages and their bounce rates.
Use a descending weighted sort of bounce rate to identify the top landing pages that need immediate attention. The exact number of pages identified for optimization (top-10, top-5, etc.) would depend on the number of landing pages you have published. Assuming that the page loads quickly and without errors on all devices, it is time to investigate why these pages are not retaining customers.
Possible reasons include page content that is out of sync with the advertisement that visitors clicked and ineffective call-to-actions. Often looking at additional website analytics reports will give us a clearer picture of the possible cause. In some cases, the reasons may not be evident, and this is an opportunity for marketers to conduct simple split tests using tools such as Google Analytics Content Experiments to identify what works. As a best practice, we recommend that tests be conducted to choose the most effective landing page designs. Tests can also be used to identify the best call-to-action.
While we are taking steps to improve our landing page performance we should also work in parallel to fine-tune the campaign strategy. Quick wins can be got by identifying segments that bounce at a higher rate compared to the campaign average. Review the Adwords reports for these segments to identify what can be changed to reduce the bounces. Adwords offers several flexible bid strategies such as ‘maximize clicks’ and ‘enhanced cost-per-click’ that can be used to bring in relevant traffic.
Discontinue bidding on keywords that are sending high bounce traffic and reuse the budget for keywords that are resulting in conversions. Ensuring that you are using your CPC budget to target the right segments is a critical success factor. Spending enough time to researching keywords is important to ensure we are not bidding on terms that will generate traffic that will bounce.
We must constantly work on improving the ads themselves. Just like the case of landing pages, testing ads is very important. Adwords Campaign Experiments (ACE) is a tool that allows you to set up tests to evaluate the impact of changes to the ads. The tool can also be used to test the impact of bidding for new keywords, setting higher bid amounts, and different placements.
Conversion is one of the major goals of any website and it happens when the user’s need is fulfilled by the website’s purpose. However, all the traffic you have acquired by spending money on CPC campaigns does not complete the journey through the conversion path. The CPA metric is a measure of the money spent on getting a single conversion. When you find your CPAs are not within the benchmarks, then the place to start is by evaluating the CPAs at the campaign level.
Organize the information in the report by sorting the campaigns in descending order by cost. From this list identify those campaigns whose CPAs are higher than the benchmark. Assuming there has been no significant change in the site’s conversion rate, a high CPA is indicative of high costs being incurred by the campaign. All the identified campaigns should be paused until the time corrective actions have been taken.
The next step of analysis should be carried out at the ad group level. Using the same sorting and benchmarking process as earlier identify those ad groups with high CPAs for pausing. Finally, drill down to the keyword level to identify keywords that are contributing to the high CPAs. An analysis of the data using the keywords, ads, and search terms as the primary dimension can unravel many optimization opportunities.
The keywords report can be used to identify keywords contributing to high CPAs. The recommended option, in this case, will be to reduce the maximum bid for these keywords. Similarly, the ad performance report can help you identify the ads that are adversely impacting the CPAs.
You must pause all ads that are 1.5 times higher than your target CPAs. The corrective actions must be prioritized by the number of clicks generated by the keyword or ad. The higher the number of clicks, the greater will be the impact of the corrective action. Use the search terms report to identify those search terms entered by visitors that are not in line with what your business offers. Add these terms to the negative keywords list, thereby reducing the number of clicks that send you traffic that will never convert. Similarly, analysis of the search terms can help in fine-tuning the bidding strategy and identifying new keywords for bidding.
Finally, the reports generated using the dimension tab of the Adwords reporting interface can be used to configure campaigns so that ads are only shown at certain times of the day and to visitors located in specific geographies. Optimization steps based on targeting dayparts and geographies will also reduce the number of undesirable clicks and thereby the CPA.
The steps described above do not work in isolation. Other factors such as an intuitive navigation structure, a checkout path with minimal distractions and relevant offers must be playing their part in the conversion process.
So, have you been keeping an eye on your CPC Landing Page Bounce Rate and Cost per Acquisition? More importantly, have you been taking action on these important metrics and boosting the ROI of your advertising spends. We hope you found the actions listed above relevant and useful for landing page optimization and campaigns. For any support you require, you can reach out to one of the conversion rate optimization consultants at Nabler.Happy Optimizing!