Can Google Adwords’ Cost/Lead Metric Ruin Your Business?

I was recently asked to review an existing campaign. The manager I was working with was looking at Cost/Conversion information based on country.

The 1st thing I told her was not to base any decisions based on this information. Why not? Because there was no information on the quality of the leads. You can have a country with a great cost/lead and no sales. What good is that?

Cost/Conversion Metrics Can Cause You to Make the Wrong Business Decisions

Connecting Adwords or Google Analytics to your sales information or CRM can sometimes be a challenge and take time. But that is no excuse not to do a basic analysis. You can probably easily find information on sales/country from your sales department. Even better is to get the revenue information. Take that information and cross reference it to your cost/lead.

With this information you have an important metric: Cost vs. Revenue or ROI. Now you can make intelligent business decisions. For example:

  • Countries which have a high cost/lead but few sales must be optimized. If there is not much left to optimize then you may want to discontinue the campaign or lower bids significantly
  • A country which has many sales and a high ROI should be tested by increasing bids or adding more keywords

Next time you look at your cost/lead metrics remember to look at cost vs. revenue before making what could be the wrong decision.

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