Why Bounce Rate Is Bologna!

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Robert | Friday, July 30th, 2010

Filed under: Basic, Intermediate, PPC Tips & Advice

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What’s a good bounce rate?:
As it relates to pay per click search engine marketing (PPC SEM), if you’re wondering what a good bounce rate should be, or if you’re concerned that your bounce rate is too high, then you’re paying too much attention to the wrong metric.

Why Is Bounce Rate The Wrong PPC Metric To Monitor:
First, bounce rates vary wildly from website to website. So there’s no such thing as a “good” or a “bad” bounce rate. Secondly, bounce rate is a reflection of the number of people who visited your website and then left within a short period of time. From a PPC point of view, that data is better reflected in several other more important monitoring metrics.

What PPC Metrics Are Important To Monitor?:
Although there are many metrics that you can and should delve deeply into when trying to optimize a an account, a campaigns or an ad groups, there are only three metrics you need to keep an eye on to determine if you account, campaigns and ad groups are operating efficiently.

The first important metric to monitor is total number of conversions during a set period of time. Conversions will vary from day to day, sometimes wildly, so don’t pay too much attention to that, but the total number of conversions each month should be increasing. If not, you need to understand why and fix whatever is preventing continued growth.

The second important metric to monitor is the average cost of acquisition (COA). Every company should have a different average COA target depending on the company’s customer lifetime value (CLV). Please see a previous blog titled “Can You Generate A Positive ROI With Adwords?”.

Once you understand your CLV you can back into your target average COA. The target average COA should be a range. Some campaigns may generate an average COA below the target, and some may generate an average COA above the target. But the aggregation of all campaigns should lead to an average COA that fall within a reasonably narrow band. If any single campaign exceeds the boundaries of that band to a point the aggregate or overall average COA, it’s time to dig deeper into discreet metrics to find the offending ad group(s), placement(s), keyword(s), and/or ad copy and take the appropriate action against what I call “the offenders”.

The third important metric to monitor is conversion rate. Like the other two previously mentioned metrics the numbers will vary from campaign to campaign and from day to day, but in general each campaign will have a conversion rate signature. If that conversion rate signature drops unexpectedly for more than a few days, you should look at the change history report in Adwords and retrace the changes that were made right around the time of the decline.

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Finding The Change History Feature In Adwords:
Below are two snapshots. One depicts where you can find the Change History feature in Adwords. The other depicts what the Change History screen looks like.

Google Change History Location

Google Change History Presentation

By The Way, You Must Do This Religiously:
While we’re talking about change history, it is an absolute essential that you develop the discipline to keep a log (electronic or via paper and pencil) about every single change you make, when you made it, what the stats were before you made the change, and why you made the change. If you develop this discipline I guarantee that one day (probably many days) you will make a change intended to improve performance, and instead it will crater performance. The change history report alone will not get you out of that serious situation. However, if you can compare the notes you made when you made the changes, and compare that to the data in the Change History report, then everything will become crystal clear and you’ll know exactly where the problem lies.

Closing Comments:
So why again is bounce rate bologna? The three PPC SEM monitoring metrics that are mentioned in this blog are meaningful, important, and they embody bounce rate as well as many other discreet metrics. Use discreet metrics to determine how to improve account performance once you identify that account performance needs improvement, but don’t use discreet metrics as a monitoring tool. If you spend too much time in discreet metrics, you’ll go crazy, you’ll miss the bigger picture and you won’t see the forest through the trees.

As always, if you have questions or comments about anything in this blog please let me know through the comment section below, or send a Twitter comment to @MySEMexpert. And please feel free to contact me if you would like a free consultation about your PPC SEM efforts. Good luck in your endeavors.

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