Wouldn’t it be great if Google would add just a bit extra to your AdWords account every time you topped it up? A little bonus every month could help you sharpen up your campaigns and possibly even give you the edge over competitors. Maybe a little extra would let you test new campaign ideas that you might otherwise struggle to justify.
Well, the good news is I’m going to share a way to do just that. The bad news is that I’m going to talk a little about conversion rates first. (No reading ahead… I’ll be watching!)
The Painful Truth About Conversion Rates
Website visitors can be an ungrateful lot sometimes. You might have spent hours crafting a near perfect AdWords ad — 25, 35, 35 characters — digital marketing’s answer to the Haiku. An advert so perfect that every targeted viewer feels compelled to click. Despite all this, the painful truth is the vast majority of those who do click will spend your PPC budget, and then disappear forever.
Imagine if Google Paid You for Every Non-Converting Visitor
If your website has a 2 percent conversion rate, then the fact is you have 49 non-paying visitors for every one that pays. If you could earn just a little from every one of those then that would be revenue you could put to good use. Unfortunately non-converting visitors, by definition, won’t give you money (and I promised Google would pay).
The answer of course is advertising. Using display advertising on your website gives you a means to monetize every visit, not just the converting ones. The figures will be small per user, but when you start considering every visit to have revenue potential the numbers soon add up.
The Bit Where I Explain I Am Not Mad
This is the part where most online marketers think I have lost my marbles and prepare to hit the back button. Showing ads on a “money site” is seen by many as one of the great taboos in online business. We all think it is one of those things you just don’t do and that the end result is falling conversion rates. But, are we right to think that?
Question: Do Ads on Sites Really Lose You Sales?
Let’s tackle the big question head-on. Many of us would gladly accept some advertising money, but not if it were going to cost us valuable sales. Evidence seems to be mounting that customers are a lot less bothered by advertising than many website owners believe. A Nielson study in 2013 explored this question by introducing sponsored links into established online stores, and measuring the impact on conversion rates. The surprising truth was that third party onsite advertising had no significant impact on conversion rates.
But why is this even a “surprising truth”? We see ads on major, conversion-focused, websites daily. In the U.S., eight of the top 10 e-commerce websites use some form of on-site monetization (such as display ads, sponsored links or a marketplace for external sellers). Sites like Amazon.com, Walmart, Target and Disney wouldn’t be showing adverts if it cost them more than they were making from them, or if they upset their customers.
The truth is, we're all used to seeing ads almost everywhere. Their existence isn’t so jarring they put us off, and a well-run ad set-up will ensure ads that might impact conversion (such as a timely offer from a competitor) will never appear.
Question: Would Ads Lose YOU Sales?
Display ads might work for big players, but would they work for you? In truth, the revenues are likely to be a lot smaller, but the principal still works across sites of all sizes. However, you need to be sure it will work for you, which is, luckily, easy to test.
It’s a very simple process to setup a split test to measure both the revenue potential of introducing display ads and any impact it might have on customer loyalty. Simply serve ads to a sample of your audience and segment those users in your analytics package.
In Google Analytics we like to use custom variables to do this. This makes it very easy to compare metrics such as goal conversions, customer value, bounce rate and loyalty for your monetized segment vs. the wider user base. If you decide to stick with monetization through ad display then this same set-up will help you tune performance to find the balance of ad revenue to a user experience that it right for you.
Now that Google is Giving You Money… Give it Straight Back
Assuming for a minute you use Google AdSense or DoubleClick Ad Exchange for your display ads, Google will soon start making payments for the inventory. Free money! Great, but here is why I think you should give it back.
I started this article talking about getting a bonus in your AdWords account, not about making extra revenue. Online marketers invest in AdWords in order to get a return: They multiply that investment. Setting aside your display ad earnings as part of the marketing budget lets you turn that revenue back into new high-value customers, and increase your return.
An extra few thousand dollars a month might look great on the bottom line, but it would look even better if you can turn that into more new customers.