Sunday, June 28, 2009

Forget Clicks... Start With Bounce Rate When Evaluating Your Online Advertising

When it comes to online advertising, Google and other "paid search" providers have us convinced that it's all about "clicks." How many clicks did your paid search program generate? Which ads generated the most clicks? What are you paying per click? You get the idea!

But wait a minute... just because someone clicked on your ad doesn't mean they'll buy your product or even give you a call. Far from it! As a matter of fact, many website visitors that result from your advertising efforts will never buy from you. Why? Because they leave your site within seconds of arriving (i.e., they bounce), which means they have no interest at all. So forget clicks... you need to first understand bounce rate when evaluating your online advertising performance.

Why is bounce rate more important than clicks? Because bounce rate is a good proxy for how many unqualified website visitors you're paying for. As a matter of fact, these visitors are so unqualified they don't even stick around long enough to find out what you're selling... let alone buy from you. But you're still paying for every click that sends them your way.

Here's some quick math to put it in costly perspective:

Let's assume you spend $1,000 with Google to send 1,000 visitors to your website. Let's also say that 60% of these visitors leave within ten seconds of arriving so your bounce rate is 60%. This means you paid Google $600 (60% of $1,000) for clicks so unqualified they barely lasted seconds on your site!

Now it's time for the obvious question: do you know the bounce rate of your advertising campaigns? It's easy to find out if you have web analytics set up for your site. Just look at your web analytics' dashboard and start paying attention to your "bounce rate" stats. And if you're not using web analytics then now's the time to start!

With that in mind, here are some guidelines for improving your bounce rate:
  • Track ad campaigns separately. Make sure you're evaluating the bounce rate for each ad campaign. That way you can quickly get your arms around which campaigns have the highest bounce rate (i.e., most unqualified visitors) and the lowest (i.e., most qualified visitors).
  • Stop poor performing ads. That new text ad may be generating a ton of clicks but what's the point if your bounce rate is 98%? This example may seem extreme but once you start focusing on bounce rate you'll see that (unfortunately) it's not. Simple solution: stop running ad campaigns with high bounce rates... or at least, rethink what you're doing.
  • Send visitors to custom landing pages. Maybe your homepage isn't the best place to send visitors once they've clicked on your ad banner. If you're running a promotional offer, you should instead send them to a "landing page" that's been customized for that offer. Who knows... you might discover that more of your clickers are qualified prospects after all.
  • Test, test, and test some more. As every good marketer knows, it's all about testing and optimizing. Now that you're focusing on bounce rate you should do the same! Test different types of ads, placements, keywords, landing pages... you name it. You'll soon find a good balance between what you're paying per click and lower bounce rates.
All sounds great right? But I bet you're still wondering what benchmark percentages to use to determine good vs. bad bounce rates. Ask the experts and they'll be quick to say, "It depends." But I never find that very helpful so I'll go out on a limb and offer a simple benchmark. Shoot for an average bounce rate of under 50% for your online advertising efforts.

Just keep in mind that we're talking about your ad campaigns. Bounce rates from visitors that type in your URL directly or that come from natural search should be much lower... but don't be surprised as they'll bounce too!

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