One of the key things you can do and should do to increase your Google Ads efficiency is test a lot. No brainer, right? However, a poorly executed test can lead you astray. And there is a lot written about it.
But there is another thing that is equally dangerous. If not more. It’s looking at the wrong metrics. And the reason it is so is that you think the test was successful since the metrics show that. So let’s take a look at what could go wrong here.
This is going to be short, but very important.
The Test
I’m currently running a test, and this particular test prompted me to write about it, since I had a discussion with the owner. I’m testing a new landing page, which I can’t show you, but this will not make any difference to our topic.
So here are the initial results:
As you can see, the new landing page (treatment) has fewer conversions, and the cost per conversion is higher. So it might seem that the new landing page is not that good. If you have a good eye and have done this, you would say that this is way too early. And you would be right. The results are not statistically significant, and as I said, the test is still running. But it’s not about that.
Let me add more metrics here:
When we look at what really matters – value, we see a different picture. Even though other metrics are lower, including a conversion rate, the new landing page generates more value. And that’s basically revenue. And it’s a good chunk of it.
Of course, things might change as we gather more data. But let’s imagine for a second that this is a conclusive test. If you had looked only at conversions, conversion rate, and cost per conversion, you would have made a wrong decision. And that would have cost you additional revenue.
Look at what matters most
And that’s money. Your goal is not to improve conversion rate, it’s to increase revenue. And I see this mistake way too often. People focus on the wrong metrics, like conversion rate or cost per conversion.
You might argue with me, saying that the conversion rate is important as well. And it is, to some extent. Conversion rate can be misleading.
Say you want to increase the conversion rate and don’t look at other metrics. What might happen is that you will start attracting and optimising for people who convert easily. But for e-commerce, this might be people who buy cheaper products. So your conversion rate increases, but your revenue drops.
Same thing for leads. A bit harder, since you don’t see the exact value, as most sales might happen offline, but even if you optimize for a better conversion rate at some point, you have to make sure that your new landing page that won the test brings similar quality users.
Look at profit (if possible)
If you are able to measure profit in your tests, do that. If you’re sending profit to the Google Ads account, it should be easy. If not, try to tag both of your test versions and dig in deeper into your back-end analytics to understand if there is an impact on profit.
It won’t always be possible, but remember just one thing: “always follow the money”. No matter how tempting it is to present tests with good conversion rates, it’s not about that.
It’s about generating more revenue (or profit). If you present that to your company or client, it’s going to be easy to increase budgets (and your salary).
Blogging gives me a chance to share my extensive experience with Google Ads. I hope you will find my posts useful. I try to write once a week, and you’re welcome to join my newsletter. Or we can connect on LinkedIn.
