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PPC Optimization: Early Warning

Summary: In Google Adwords, you can use phone call metrics as an early warning system to optimize text ad conversion performance. Avoid scary PPC ad spend using fast-reported phone calls.

When testing new PPC ad copy, you can get an early warning on ad performance with the "phone calls" and "PTR" metrics. Using these metrics can give you an early indication of the performance of a text ad in call only campaigns. We'll explore an actual example of using these metrics to optimize ad text copy.

Phone Calls vs. Conversions

Google Adwords includes call tracking using forwarding numbers for its PPC ads. A phone call is any valid call, either from clicking on a phone number in an ad, or manually dialing the forwarding number from an ad. A conversion is a call from an ad that meets the conversion criteria set in the conversion actions window (See Figure 1).

Figure 1: PPC Conversion Settings

These settings can be found under Tools -> Conversions -> Conversion Actions in Adwords. In our case, the call must last 10 seconds or more and the conversion window is 30 days.

Phone Calls

Phone calls are reported quickly in Google adwords. Along with the PTR they provide an early warning indicator of new ad performance. Ads that generate lots of phone calls have good potential.

Conversions

Conversions take up to 24 hours to be reported by Google. In fast-moving, popular campaigns 24 hours can feel like an eternity. One strategy is to monitor the CPC and phone calls (which are reported fast) and pause campaigns that cost more per click, or don't generate calls. The ads that do generate calls at lower cost have the potential to generate low cost per conversion leads, thus squeezing more calls out of less spend.

Example of Early Warning for PPC Ads

Let's look at an actual example. We tested a new airport car ad for a Michigan Green Car campany (MiGreenCars.com). The ad had good CTR and started generating calls the day it was approved (see Figure 2). Adwords reported 7 clicks, 5 calls and 1 conversion early in the day for the new ad (see Figure 2). Note the high cost per conversion (>$6) and low conversion rate (14.3%). These metrics should improve as some of the calls are counted as conversions later that day or the next day. As 5-1 calls were bound to turn into more conversions, we decided to let the ad continue to run

Figure 2: PPC Early Warning Before = Phone Calls

The next day, we lucked out. All the calls met the conversion criteria and turned into 5 conversions. Note that typically a percentage of phone calls reported turn into conversions. The cost per conversion dropped down to $1.38 per call (lower than the other ads), and the conversion rate increased to 71% (see Figure 3).

Figure 3: PPC Early Warning After = Conversions

Pause Low Performing Ads

The cost per click and phone calls metrics gave us early warning on the performance of this new text ad. After the first click, you should have a good idea of the CPC of a new ad. Ads that have above average CPC can be paused to make way for lower cost ads. Ads that have lower than average CPC yet don't generate calls can be paused to make way for higher performing ads. Ads that generate many calls can be paused till the next day, and Google will fill in the conversions generated by then. You can then enable the ads with higher conversion rates, and lower cost per conversion.

Conclusion

With call only ads, you can use phone calls and the Phone-Through-Rate (PTR) as an early warning system for PPC ad performance. By using CPC and phone calls you can quickly pause high cost low performing ads (saving your client money), and enable low cost higher performing ads. Ultimately, the goal with call only campaigns is to generate more high quality calls at lower cost.