Clicks, Customers, and Conversions
We had an email from a client recently asking about clicks. We built their website, and in the past year they’d been working with a company that took care of advertising for them. This company was promising 125 “clicks” a month if they re-upped for another year. Was this good, our client was wondering? Should they go for it?
Two things stood out for us immediately. The first — and it’s a red flag — was the guarantee. There are two ways you can guarantee a certain amount of traffic to a website. One is to pay people to click through to the website. There are companies that do this. They are not, however, paying those people to become customers, so this is a complete waste of your money and their time.
The second way is to choose a number so low that you can feel completely confident that the number of visits will be higher than the number you offer. 125 clicks a month sounds like it’s in that range.
When we checked, though, we found that this company’s ads were actually delivering about a third of that number of visitors to our client.
The second point that caught our attention was the definition of the terms they were using.
What’s a click?
There’s some special terminology in the realm of internet marketing or SEM. “Impressions” refers to the number of times your ad or link might be shown on the screen. Google uses this term in their SEO section of analytics, telling you how many times they offered your website to a searcher. Ads are often sold by impressions, giving you an average amount of traffic or — in Google’s case — a typical number of searches for a given keyword and the likelihood that your ad would be shown to those people.
Notice the difference here. In the first case, when Google tells you how many times they did show your page, they can give you a definite number of impressions. When they’re predicting, they offer you a range. Since we’re a Google Engage agency, we have a tool that produces those ranges. They look at the searches and consider how many times each month people make those searches and how many companies are competing for placement with the ads. In our example, we’re talking about a narrow local search, so the numbers aren’t enormous. You might have 4,256-5,783 impressions, they’ll say, and you could expect 52-68 clicks.
There’s that word: clicks. Google has a lot of data to work with, so they know that people who have ads shown to them on their screens don’t necessarily always click through. They usually choose organic results rather than ads, for one thing, so the proportion who click on an ad rather than choosing from the organic result is already fairly small. Then people are most likely to choose the top ad on the list, and there can only be one #1 ad on the list, so the proportion dwindles further.
Your goal, however, is not to have large numbers of people clicking on your ad. You pay for each click. You want the right people to click through: the ones who will actually convert and become customers.
Clicks are just people clicking on your ad.
What’s a conversion?
Companies that sell clicks don’t necessarily go on to discuss conversions, but you can define a conversion any way you want in your business — or in Google Analytics. Here are some things that can count as conversions in analytics:
- Buying something (analytics counts this by how many visitors reach the “Thank you for your order” page).
- Taking a step toward buying, by downloading a brochure or sending a request for a sales call.
- Behaving in ways that you know are associated with buying something, such as staying on your site for a certain length of time or visiting certain pages.
As you can see, people can convert without becoming customers. If you know that 1% of the people who click through will set up an appointment with you and 67% of those people will actually buy, then a year of 125-clicks-a-month would mean one new customer. Whatever it costs you to get those 125 clicks a month for a year is the cost of one new customer gained by using those ads.
If you have a great landing page and 10% of people who click through to it will make an appointment, and you still sell to 67% of those people, you could have 8 new customers each month. Clearly, the cost per customer is much lower if you have this kind of conversion rate.
Is the price right?
If you don’t know how many of those clicks convert into customers, then you have no idea whether 125 clicks a month will bring you any additional income at all.