Why Track Conversions?
The simple answer is that not tracking conversions can put you in the poorhouse. But let's expand on that.
Suppose you have a campaign running with 100 or so keywords. You were smart and targeted keywords without crazy competition, so you're paying an average of $0.10 per click for the traffic you're getting. Assume you get 300 clicks per day. That's a total cost of $30 per day.
Not so bad, right? Well, it depends on your conversion. Suppose you sell one affiliate product per day from that traffic, and it pays you $20 in commissions. Do the math. Yep, you're losing $10 per day. That's roughly $300 per month.
A natural reaction of most AdWords advertisers is to ramp up the spending to try to get more sales. Okay, assume you start paying $0.25 per click, and you get 600 clicks per day. Your spending goes up to $60 per day. That'll do the trick, right? Not if you aren't converting!
If you don't sell any additional affiliate products at all with those extra clicks, now you're losing $1,200 per month ($60 PPC cost per day, less your $20 commission per day, multiplied by 30).
That's bad business.
The only way to keep yourself from flushing money down the toilet like that is to track how your campaigns are performing. That means tracking your costs, for sure, but it also means tracking your conversion rate, both for the campaign as a whole and for each individual keyword. That keyword conversion tracking can make or break the success of your campaign.
The most common reasons people lose money with AdWords are these:
- Bidding too much for keywords
- Not tracking their conversion rate
If you track right from the start, you'll be able to refine your campaigns and get them to profitable levels fast. That will give you the profit you're looking for.