Wait a second. That sounds completely counter-intuitive to the conversion-base tactic of paid search. Why would you want to invest money in ads for fewer conversions?
A key assumption here is that we want to use paid search to generate a return for the client, defining return as revenue directly generated by paid search.
The funnel segments your audience into how likely they are to convert and become a paying customer. These audience segments interact differently with the website content, and conversions should be used to measure their activity and interactions.
When importing these conversions to your platforms, they are often set to the default setting: to aggregate the conversions into the “Conversion” column.
We disassociated top-of-funnel conversions from the conversion column. These conversions do not contribute directly to revenue and are considered “softer” conversions.
The data for top-of-funnel conversions was not lost. The “Conversions” metric only has bottom-of-funnel conversions that contribute directly to revenue, while “All conversions” counts both top and bottom of funnel conversions. Moving forward, we use cost/all conversion to make decisions for top-of-funnel campaigns and cost/conversion for bottom-of-funnel campaigns.
Campaign performance improved8.37%
Within one week of implementing this change, we saw improvements of 8.37% in cost per all conversions, with the aim to push this performance increase to double digits.
The best practice is to calculate the lifetime value of a customer at every stage of the funnel and assign these values to the conversions. The optimization decisions would then be made based on cost per conversion value, which is basically the ROI for each campaign, ad group, ad, or keyword.