Touch Bistro.

Why fewer conversions is better.

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 problem.

Touch Bistro Funnel

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.

Touch Bistro Analysis

But not all conversions are created equal. Downloading a whitepaper does not directly generate revenue whereas requesting a quote does. Making optimization decisions based on an aggregate cost per conversion metric then is not the most efficient. It also does not provide the highest return for the client.

The (temporary) solution.

We disassociated top-of-funnel conversions from the conversion column. These conversions do not contribute directly to revenue and are considered “softer” conversions.

Touch Bistro Solution

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.

The results.

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.

Best practices.

This is not the ideal solution.

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.

Touch Bistro Strategy