To put this in perspective, let’s run through a hypothetical situation. Let’s say that you own an electronics store in the town you live in. Whenever someone buys one of your items, you don’t keep track of how much they paid for it. Also, let’s imagine that you don’t keep track of how much you paid for your merchandise from your suppliers, and you also don’t keep records of how much you spent on advertising in the local paper, billboards, radio ads, etc. It would be pretty hard to determine how much money you were making (if you were making money at all!), right?
That’s exactly what’s happening without conversion tracking. Without it, you’ll never know exactly how much you’re spending for a customer to “convert,” whether your conversion event is as simple as an e-commerce sale or as elaborate as a lead submission in a multi-stage purchasing process. Not only can you use this to determine how effective your ads are in generating actual sales, but you can also determine what keywords, ads, or campaigns are eating up your online advertising budget without producing profitable results. This is just the first step in optimizing a PPC account.
Next week, we’ll talk more about a more detailed solution to the problem of conversion tracking: web analytics. For more information on conversion tracking for individual PPC platforms, here are some links: