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In Google Analytics Essential Training, Corey Koberg shows how to use the Google web analytics platform to generate and evaluate information about the visitors to a web site, including data on site traffic, user behavior, and marketing effectiveness. This course covers the out-of-the-box functionality, from account creation to reporting fundamentals, and explains how to glean insights from the vast array of data available.
The AdWords Keyword Position report here under the Traffic Sources tab is one of the most under-utilized but actionable AdWords reports in all of Google Analytics. It's also a fantastic example of how we can use Google Analytics and AdWords integration to gain a distinct advantage over our competition. After all, your ad's position on the page is all relative to the competition's ads on the search results page. Unfortunately, this report is often used incorrectly, which can have disastrous effects in your AdWords campaign. So here we'll show you how to correctly interpret the results. And one of the most critical questions to answer when running an AdWords campaign is, where do I want my ads to appear on the page? As you can see in this mockup of the search results page, our ads can appear over here on the right in the traditional location, inside positions 1 through 8, or above the organic results, in the top positions 1 through 3.
Now, AdWords actually gives you the option of stating a preference on which position you prefer, but how do we know which position we prefer? To answer that question, we'll use this Google Analytics report to examine the performance of each keyword when it appeared in those different locations. And you can see here on the left, keywords in my account that has brought traffic to my site: Google Store, Google Logo, Google Stores plural, et cetera. Now, as I select the keyword, it will be highlighted and the right side will automatically update to show the results for just that keyword.
So I can view how each keyword is performing individually, which is important, since no two keywords will perform the same. Now the default is just to show the number of visits. So in this case when I click on the keyword google store, I can see the number of visits that were generated when the ad appeared in each position. Here you can see that when my ad appeared in the top position on the left, over the natural search results, it generated the most visits: 952 compared with 640, 612, 380, 412, et cetera. Now, if your goal is to drive the most amount of traffic to your site, then you're done.
There's no question that the primo spot for your ad to appear is the number one spot above the natural results. But hold on. Before we close the book on this, remember, this only takes into account visits. Most businesses do not show ads just to get visits; they show ads to generate revenue. Now fortunately, we have a metric that shows just that. I simply change my metric using this dropdown box to show how much revenue was generated when the ad appeared in each position.
Now here you can see a very different story. The top-left position that performed so well before generates only $250, while the third position over on the right generated over 620. So how could it be that we got so many more clicks and visits here, but it added up to significantly less revenue? Well, if you're a veteran AdWords user, you're aware there are plenty of theories out there about why you might see this behavior. For example, there's a tendency for non- discriminating users to get a bit click happy and simply click on the first thing that they see.
But since they're just clicking on the first thing they saw, rather than because your ad had exactly what they needed, they aren't particularly likely to actually buy from you. But over here, it's a different story. Here they've gone through all the different options and settled on your ad buried over here in the middle. So it's highly likely there was something about it that matched their specific needs and therefore the likelihood that they buy after clicking is much greater. So all this brings up another good point: Why do we want to pay for bad traffic? And while revenue has been very insightful, it doesn't tell the entire story either, because it says nothing about our costs.
We're not just looking for total revenue, but profitability. Since this is pay per click, we have to pay for every one of these visits and we want to see how much revenue are we getting back each time we get one of those clicks that we're paying for. We have a metric that tells us exactly that, per visit value. We select this metric and we can see a very different story unfold. While the positions on the right are generating up to $3.63 per click, the top-left position that faired so well in the Visits report generated just $00.67 per click. And this discrepancy is even more disturbing when you consider that this top position often commands a heavy price premium and is much more expensive location in the positions over here on the right that are performing so well.
So as you can see, which position is best can have very different answers, depending on what you see here in your report and what your business goals are. This is a very powerful report, but we need to choose our metrics wisely, so we're not optimizing for the wrong thing.
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