With SSL, you can search and browse in full confidence, knowing that your personal information and browsing habits will never find its way to unscrupulous third-parties. When you click on a Google link, and visit an external site, because your browsing is encrypted, the site you visit will not be able to see that you came from Google – nor will they be able to see what you searched for. Advertisers therefore can’t use your personal information to provide you with ads for things you don’t need or want.

Sounds great, doesn’t it? And the more secure we can make the web, the better, right?

Not exactly.

It is only once we consider the implications for the web businesses that we realise the sheer importance of such analytical data. It is only when this data is threatened to be taken away, that we realise that SSL encryption might not be in the public’s best interests.

Let’s see why.

The Importance of Analytics

Analytics is not all bad. Okay – it does let businesses collect information about your browsing habits, your search words, your referring URLs, your city and your number of return visits, which you could argue is more information than you would like to hand over.

But we need to realise that such anonymous information is central to the efficient allocation of online resources. It is only because we freely hand over such information to website owners, that websites are as user-friendly – and online prices are as low – as they are today. None of this would have been possible if web businesses were blindfolded.

Analytics provides a market – an invisible hand which allows resources to flow to the areas which deliver the best return. It prevents wastage, and helps to efficiently connect buyers to sellers.

To illustrate how the data you hand over is the lifeblood of such a healthy online economy, let’s imagine a world where SSL is standard across the whole internet. Every page is encrypted, and none of your data is handed over.

Scenario 1 – No Keyword Data (SSL)

Suppose in this SSL world, a retailer of men’s and women’s gifts wants to know how his online marketing campaigns are working. He logs in to Google Analytics, and all he sees is a visit counter (2,500 visits), and perhaps some information on total sales (20) and total revenue ($10,000). He can’t see where these 20 sales came from; nor can he see which keywords generated those sales.

But he does know that 20 sales are coming from somewhere, so at least some of his online marketing efforts are working. And since he’s only spent $1,000 on his entire online marketing strategy, and is therefore making a healthy $9,000 gross profit, he keeps everything rolling along and heads out to lunch with his head held high.

Similarly, another gift retailer adopts a similar online marketing strategy. She generates exactly the same amount of visitors (2,500), sales (20) and revenue ($10,000), for exactly the same spend. Again, her gross profit is $9,000.

All good and well, you might think. But what could have been if keyword data was handed over to retailer 1 and retailer 2?

Scenario 2 – Keyword Data

While working his way through a delicious Penne al Forno, retailer 1 hears talk that it is now possible to see keywords in analytics. In his excitement, he cuts his lunch short and hurries back to his computer to log into analytics. Immediately, he can see that half of his visits came from “gifts for men”, and half came from “gifts for women”. No surprises there – after all, retailer 1 sells gifts for both men and women.

But look at the conversion rates for each keyword! For whatever reason, the keyword “gifts for men” is delivering the majority of his sales, revenue and profit. “Gifts for women” is somehow failing miserably.

It doesn’t take long before retailer 2 also hears word of the great news. In her similar excitement, she also logs into analytics to find that the keyword “gifts for women” is bringing in the majority of her sales.

Scenario 3 – After Optimisation

Retailer 1 then decides to take money out of his poor-performing “gifts for women” keyword, and invest it in the successful “gifts for men” keyword. Within a week, he has increased his his overall sales from 20 to 32, and his gross profit from $9,000 to $14,000, all for the same $1,000 spend.

Retailer 2 also decides to do some similar optimisation. She takes money out of the wasteful “gifts for men” keywords, and ploughs it into “gifts for women”. Her sales increase from 20 to 26, and her gross profit increases from $9,000 to $12,000. Again, all for the same $1,000 spend.

Efficient Allocation of Resources

Retailers 1 and 2 don’t know it, but what they’ve done is extremely clever. Their individual actions (and the individual actions of thousands of other retailers) have helped allocate marketing spend to the most efficient channels. Both have seen a significant reduction in wastage, and large increases in profit.

Assuming the gift industry is competitive (which is largely true due to the sheer number of ecommerce retailers), these increased profits will gradually filter through to customers in the form of lower prices.

This ‘invisible hand’, or free market of online marketing, is only made possible with analytical data. Without years of such analytical efficiency, helping to connect buyers and sellers as quickly and cheaply as possible, there is no way online prices would be as low as they are today. There is no way I would have been able to buy a pack of six iPhone screen protectors with free delivery from Hong Kong for only $0.99.

Is Privacy Overrated?

Of course, everyone has the right to protect their privacy. Measures such as SSL will prevent third-parties from seeing your search terms, analysing your browsing behaviour and perusing your social media habits without your consent. And Google’s new SSL page is undoubtedly a response to our increasing desire to keep our online activities private.

But so long as measures are taken to ensure the information you hand over is anonymous and not personally identifiable, should we really demand this increased privacy? If letting advertisers build a database of anonymous stats is all it takes to improve the online experiences and ultimately lead to lower prices for consumers, is handing over anonymous data really such a bad thing? Perhaps we have forgotten what analytics and measurement has done for us, and need to realise that data collection and optimisation is actually in the best interests for everyone.

Alan Mitchell is an experienced Google AdWords consultant helping businesses in Australia increase their return on investment from PPC marketing. For more information on how a strategic approach to PPC can benefit your business, get in touch today for a free consultation.

Sometimes, if conversion data is scarce, click-through-rate (CTR) is instead used to evaluate a keyword’s performance. If a keyword generates only 5 clicks from 1,000 impressions, it has a CTR of 0.5% so is deemed irrelevant. The keyword is then paused or relegated to the second page of search result obscurity.

This is not the right approach.

Beyond the Click

There is more to paid search management than optimising keywords based only on conversion rates and click-through-rates. A more intelligent approach also considers what happens once a user clicks on your ad:

• How many pages are they viewing?
• How long are they spending on your site?
• How many people are immediately bouncing?
• How many people are returning at a later date?

If a keyword has a poor conversion rate and a poor click through rate, but people are viewing a large number of pages, spending a long time on your site and returning regularly, the keyword may be doing a great job at creating awareness of your products or services. Even though conversion rate may be low, the keyword may not deserve to be paused or have its bid reduced – instead it may be beneficial to increase its bid to allow the keyword to flourish and user engagement to increase.

Similarly, if a keyword is converting well but 80% of people are immediately bouncing, finding out why – perhaps by looking at search queries being matched to the keyword – could help the keyword convert even better.

How to Optimise a Campaign Intelligently

Analytics software, such as Google Analytics, are incredibly useful in helping to understand what people do after they click on your ad and land on your site. If your Google Analytics account is linked to your Google AdWords account, it is possible to see page views, time on site and bounce rate for each of your AdWords campaigns, ad groups and keywords (select Traffic Sources > AdWords > AdWords Campaigns).

Once you’ve logged into Google Analytics, look at each of your campaigns:

• Which campaigns are engaging users with a high time spent on site? Why?
• Which campaigns are bringing in untargeted users who immediately bounce back and go elsewhere? Why?
• Which campaigns are persuading users to come back later? Why?

Next, drill down to ad group level and keywords level (if you have enough data) and ask yourself the same questions. 100 visits is usually significant to make reliable, informed decisions – but be careful about drawing conclusions for keywords / ad groups with less than 30 visits.

Make a note of those campaigns, ad groups and keywords which stand out, both positively and negatively. Look for common words that regularly appear in unusually high or unusually low metrics, such as ‘cheap’, ‘discount’ and ‘free’. How have they performed? Probably very different to your more generic keywords, you would imagine, but in what way?

Look for locations, product names and other qualifiers – can you notice any trends? Are there certain keywords with a high bounce rate? Could any negatives be added to reduce bounce rate?

Record any trends and resulting changes in a log. This is your insight on user engagement, and will not only help you develop a improved paid search campaign which will better connect with users, but will also help you better understand your audience and make more informed, strategic business decisions.

How to Optimise a Campaign Even More Intelligently

If you’re feeling more ambitious, export the keyword data to Excel and VLOOKUP each keyword’s Analytics performance to its AdWords performance (select Traffic Sources  > AdWords > AdWords Campaigns > “dimension” = “keywords” > export > CSV for Excel).

That way, when you’re looking at each keyword’s costs, CTR, conversions and ROI, you can also consider page views, time on site, returning visits and bounce rate, and better understand each keyword’s impact on creating awareness and interest.

Look at keyword 8 in the example below. It has a low conversion rate and a high cost per conversion, so based on conversion performance it should perhaps be paused. But notice how page views, time on site and bounce rate are all exceptionally good. Should the keyword really really be paused? It seems to be engaging users well, so why not instead find out why its conversion is so low?

Similarly, keyword 9 is converting well, but if it’s bounce rate could be reduced, it could become even more profitable. Play around with new ideas and experiment optimising bids based on different metrics.

It’s All About Engagement

The next time you optimise your campaign, remember there’s more to paid search management than conversions. If, like the majority of Americans, you’ve ever researched your next holiday, browsed that DVD player or shortlisted those birthday presents on your lunch break at work, only to buy online when you get home (on a different IP address), you will appreciate that keyword conversion data can only get you so far.

Conversion optimisation is naturally biased towards converting keywords, so will tend to ignore keywords at earlier stages of the buying cycle, which may play an essential role in creating awareness, generating interest and engaging users with your products, services and brand.

Conversion data – and automated tools which optimise keywords based on conversion data – are not the be all and end all of paid search management. Understanding user engagement could well be, and the tools to get you started are right at your fingertips.

Alan Mitchell is an experienced Google AdWords consultant helping businesses in Australia increase their return on investment from PPC marketing. For more information on how an analytical approach to PPC marketing can benefit your business, get in touch today for a free consultation.