Use Google Analytics to Optimize Advertising Spend

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When you think of Google Analytics, what do you think of?

You might think of website metrics, like visits and users. You might think of website usability – bounce rates and time on site. You might even think of goal tracking – transactions and revenue.

Google Analytics does all of that, and more. Which is why it is such a great tool for marketers at companies large and small.

However, most marketers don’t think of Google Analytics as a tool to help you optimize your advertising spend. But it can do that too.

How to Optimize Your Ad Spend with Google Analytics

First, did you know that you can import cost data into your Google Analytics account? You can link your Google Ads account so that all of that data gets pulled in automatically, and then use this article to learn how to add all your other ad spend.

Once you have cost data included in Google Analytics, you can use various ‘Acquisition’ reports to dig into the performance of all your advertising channels. From paid social campaigns like Facebook and Instagram ads, to search ads on Google and Bing, to email marketing and display – you can learn more about how visitors behave on your site when they come through one of these paid channels.

You can see the number of sessions, and calculate the cost for every new visitor to your site. You can see where they go on your site, and how long they stick around. And you can see transactions, including conversion rate, revenue, and cost per transaction. In that way, you can even calculate your return on ad spend (ROAS) for each campaign – that is, how much money is this campaign delivering in revenue for every dollar you spend in advertising.

At this point, you will have a better idea which channels are working and which are not. And you can optimize your budget to spend more in those that are working, and press pause on the campaigns that are not.

But that’s not all.

Take things one step further and learn how to improve performance within each individual campaign with audiences and segments. You can identify specific behaviors in each of these visitor groups (based on the traffic source or campaign) that will help you create better onsite experiences.

Looking at landing pages, bounce rates, conversion funnels, and ecommerce data, you can collect vast amounts of data points to help you better understand how people are interacting with your site. Find the gaps, and work on improving the overall conversion process – whether its for that single campaign or all of the above.

This conversion rate optimization work – that springs from observing traffic patterns and user behavior in Google Analytics – will help you optimize your advertising efforts even further, by improving the ROAS across the board. If you get more conversions for each dollar spent, your ROAS goes up. That means greater marketing contributions and a happy boss.

To Get the Most Out of Google Analytics, First Understand What It’s Telling You

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Arguably the single best free tool available to marketers is Google Analytics. If you know how to use it, it can tell you so much about your customers, how they are using your website, what they’re interested in, and what is causing them issues.

However, no tool is perfect. And no tool can do everything you need it to. Even something as impactful as Google Analytics must come with a few words of warning.

To get the most out of the tool, you have to first understand what it is telling you. And with a tool as powerful as Google Analytics, the biggest fear is in assuming everyone will read the data in the same way.

One Statistic, Multiple Interpretations

Let’s look at an example:

Your team is reviewing the most popular conversion paths on your website and you find that people landing on one specific page are returning to the previous page at a high rate. This is something that Google Analytics can show you quite clearly. You can see the click paths, and so you know where they are coming from and where they are going next.

It’s obvious, in this case, that there is a problem worth correcting. Something about that page is not working.

One member of the team raises his or her hand and says, “I see what’s going on here. They are clicking on a button expecting one thing and they are seeing something else. We need to more clearly explain what they will see if they click that button.”

Someone else than counters, “No, no, no. That’s not it. It’s the page they are landing on. It’s ugly and it turns people off. We need to redesign it.”

Still a third person, who can barely wait to speak, announces, “what are you talking about? It’s clear that if they’re not finding what they’re looking for, we need to give it to them. The content of this page is the problem.”

In that example, who is right? How do you know?

Inferring the Why

Google Analytics is great at telling you WHAT is happening. It’s not as good at telling you WHY.

And in the example above, each team members is inferring the WHY based on the WHAT. They may all be right, to some degree. But they may all be wrong as well. What we know for certain is that the Google Analytics data alone does not lead to any of those conclusions. Each person is taking the data presented to them, and applying their own subjective interpretation to determine what is going on.

How to Resolve the Conflict

Data, by itself, does not solve problems. It helps people make more informed decisions.

For marketers charged with improving the online experience for a company’s customers, we need both data and opinion. We need people to develop theories based on the data so that we can design new solutions and test them.

The danger is in mistaking opinion for fact. In the example above, it is a fact that people are landing on the page and then going back to where they came from. The three conclusions drawn are opinions, each worthy of exploring in more depth.

To resolve the conflict, and improve your website, you need to go further than Google Analytics. At this point in the process, after the basic theories have been established, we need to figure out how to proceed.

Do you conduct experiments with live subjects? Do you assemble a focus group? Conduct a survey? Take votes? Or simply go with the person’s gut who is in charge at the moment?

All of these are viable options. And as long as your team agrees on the facts, the opinions can and should vary. That’s what makes a healthy team, people bringing a variety of experiences and skills to the table to find a solution to problems.

What Google Analytics Doesn’t Tell You

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Google Analytics is an incredible tool for all of the different bits of wisdom it provides to marketers. But the one thing it cannot tell you is critical, lest you view your web analytics as the end all be all of the data you need to make decisions.

What Is Google Analytics Good For?

Google Analytics, indeed any web analytics platform, is an excellent source of quantitative data. It can tell you who is visiting your site, what pages they are most interested in, where they are getting lost, and more. Navigation patterns, traffic sources, and conversion data is all crucial to optimizing your user experience and your marketing strategy.

But quantitative data is just one kind of data we need.

What Is Google Analytics Bad At?

While Google Analytics can tell you what is happening and how it is happening, it cannot begin to explain why something is happening. That is qualitative data, and it is just as important to understand how to improve your website, thereby improving the customer journey.

To get the answer to the “why” question, you need to go beyond Google Analytics.

Sources of Qualitative Data

Once you have used Google Analytics to examine where your users are having trouble, you will want to know why. You can look at the pages that they exit from with the smartest minds in your company, and each one of them will come up with a reason that answers the “why” question.

This is where most companies stop, deciding to listen to the person in the room with the most authority and design solutions that solve their chosen “why”. But your company is smarter than that. So what do you do to go further?

  1. Surveys – whether you are surveying users as they move through your site or sending them a follow up email, surveys allow you to ask questions about their behavior that go beyond analytics. You can ask them why they chose to visit the site, what they were looking for, and why they did or did not end up completing a purchase.

  2. Focus Groups – getting a bunch of your customers/users in a room together and asking them questions about why they shop with you, and what they like or dislike about the experience of using your website, is a great way to get ideas about how to improve from the very mouths of your user base.

  3. Interviews – one on one conversations with different customers combine the best of surveys and focus groups, giving folks a prominent voice and asking them to explain their behavior in depth.

When Does A/B Testing Come In?

A/B testing is another way to generate great quantitative data, after incorporating solutions derived from the qualitative sources above. You can get very close to defining why your users are behaving in a certain way, because you asked them. Then you took those answers back to your designers, developers, and product teams, and they created new experiences meant to solve any and all issues that people are having on your website.

That is where A/B testing comes in. You apply their changes and test them against the current website, to see if the applied solutions end up improving activity on the website.

You can do this on the live website, with all of your users as a test group, or in a more controlled-way, observing how individual users interact with the different versions of your site and asking them for feedback directly.

Use Google Analytics to Learn Who Your Customers Are

There are a lot of ways companies can learn more about their customers. Surveys, sign up forms, interviews, focus groups and social media listening are some. But most companies overlook a great tool at their disposal, that just happens to be free and non-intrusive – Google Analytics.

Google Analytics can tell you all kinds of things about who is visiting your website, who is buying from you, who is reading your content, and more. Things you can use to better target your advertising, craft more appropriate messaging, design better experiences, etc. Things like…

  • Age ranges
  • Gender
  • Geographic location – city, state, country
  • Technology use – device, browser, operating system
  • Interests (Affinity Categories) – these are users that Google has determined are interested in purchasing goods or viewing content in specific categories, from food to books to technology and more
  • Interests (In-market Categories) – these are users that Google has identified as actively shopping for specific goods or services

The more you know about your customers, the better you can serve them. Not only that, but you’ll be better armed with the information you need to go out and recruit more of them. Data is a marketer’s best friend. So use what you have.

Most Underrated Web Metrics

The problem with data used to be that we didn’t have enough of it. The problem with data today is that there is just way too much of it.

Of course if you know what you’re looking for, you can get it. And everything else will fall aside.

But if you don’t know what you’re looking for, you will likely fall into the familiar trap of spending too much time on things that don’t matter. Last week, we looked at the most overrated web metrics.

Today I’d like to reverse that. Let’s have a look at those metrics that are underappreciated and underused, but very useful for many businesses to measure and improve:

  1. Page Value – Google Analytics allows you to set up your ecommerce metrics, so that when someone checks out on your website, you know how much they spent. Even if they aren’t checking out, you can assign a value to any action they might take, like submitting a lead form, etc. Then you can measure how each page on your site impacts those actions and sales. Pages with the highest value contribute the most to results and pages at the lower end might not be helping you as much as you hope.
     
  2. Conversion Rate by Device – while you should be measuring everything by device, conversion rate gets right to the important stuff. Assuming you are tracking sales and other actions, you should always pay attention to the relative likelihood of conversion on different devices. As more of your traffic comes from mobile, are you putting your design and development resources in the right place?
     
  3. Attribution – I’ll grant you that this is not a metric but a category of metrics, but since Google Analytics gives you the tools you need to figure this out, I feel okay including it on this list. For marketers, this is perhaps one of the most important things to know. What traffic sources and activities add value and which do not? A full attribution analysis will tell you the path that most often leads to a successful conversion. It will rank the things you do by their relative impact on results.

Remember, now that we have access to boat loads of data doesn’t mean we’re any better off than we were before. Only those marketers or companies that pay attention to the right metrics will come out ahead.