The Ladder of Improvement: A Simple Technique that Can Dramatically Improve Your AdWords Campaigns

Have you ever felt like you’re just trying random tactics, hoping that your AdWords campaigns get better? You can easily find articles with actionable tips that will help you make optimizations, but you also need to think about how you measure them.

You should be able to know what caused an increase in conversion rates. It shouldn’t just happen by accident.

This is why we need a systematic approach for our optimization efforts.

adwords techniques

How a Systematic Approach Can Help

One of the biggest benefits of using a systematic approach is the clarity that we can get from our optimization efforts. We can start to better understand how even small changes, e.g. titles on our ads, affect our results (conversions, sales, etc.). Our tactics and improvements then become reproducible.

Reproducibility is a concept from science that just means that  “an entire experiment or study [can] be duplicated, either by the same researcher or by someone else working independently”. Scientists don’t just hope their experiments work. They need to be able to know why they worked.

ladder of improvement strategy

Being able to reproduce your experiments also means understanding all the factors that could have caused your results. One of the ways to do this is by simply reducing the total number of factors. Changing your ad title, ad description and the landing page at the same time will make it harder to know which of these three changes actually helped.

To help us do this, we can look at a simple technique called the Ladder of Improvement.

Using the Ladder of Improvement in Your AdWords campaigns

The Ladder of Improvement is a technique that comes from the book I Will Teach You To Be Rich by Ramit Sethi. In it, he talks about the “Ladder of Personal Finance” which provides people with steps, or “rungs,” to get their finances in control. The rungs go like this:

  1. Rung 1: Set up a 401(k) with your employer
  2. Rung 2: Pay off credit card and any other debt.
  3. Rung 3: Open up a Roth IRA.
  4. And so on.

This technique gives you two benefits:

  • It helps you prioritize where to spend your energy and money
  • It helps you achieve small wins at each rung

Even if you only get through the first 3 rungs, you’ve still made significant progress towards improving your finances!

Our Ladder of Improvement in AdWords will look similar, in that you move through a progressive series of small steps to optimize your AdWords campaigns. We can start by breaking it down into three core metrics:

  1. Impressions
  2. Click-through rate (CTR)
  3. Landing page conversion rate

First, let’s enter our current values (last week, last month, etc.) for each metric and industry-specific averages for metrics like CTR and landing page conversion rate. WordStream has a great guide on what these averages look like for different industries.

industry metrics in adwords

At any given moment, we could be working to improve any of these metrics. However, some of these metrics are more important than others. For example, you can increase the impressions your ads get but if your CTR is low, you’re wasting all this traffic (and lowering your Quality Score).

How do you decide what metric to focus on then? We can compare our numbers against industry averages. If your CTR or landing page conversion rate is below industry averages, this is your first priority.

Once you know what metric to prioritize, you can now try different tactics to improve it. While it can be tempting to improve all three metrics at once, you will have much better results if you tackle each one at a time.

How to Improve Impressions Metrics

Low impressions may be a sign that your keyword bids are too low. You may need to adjust your geotargeting settings or improve ad quality. Get more tips on improving your impression share here.

impression share in adwords

How to Improve CTR

Low CTR is generally a sign that your ads aren’t reading as relevant to searchers. This could be a keyword problem (overly broad keyword targeting, not using keywords in your ad copy).

click through rate averages

But to really get great click-through rates, you need to write emotional ads that stand out, and take advantage of every CTR-boosting feature that Google makes available to you. You’ll find more tips here:

How to Improve Conversion Rate

A low conversion rate is often a sign that your offer just isn’t resonating. To radically improve your conversion rates, you often need an entirely different offer – something irresistible to your audience.

You’ll find more tips on improving conversion rate here:

How do you know when you should stop optimizing a specific metric? For this, we can look at “good enough” numbers.

When Are Metrics “Good Enough”?

This idea of “good enough” metrics has been talked about by Michael Halbrook, a consultant for Adobe. He talks about his experience in theater and “good enough” setups:

When I studied and practiced technical theater—lighting, sound, and set design, which was my trade before I got into digital media and marketing, and then measurement—there was a common phrase in the scene shop: “Close enough for theater!” That mantra referred to the fact that on a 40- to 50-foot or wider stage, regardless of the design, you could often be a half inch or an inch off in construction and still be okay when everything fit together on stage for the final production.

Getting your numbers to hit industry averages is a great initial goal. Perhaps you could do even better than just the average. This is fine but always have a goal in mind that is “good enough” for you. Otherwise, you can spend too much time chasing minor improvements while you could be working on major improvements somewhere else.

The Ladder of Improvement is just a simple technique that you could consider using. The point is to have something that helps you do two things:

  • Prioritize where to spend your energy and money
  • Know when your metrics are “good enough”

About the Author

Ruben Ugarte is the founder of Practico Analytics where he helps companies make better decisions using data. You can read more actionable guides by visiting the Practico Analytics Blog.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: