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How do you measure and improve your SEM performance and ROI?

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Search engine marketing (SEM) is a powerful way to reach your target audience and drive conversions. But how do you know if your SEM campaigns are effective and profitable? How do you optimize your SEM strategy to achieve your goals and maximize your return on investment (ROI)? In this article, we will cover some of the key aspects of measuring and improving your SEM performance and ROI, including:

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Amalia Fowler

I save my clients money with Google Ads audits and strategy calls.
David Z.

Performance Marketing & CRO Expert | Generating Profitable Growth at Scale

1 Setting SMART goals

Before you launch any SEM campaign, you need to define what you want to achieve and how you will measure your success. A good way to do this is to use the SMART framework, which stands for Specific, Measurable, Achievable, Relevant, and Time-bound. For example, a SMART goal for your SEM campaign could be: Increase online sales by 20% in the next quarter by targeting high-intent keywords and optimizing landing pages.

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David Z.

Performance Marketing & CRO Expert | Generating Profitable Growth at Scale
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Generally speaking, you’ll have an easier time setting channel or team specific goals by starting with the highest level goal and working your way backwards. Start with understanding your company’s OKRs or main objective(s), set department-wide marketing goals that are aligned with company objectives and then define team/channel specific goals relative to marketing objectives. This will make it easier to develop strategies, minimize overlap between channels / teams and allow for realistic data-driven targets based on historic channel benchmarks.

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2 Tracking key metrics

Once you have your SMART goals, you need to track the key metrics that indicate how well your SEM campaigns are performing. Click-through rate (CTR) is the percentage of users who click on your ad after seeing it on the search results page, while cost per click (CPC) is the average amount you pay for each click. Conversion rate (CVR) is the percentage of users who complete a desired action after clicking on your ad, such as making a purchase, signing up, or filling out a form. Cost per acquisition (CPA) is the average amount you pay for each conversion from your ad and return on ad spend (ROAS) is the ratio of revenue generated from your ad to the amount spent on it. By tracking these metrics, you can evaluate the effectiveness and efficiency of your SEM campaigns and identify areas for improvement.

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Amalia Fowler

I save my clients money with Google Ads audits and strategy calls.
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Before tracking the key metrics you have to ensure you have conversion tracking properly set up in the account. You can't track what you aren't measuring.

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3 Testing and optimizing your ads

Testing and optimizing your ads is one of the best ways to improve your SEM performance and ROI. You can compare different versions of your ads to see which ones perform better, and make changes based on the testing results and other factors, such as keyword research, audience insights, and competitors' strategies. Elements you can test and optimize include headlines (the main text that captures the attention of users), descriptions (additional text that provides more information and encourages clicks), extensions (extra features that enhance your ad), bids (the amount you are willing to pay for each click), and targeting (criteria you use to select who sees your ad). Regularly testing and optimizing your ads can increase CTR, CVR, ROAS, while lowering CPC and CPA.

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David Z.

Performance Marketing & CRO Expert | Generating Profitable Growth at Scale
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“Experiments” are a useful feature to test changes based on the parameters and duration you define. You have the flexibility of pausing, resuming or ending the test at any time you choose during the experiment. Once it’s been setup and launched, you’ll have visibility on performance with real time measurements showing you the percentage difference between the control and the test for selected duration of time. It will also alert you once enough relevant data has been gathered to determine the winner in your test. “Ad Variations” experiments test a single change in the ad (A/B test). Useful for testing a different headline, description, path, url etc. “Custom Experiments” allow you to test any change in your campaign. Worth trying out.

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Amalia Fowler

I save my clients money with Google Ads audits and strategy calls.
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Wait for a significant volume of impressions and clicks before testing, otherwise you risk making decisions off of what are actually random results. An understanding of statistics (or use of a tool like Optmyzr) is an important part of testing.

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4 Analyzing and reporting your results

The final step in measuring and improving your SEM performance and ROI is to analyze and report your results. Using tools such as Google Analytics and Google Ads, you can collect and interpret the data from your SEM campaigns. It's important to present and communicate the data in a clear and concise way to stakeholders, such as clients, managers, or team members. Analyzing and reporting your results can benefit you by allowing you to monitor your progress, identify the strengths and weaknesses of your SEM campaigns, demonstrate the value of your efforts, and optimize your strategy. All of these steps can help you increase your ROI.

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5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you measure and improve your SEM performance and ROI?

1

2

3

4

5

1 Setting SMART goals

2 Tracking key metrics

3 Testing and optimizing your ads

4 Analyzing and reporting your results

5 Here’s what else to consider

Search Engine Marketing (SEM)

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How do you measure and improve your SEM performance and ROI?

1

2

3

4

5

1 Setting SMART goals

2 Tracking key metrics

3 Testing and optimizing your ads

4 Analyzing and reporting your results

5 Here’s what else to consider

Search Engine Marketing (SEM)

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