MindValley Labs Internet Marketing Blog

In a perfect advertising world, each AdWords test iteration has a clearly defined winner, meaning one of your ads not only attracts more attention (clicks), but also better propels relationships (higher conversion).

Sadly, we haven’t transcended into that glorious world as we’re still stuck here where defining a winner can be a bit… muddled.

Take a look at these recent results:

Here, the comparison ad is far superior at attracting clicks, yet isn’t quite up to par on converting those visitors. So the question arises, "Which is better, increased volume with less conversion or less volume with higher conversion?"

The answer depends on the profit margin of your product. If you’re working on a tight margin, then you want to focus on efficient ads; those converting the best - so you get the most bang per advertising buck.

However, if you have a unit profit margin that is a bit on the high side, you might be more interested in higher traffic attraction. You can afford paying for more traffic because your profit margin per item is so big.

This analysis requires specific cost, profit, and traffic data which we won’t get into here. Just be aware that these ad comparisons occasionally requires some detailed analysis to choose the winner.

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About the Author

Prior to MindValley Media, Mike was the Head of New Ventures Strategy at eBay where he conceived of the strategies that led to the investment in Craigslist, the launch of Kijiji.com and the acquisition of Skype. Mike has an MBA from Stanford and previously worked for the Boston Consulting Group. He is also a certified Google AdWords Professional.

Check out other posts by Mike Reining

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