Many marketers spend thousands of dollars on AdWords every month without knowing how much of that spend is directly generating actual leads.
But there is good news. With a few pieces of data, you can quickly determine which keywords and referral sources are truly driving the most leads.
Without further ado, let me show you four quick and easy steps to attributing AdWords campaigns to real-life leads and customers.
Easy AdWords Attribution: A Short Step-by-Step Guide
Step 1: Calculate Lead Value
Do you know what an average lead is worth at your company? Calculate it today, and you can know at a glance if your current AdWords spend is worth the cost.
If you know the average lead is worth $30, an $8 cost per click will be really attractive—especially if you’re bidding on high-intent keywords. On the other hand, you might find that you’re overspending. You don’t want to spend $35 to acquire a lead that’s only worth $30.
Step 2: Determine Cost Per Lead
Once you’ve calculated the value of a lead, it’s time to look at how much you’re actually paying for each one you capture.
Here’s an easy way to look at it:
Let’s say you spent $2,000 on a campaign that resulted in 60 form conversions. The cost per lead would be $2,000/60 = $33 per lead. In another campaign, you spent $1,500 and generated 150 form submissions at $10 per lead.
You spent a total of $3,500 for 210 conversions, which means the overall cost per lead is $16. If the value of a lead at your company is $20, this is good news!
Step 3: Identify Your Cost Per Customer
The real goal of using AdWords for lead generation? To capture conversions and then use the data to persuade prospects to become customers. It’s essential to see how much you’re spending to not only acquire leads but convert them into customers as well.
Calculating customer acquisition costs can get quite complex, but one easy way to identify them is this:
Divide your total AdWords spend by the number of new customers acquired during the same time period. For instance, if your team spent $5,000 in Q1 and closed 100 new customers, your cost per customer is $50.
Step 4: Consider Return on Investment
Paying attention to ROI is the most important step of all! The question every marketer most needs to answer is this:
Is AdWords really worth it?
At a minimum, you want to break even. If you follow steps one through three above, it won’t be long before you’re seeing positive returns—more clicks, more conversions, more customers, and more sales.
So…where can you get these insights?
You can create spreadsheets and customize dashboards to track them all yourself. Or you can use our new PPC Grader. We know how hard it can be for marketers to track ROI on top of everything else you’re responsible for. So we created a tool that calculates the key metrics for you. Click the button below to get started!