by John Eberhard

Google AdWords offers a tool in their interface that is vital in properly managing a pay-per-click advertising campaign, called the “conversion code.” Here’s how it works.

First of all, most often when you have a Google AdWords campaign, the goal is lead generation. In other words, you are trying to get people to come to your site and then fill out a form asking for more information or to receive a free offer or something like that, so you can contact them and sell them your product or service.

So your text ad on Google AdWords will link through to a page on your site that has a form for people to fill out. They fill out the form, click submit, and then the information gets emailed to you, and the system then sends the person to a page that says “Thank you for filling out our form” or something like that, imaginatively called the “thank you page.”

So from inside the Google interface, you can set up the conversion code. This is a piece of HTML code that you can put on the thank you page. It is invisible to the viewer, but it sends a message back to Google that someone has filled out the form. And it only does this for someone who has come from a Google AdWords ad, because it tracks each one of those people with a cookie.

So now, with the conversion code, you can see in the Google interface, when you go to look at the statistics of your campaign, exactly where you’re getting people to fill out the form. This is called a conversion. Now there’s a wealth of information you can see which you couldn’t see without the conversion code:

1. You can see what percentage of people who are clicking on the text ad and coming to your site, are actually turning into conversions. This is called your conversion rate or conversion ratio. I’ve read that the national standard or industry standard for a conversion ratio is 3%, but this varies widely.

2. You can see the cost per conversion. This is the total amount of money you’re spending on a Google campaign, divided by the number of conversions. This is your cost per lead.

3. If you have multiple campaigns, each one geared to a different topic, or a different product or service that you offer, or geared to a separate group of keywords, you can now see which campaign or campaigns are converting. And you can see the conversion ratio and the cost per lead for each.

4. Google allows you to set up multiple text ads and have them running simultaneously on one campaign. This is often called an A-B test, which I described in one of my previous articles. With the conversion code you can see which ads are getting conversions, and what their conversion ratio and cost per lead is. This allows you to see which ad is really getting results, and often one of your ads will do much better than the rest.

5. You can see which keywords people are clicking through on, and also which keywords are resulting in conversions. This is helpful because you might want to increase the bids on those keywords to move your ads to the top.

6. Google shows your ads when people enter your keywords in the regular Google page, but they also show your ads on sites that choose to show Google ads, where the topic of the site is related to your keyword. This is called the “content network.” So if your keyword is “golf equipment,” your text ad could appear on sites that have chosen to display Google ads that are related to golf. You’ve probably seen this, where a site has a rectangular block over to the right, or on top or on the bottom of a page. It will say “Ads sponsored by Google” or something like that. So Google’s management interface shows you the results of the “content network” as separate from the “search network.” And with the conversion code, you can see how the content network is doing in terms of the conversion ratio and the cost per conversion.  

This is really important because oftentimes the content network will not get conversions at nearly the same rate as the regular search network. Sometimes it does, but often it doesn’t. So that means if you don’t have the conversion code up there, you won’t know that and you’ll be spending lots of money for no product. When I see the content network getting lots of clickthroughs but no conversions over a period of two or more weeks (it’s hard to judge this just from one week) I will usually turn the content network off completely or lower the bid level to much lower than the search network. That way I’m not wasting money there and my dollars go to more productive parts of the campaign.

All this helps and helps you to achieve a low cost per lead, which is one of the goals of a lead generation campaign.

So in summary, the conversion code is a vital tool for managing a Google AdWords campaign. When I start managing pay-per-click for a new client, this is one of the first things I will set up for that client if they don’t already have it.