Analytics and AdWords tips - Part 3 of 4

Once again we've asked the Google Analytics team to share some of their tips on how to use Analytics and AdWords together.  Last week we talked about how to link your two accounts and view your results.  To recap, the three steps you need to take are:

1) Link your AdWords and Analytics accounts (how-to video)

2) Configure goals (Help Center article)

3) Assign a value to your goals

This week we'll show you how to use Analytics reports to find your true return on investment (ROI) and identify poor performing keywords.

Which keywords lose money?

As we mentioned last time, the report for tracking keyword ROI is the AdWords Campaigns report in the Traffic Sources section. To identify the keywords that are losing you money, click the ROI column header twice so that the lowest ROI keywords are at the top of the list. Do you have any -100% ROI keywords? These are keywords on which you lost all of the money you spent (you paid for clicks on those keywords but no one completed actions on your site). But before you take any action in your AdWords account, consider how much you spent and whether you have enough data yet to make a decision. 

Very often, -100% ROI keywords are those that have only received a few clicks. You might want to wait until you receive more than one or two clicks on a keyword before you make any changes. And if you've only spent a few cents on a keyword, it's probably worth waiting to see if the keyword pays off.

If you want to learn more, you can check out this video on finding poor performing keywords.

Short date ranges may obscure your true ROI.

It’s generally not a good idea to make keyword changes on the basis of a few days worth of data. You’ll make better decisions if you also take into account your sales cycle and everything else you know about the specifics of your business online.

Consider your return customers – those that find you via an AdWords ad and then return later to buy again. You’ll miss these repeat conversions if you set too short of a date range. Also, it may take a few days for many of your visitors to become customers. By making decisions based on a date range that is shorter than your sales cycle, you might actually lower your ROI by discounting keywords that are actually profitable.

Try out different date ranges and see how your ROI is affected. Try the most recent days, week, month, and then look at this year’s data. You’ll have more – as well as more interesting – information upon which to base your decisions.

Next week we'll look at the Keywords Positions report and see how your ad position can affect performance.

Posted by Amanda Kelly, Inside AdWords crew