CPC Part 5 – PPC Closed Loop Reporting – The Holy Grail

Challenge: I think my PPC program is performing well – but how do I prove it?
Lesson: The true proof of any marketing campaign is comparing program costs to revenues (ideally gross margin). Closed loop PPC revenue reporting is possible with a bit of effort and analysis and will guide your future decisions.

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Challenge: I think my PPC program is performing well – but how do I prove it?

In a previous blog, we talked about tracking metrics like CPC and CPL.  These are good measures as you get started, however the real payoff is in driving revenue.  Given the relatively simple integrations between search engines like Google and SFA systems like Salesforce.com, you can track leads driven by PPC into SFA and through to a closed sale. 

Basic closed loop reporting is pretty simple and can be done by combining cost data from AdWords with sales progression shown in your SFA program.  If you are tracking Ad Group and Keyword sources, you can then run reports on closed revenue by these fields.  Generally, I have found, that tracking down to an Ad Group level is sufficient level of detail given that your PPC campaign has relatively small ad groups.  Even starting at the Campaign level can provide satisfactory results when starting out.  This can immediately give you visibility into which areas are driving revenue and which are not.  You can then use this information to guide your future optimization and bids in your PPC engines.

That said, what is best is to compare you spend to the revenue generated on an ad group basis.  This requires the integration of spend data by ad group with the revenue data by ad group from your SFA program.  You need to work out time periods and have similar naming structures in both sets of data to effectively build this integration.  While not exactly simple, this can be done via Excel and matched on a weekly basis.  The resulting reports will directly show ad group spend compared to revenue.  The remaining challenge is to account for the average sales cycle – since your spend today may not pay off in sales for weeks or months.  To the degree that your sales cycle is longer than 2-3 months, you may also need to consider a means to time shift your PPC spend to more closely match your PPC revenue.

Sales cycle time adds further complications in that changes you make to optimize your ad groups today will not show the full impact until these new leads have a chance to run through your average sales cycle time.  It takes significant discipline to wait this long to evaluate the impact of these changes.  Being impatient, my preference is to identify early indicators of future revenue.  This can be the lead rating or status of these leads.  If you see a spike in the Junk or Unqualified lead rating after a change is made, you can be somewhat sure that revenue will likely drop in the future from that ad group since the conversion rate to qualified lead has immediately dropped.  While not perfect, this allows you to make faster assessments of your ad group optimization efforts.

You may be surprised at what you find.  In the past, we have found that some campaigns looked great on a cost per lead basis. However, later it was discovered that these leads were not closing in terms of revenue. At this level of analysis you may find that your sales team is not well trained on how to position a certain product or that the product itself does not compete well in the marketplace.  So you may be generating quality leads but there are other issues in the sales funnel that are preventing this ad group from being a real success in terms of revenue. 

Lesson:  The true proof of any marketing campaign is comparing program costs to revenues (ideally gross margin).  Closed loop PPC revenue reporting is possible with a bit of effort and analysis and will guide your future decisions.

Author: Larry Stein at TechMarketingStrategies

For the last 20 years, I have led demand generation teams supporting high growth technology companies. Now working as an independent consultant, my responsibility is to apply best practices in the creation of these programs. My goal is to enable marketing teams to become self sufficient with a data driven culture of KPI's, test and measurement in service of achieving company revenue targets. My approach is to work with senior management identifying objectives and wildly important goals. With these in mind, we work together to build programs, processes and systems that will reach these goals along with the measurement KPI's to evaluate progress. Along the way we will enable the team to manage and maintain these systems so achieving these goals becomes a natural cadence of the marketing organization.

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