Break-Even CPC & Simple Landing Page Testing

Written by , Bing Ads Evangelist (aka “search nerd”) at Microsoft:

In the relentless hunt for more conversions, being number one has never been so important in a digital marketing. But how to can you get on top and stay there? That will require a combination of tactics.

Conversion rate optimization (CRO) is a great place to start, because your conversion rate drives a fundamental digital marketing formula – your break-even CPC.

Let’s dive into simple landing page improvements, then talk about reinvesting gains into your PPC strategy:

  • The break-even CPC calculation.
  • Review the 10 elements of a landing page.
  • Breakdown a simple example of call-to-action testing on a button.

Break-Even CPC = CPA Goal x Conversion Rate

Improving your conversion rate has benefits, but here’s how it can improve your PPC strategy.

Let’s say you increase your conversion rate from 5 percent to 6 percent. In simple terms, that means for every 100 clicks, you now get six customers instead of five. That’s an extra customer, but for the same spend. Nice.

That means, you’re making more money. Making more money means you can: Pocket the extra cash (more profit), or now, you can increase the amount you pay (bid) for keywords or placements.

Turns out there is a very simple equation that can help you determine the maximum you can pay per click and break even. And a big part of that break-even formula depends on conversion rate.

Break-Even CPC

In search, when you increase your bid, you can move up in position. When you move up in position, the amount of clicks you receive increases (as does your CPC). Your clicks cost more, potentially eating into your newly minted profits, but you’re taking share – a very good thing.

This is why optimizing your conversion rate is so important – it drives bid. Your bid helps determine your position, or your profitability. To be able to be in the top spots, you have to be able to afford it! And the break-even CPC calculation is the foundation of advanced bid strategies.

10 Elements of a Landing Page

How can we improve conversion rate? Landing pages are a great place to start.

With user-friendly, affordable tools like Optimizely, Unbounce, and more, landing page testing is easier than ever. But there are so many components to test, how do we make sense of it all?

First, let’s break down what Bryan Eisenberg refers to as the 10 Elements of a Landing Page:

  1. Logo (Who Are You?)
  2. Headline
  3. Offer
  4. Persuasive Copy
  5. Product Presentation
  6. Call to Action
  7. Confidence Signals
  8. Contact Information
  9. Product Evaluation Information
  10. Basic Template Elements

Eisenberg says the goal is to have 10 of 10 landing page elements. But to start, select the top three elements and make sure they flow together and are easy to view on the page.

Let’s jump into an example focusing on call to action.

Call to Action: Simple Button Test

Now even within the 10 elements listed above, there are countless tests where you can change images, copy, buttons, overall design, colors, and so forth. Where do you start?

Let’s go over a very simple test. Recently Bing Ads ran a call-to-action button test. The button test included the terms “Sign up,” “Get started,” and “Launch your campaigns.” While “Sign up” was the control term, “Get started” and “Launch your campaigns” are active and visual in a positive way that “Sign up” isn’t. So which test won?

The results of the test, conducted over a high-traffic three-week period, were clear.

All three landing pages were served an equal number of times during the test period; the page using “Launch your campaign” performed 11 percent better than the control. That makes a difference over time.

There are countless other tests to run, for example varying button color or size. Turns out that “Launch your campaigns” on the button is significantly larger than “Sign up.”

The big takeaway here is a very small change can make a difference – just test something. Because if you can drive an 11 percent gain in efficiently converting customers, as we talked about earlier, that has implications on paid media strategy.

Go Do This Now

Pick one element on your landing page to test.

  • Test three different versions of that element, keeping a control to evaluate against.
  • Track results until statistically significant (see #14), likely three to four weeks.
  • Re-work your landing page to incorporate the successful element.
  • Pick another element on your landing page to test.
  • Repeat steps 2 to 4 until your landing page is as excellent as it can be.
  • Reinvest your gains with higher bids to take share, or enjoy the extra profits.

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