Monthly Archives: January 2012

Website Optimisation – A/B (Split) Testing – The Best Way to Reduce Costs and Increase Conversion Rates

apple vs orange. A B testing internet marketing campaigns
Which one will convert better?

As a serious online advertiser it is essential that you keep your costs low and your profits high, in fact this is a core principle of any business. A more direct way to look at this from an internet marketing point of view is to increase your conversions while reducing the cost per conversion (sale, acquisition, subscription, sign up etc).

If you are using paid advertising such as pay per click (Google AdWords, MSN AdCenter, etc) your aim is to increase the click through rate (CTR) and in turn conversions, while reducing your cost per click (CPC). This therefore yields a higher return on investment, and so you make more money.

One of the most effective ways of optimising your website, ad copy or marketing campaign is to do split testing. Split (A/B) testing is a form of continuous optimisation and monetisation which involves creating two or more variations of your ad copy or website/landing page.

Here is a good example; if we were running an AdWords campaign, and we decided to split test using two versions of the same ad copy. However, there would be a slight difference between the two, it may just be the headline that is different (or they could both be very different). AdWords gives you the option to rotate your ads evenly so that they all get roughly the same exposure to impressions. Using this method we can then let the two variations run for a week or so (or a certain amount of impressions each). Once the preset goal has been reached (time or impressions), we then check the results. You will more often than not, see that one ad variation has outperformed the other. This is obvious when you compare which one has a higher click through rate (CTR). Based on this solid evidence we can now scrap the lower performing ad and replace it with a different version that has not yet been tested. This can be done frequently to improve CTR, reduce CPCs, improve conversion rates and in turn reduce costs.

The same can also be done for a website/landing page by using Google’s Website Optimizer software. This tool allows you to display different variations of your home/landing page to users. You can then customise what text, images, lay out, colours they see and much more. After creating two variations you can then simply refer to your analytical software to see which one has a lower bounce rate and higher conversion rate (the one that increases conversions or keeps visitors there longer). Google Analytics works well for this part of the analysis/optimisation process. Some of you may be thinking, ‘well most of my traffic is free natural traffic’. It’s not really free is it? You are paying for backlinks, content, your domain costs, your hosting costs, your server costs and maybe a lot more. Even if it’s not directly you are still paying for the time invested. Time is money and the better your conversion rates are, the more money you save (and make).

The task of optimisation is a continuous one and a very necessary one at that too, so make sure you optimise everything you do with your online marketing campaign. And split (A/B) testing is the first step towards lower costs and increased profits.