Which Matters More: Traffic or Testing?
In recent years, there has been a shift in attention from traffic to testing.
It makes sense, it’s becoming increasingly hard to win at online marketing. In many ways, it seems like the easiest way to get more out of your traffic is by improving site performance.
As exciting as the idea of conversion rate optimization is, though, the question remains:
Which affects your marketing campaign success more—traffic quality or site quality?
It’s an important question to consider. For most marketers, time and resources are limited, which means you need to spend the majority of your time in the areas that produce the best results.
So, if you have to choose between refining your traffic and perfecting your site, which optimization will give you the best bang for your buck?
Running the Numbers
To evaluate how testing and traffic affect your marketing success, let’s run a quick hypothetical.
In this scenario, let’s suppose that you are running paid search ads for your business. You’ve got a decent site/landing pages and—on average—you pay $4 per click.
Recently, you spent $20,000 on a new campaign that produced 5,000 clicks.
That’s a lot of traffic, right?
Unfortunately, there’s a problem. Most of that traffic isn’t actually interested in what you’re selling.
As it turns out, the average paid search account wastes 76% of it’s budget on search terms that never convert. In other words, 76% of paid search ad spend goes towards the wrong traffic.
For you, that means you spent about $15,000 on clicks that have no chance of converting.
They may have accidentally clicked on your ad…or they thought you were selling something different than you actually sell. Maybe you were simply bidding on the wrong keywords.
Thanks to all those irrelevant clicks, only 1,250 of your 5,000 site visitors are actually potential customers.
So, in terms of your relevant traffic, here’s what your ad spend really paid for:
Hm, that’s not nearly as exciting. You might be paying $4 per click, but you’re actually paying $16 per relevant click.
But still, that’s nothing a little testing can’t take care of, right?
Now, as a best practice sort of marketer, you ran an A/B test on all of that traffic.
Unfortunately, what you didn’t realize was that you weren’t testing 5,000 visitors. Remember, only 25% of your traffic is actually interested enough to potentially convert.
As a result, you thought you were testing this:
When in reality, you were testing this:
That’s unfortunate, but you’ve still got enough traffic to run an effective test.
During your test, you get 100 conversions in your control (variant A in your A/B test) and 120 conversions from your variant (variant B).
Sweet! Clearly, your interested traffic responded much better (20% better, to be precise) to your variant.
At $5 per click, you just dropped your cost-per-conversion from $25 to $20.83. The results are statistically significant, so that’s a win, right?
But wait, before you start throwing confetti, remember, you didn’t pay for 1,250 relevant clicks.
You paid for 5,000 clicks.
Here’s what your test population actually looks like:
All …read more
Source:: Kiss Metrics Blog