Why It's Important to Split Test Your AdWords Campaigns

I'd bet my house that you've heard someone say "It's essential to split test your AdWords campaigns". But, before taking the time to implement a means of doing so, we need to understand the benefits of split testing.

None of us, no matter how smart our approach, can hit a home run with each and every ad campaign. To put it simply, there are too many variables influencing how a particular ad or campaign will perform. This article covers some of the main benefits of split testing, and how you can use it to your advantage.

7 great reasons to split test your AdWords campaigns

Money It's very easy to say that by split testing you will save money, but at the end of the day, it can be the difference in a profitable campaign or a loser. An added benefit is that there is a compounding effect that split tests have that can realize even more profits over time.

Let's say you launch a split test and find a way to decrease your CPCs by 20% while achieving the same number of clicks. Then, independently, you also run a split test on your landing page and discover a landing page variation with a +20% conversion rate. Here would be the impact of these split tests implemented independently, and then together:

State CPC Conv. Rate Clicks Cost Conv. CPA Conv. Val. Revenue Profit ROI
Pre-Split Tests $1.00 10% 100 $100.00 10 $10.00 $10.00 $100.00 $0.00 0.00%
Split test 1 - CPC $0.80 10% 100 $80.00 10 $8.00 $10.00 $100.00 $20.00 20%
Split test 2 – CR% $1.00 12% 100 $100.00 12 $8.33 $10.00 $120.00 $20.00 20%
Effects Compounded $0.80 12% 100 $80.00 12 $6.67 $10.00 $120.00 $40.00 50%

Split test 1 and 2 each added +20% ROI, but when implemented together, they have a +50% ROI lift, not +40%. This is the power of compounding split tests at play.

No more guessing We believe in data-driven decision making, and once you have a large enough sample size, you'll be able to make campaign decisions based on facts, not conjecture. In truth, guessing is not a smart practice when it comes to spending either your or your clients' money. The benefit here is that it gives you a lot more confidence. If you're confused as to what to do, just test things!

Your competition You can be sure that your competitors are testing and optimizing their campaigns for all they're worth. I don't think I can stress highly enough that tools will help you gather competitive intelligence. For ad copy testing, we may be biased, but our product, Ad Assistant, will show you competitors' ads, along with a lot more. A tool like Optimizely can also be a great help for landing page testing.

Keywords Understanding which of your keywords are getting the clicks and more importantly, leading to conversions is some of the most important data you can test for. Using the AdWords search query report or tools like SEMRush and SpyFu will give you the best results in your keyword research.

Bids Your bid positions and the amount you are spending for those are things you'll want to take a look at. Sometimes the top position is less desirable than the 3rd or 4th, particularly if the conversion rates are close but the costs are significantly lower.

Leverage Split testing is one of the highest-leverage activities you can perform in your business. Employing real data to fine-tune results will help you get into profit faster. See the table above to see how even a modest improvement in performance can do wonders for your leverage and compounding effect.

Getting into profit Testing is the key to getting past break-even or loss, and learning about what works and what doesn't. Don't expect to break even on your first try, only knowledge combined with a proactive approach to testing and campaign management will ultimately lead you into profits!