Let say that we have 5 men who all are 2 meter tall – and 5 men who are 1.80 meter tall. Then you will tell say that the average height is 1.90 meter – right? The problem is that nobody is really 1.90 meter tall in this group of men.
“The tyranny of averages is a phrase used in applied statistics to describe the often overlooked fact that the mean does not provide any information about the distribution of a data set or skewness, and that decisions or analysis based on this value—as opposed to median and standard deviation—may be faulty” (from Wikipedia).
The average PPC
In PPC you will have an average of – let’s say – 10 dollars per conversion in 2011. But you will have some months doing much better and month doing lot worse.
Maybe you product is a product that is only really interesting in the summertime – even though people might click on your ads all year around. So maybe your conversion rate in the summertime is only 1 dollar.
Most of the time your conversion rate is not average – it’s always better or worse than the average.
My PPC campaigns are bad… ?
But with a conversion rate of 10 dollars you are losing money – so your boss or your client tells you to stop advertising on Google Adwords or other PPC search engines.
You should stop advertising from October to May – and spend the entire budget in the summertime instead.
The lesson to learn here is to dig deeper than the average number. The average number is for the executive summary. So of course you need average numbers – but you will make a big mistake if you only focus on the averages.
Check out the worse and best performing keywords and ads – Why are they performing bad/good? Is there some kind of characteristics about them? Remember to check out the hour performance, is the weekend better, seasoning etc.
You average might look fine for some of your campaigns – but they still might be doing a bad job half of the time.
So take your time to dig deeper.
An example of the average tyrannies is this one. I had an ad that was doing average.
I was checking it once a week. The next week it was really going down. The problem was that the client had deleted the landingpage. So I was sending thousends of people to an nonexciting page every day.
If I had been more carefull and not trusted the average I would have discover that Monday, Tuesday and Whensday was great. And after that 0 conversion. Instead the next Monday I could see – that it was still average.
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