How Smart Are Smart Goals?

There’s an interesting debate on the newly introduced Smart Goals going on. Although this is the opposite of “Advanced AdWords”, I’d like to add a few points that haven’t been made yet.

Are Smart Goals dumb?

Julie Bacchini startet the discussion with a clear opinion: “Let’s Use Made Up Conversions“. Larry Kim, who’s company deals with many smaller advertisers, disagreed and called Smart Goals “Pretty cool for certain advertisers“. Not amused, Julie wrote a reply and got support from Bryant Garvin.

Basically, the discussion so far is to what extend Smart Goals work towards predicting the actual thing and whether that’s helpful or not. I wrote a post on our German blog today and looked at some data that I found pretty convincing.

Data.

menuWe found Smart Goals were already available in some of our client’s Analytics accounts. With those, Google has released a new report in Analytics. If your account is eligible you can find this report among your conversion goals reports.

The report provides only a few statistics but includes regular conversions. Looking at a client with Analytics conversions fully set up lets us evaluate the new Smart Goals pretty easily.

The full report looks like this:

smart-goal-report

As you can see, the stuff about behavior makes sense: Sessions with completed Smart Goals were much longer and had much more page views. But the conversion columns are much more interesting (I cut the rest out of the picture):

smart-goal-ecommerce

There are a few things to see here:

  • Overall conversion rate is 2.71% compared to 1.68% of sessions with a completed Smart Goal. The number of counted Smart Goal completions is about 40% lower than the actual conversion number.
  • Sessions with a completed Smart Goal actually had an ecommerce conversion rate of 34%. In other words, 66% of the reported Smart Goal completions are not Conversions at all.
  • Smart Goals only cover 21% of Conversions but 35% of revenue. This indicated that those longer, more intense sessions resulted in more expensive transactions. Makes sense.

Is this dumb or not?

In this case I find the data very convincing: Smart Goals are way off. Now an online retailer like this is certainly not representative of the kind of small businesses that are supposed to use Smart Goals, but it makes me wonder how it’s supposed to work any better for them. Maybe Larry Kim or Wordstream can confirm or refute this for smaller clients.

Possible design flaws

This example aside, I wonder if Smart Goals could even theoretically work for small businesses. When I imagine the kind of business that isn’t able to implement proper conversion tracking I envision the kind of business that you’d call or come by. However, both calls and store visits are heavily underrepresented conversion types in Google Analytics. Even though Google has tons of anonymized conversion data, I think the online retailer from the example above should be much better covered than the many small businesses from the offline world.

There’s anonther thing that I found strange. According to the Analytics help page, each visit to a website gets a score. Then a threshold is established by selecting the (approximately) top 5% visits from AdWords. This suggests that Googles assumes a 5% conversion rate from AdWords for every individual advertiser. On the other hand I checked several examples and found only about 2% of the AdWords sessions with a completed Smart Goal. So far I couldn’t make sense of this.

Less work for advertisers?

Google has Smart Goals intended for advertisers who don’t want to deal with setting up conversion tracking. This is also the point that Larry Kim makes: For advertisers who wouldn’t set up conversion tracking this is a much easier alternative. I’m not so sure about that.

Using Smart Goals requires a few steps:

  • Link Analytics and AdWords
  • Enable data sharing in Analytics
  • Enable Smart Goals
  • Import them into AdWords
  • Use them in AdWords, possibly even for automated bid strategies

I admit I’m probably not the right person to judge what is easy and what is not when it comes to stuff like this, but it seems to me that setting up conversions in Google Analytics isn’t that much harder compared to Smart Goals. Both of them require someone to learn a bit about what they’re doing and then click through more settings that they’re comfortable with.

My advice for small businesses

Even if you don’t want to put too much effort into learning about conversion tracking and web analytics and everything, don’t put up with Smart Goals. If you’re an AdWords Customer, get Google Analytics on your site and then call the AdWords support. Have them walk you through a proper setup for Conversions in Analytics. I haven’t tried this specifically, but in my experience they’re very helpful with things like this.

About Martin Roettgerding
Martin Roettgerding is the head of SEM at SEO/SEM agency Bloofusion Germany. On Twitter he goes by the name @bloomarty, and you can find him regularly on #ppcchat.