Making sure you have enough data to make informed decisions can be the key to the success of your Google Ads campaigns, but do you know how much data is enough? In this post we discuss different sample sizes and the occasions in which you might want to make adjustments earlier.
Firstly, Is The Data Useful?
Before you start to look at whether you have enough data, you need to make sure that the data you’re collecting is actually useful. In Google Ads this is mainly going to be done by making sure that conversion actions and values are being tracked.
You can have all the click data you want but if you don’t know if the clicks are turning into meaningful action then the data is pretty much worthless.
It’s also worth considering that there are multiple variables when looking at Google Ads, many of which are external and some of which you may be able to control but may still only have limited control. Things to consider include:
- Time of year/Seasonality – For example if you’re a toy shop you may expect to have better performance in the run up to Christmas.
- Competition – This could be new competitors, existing competitors changing strategy or stopping using Google Ads altogether. All of these can affect your performance.
- Bids – If you’re using a manual CPC you will have control of what the maximum you spend is, but you don’t actually have control over what your cost per click will be. Other changes can cause your position to drop and therefore you’re CPC can drop too.
There are probably a host of other factors worth considering too, I even saw a case study where they analysed performance against weather conditions recently.
The main thing is that these tests aren’t in controlled conditions.
Understanding Your Aims Can Help Determine Your Data Requirements
If you have a set goal then the data requirements can be much easier to try and figure out. Usually in Google Ads the main aim will either be a target Return On Ad Spend (ROAS)/Cost of Sale (CoS) or Cost Per Acquisition (CPA). We will discuss there to see what the minimum amount of data should be considered.
ROAS/CoS – How To Work Out The Target CPA
When working out the amount of spend required in order to analyse a variable based when working towards a target ROAS or CoS, it will be helpful in order to know the average order size for that particular variable.
This can then be used to calculate the expected CPA for that variable:
Average Order Value / Target ROAS = Target CPA
Average Order Value x Target CoS = Target CPA
Once you have the target CPA this can be used as the absolute lowest amount of spend required in order to make changes for that variable. Of course if you can gather more data you should be able to make better decisions. At Pinnacle we usually aim for 2-3x the CPA in order to make sure there’s enough data to make informed changes.
Why More Data Is Useful
We will now run through an example of why more data is better and try to use examples to show why we usually aim for that extra 2-3x the CPA. In the example we will use a target CPA of £30.
In this example the variable measured has come off to a good start and has initially hit the target CPA, however as it’s run for longer the performance has dipped meaning that the variable is no longer hitting the target. Using 1 or 2 times the CPA you may have looked at maintaining the performance, however looking at the 3x CPA you may want to look at making changes to improve performance.
In this example it’s made a bad start, but with more time it’s got traction and it’s now hitting the target CPA. If you only looked at the first step you might have considered pausing that aspect however.
When You Might Want To Make Changes Early
There are sometimes times when you might want to make decisions to make changes early. The main one is where a variable does particularly well and you might want to boost that area now rather than waiting for more cost data beforehand.
But what you will want to consider is if there’s enough of other data. If it’s only made one conversion before the target CPA it might be too early, if it’s made 5 then it may be that it’s obvious that it’s going to do better and it might be worth taking action now.
Do What’s Right For Your Business
We hope this has made it easier for you to analyse your data in Google Ads moving forward. The most important thing however is to come up with a model of data analysis which meets your business requirements and one in which your business can effectively use.