This script calculates the Lin-Rodnitzky (L/R) ratio for your account. This ratio was invented by the founders of PPC Associates, which later became 3Q Digital and is now part of Hart Hanks. The L/R ratio is a measure of how efficient your keyword-targeted search campaigns are.
The formula to calculate the score is as follows:
CPA of All Search Queries / CPA of search queries with at least 1 conversion
A score of 1 means that every query for which your ad gets clicks is also getting conversions. While that may sound amazing, it's also indicative of a very conservative account management strategy, one that overly focuses on brand keywords and other sure-bet keywords. These campaigns are likely missing significant opportunities.
The Optmyzr solution in this case is to use tools like the Keyword Lasso to find new keywords to add to the account. Our pre-built "CTR" methodology is a good one to use in this case because it helps find new keywords that seem relevant to users because they click on ads for these queries at a higher rate than for the underlying keyword that triggered an ad for the query.
As the L/R score gets higher and higher, it means that a lower portion of search queries are delivering conversions and the aggregate cost of all these non-converting queries is weighing heavily on the overall performance of the campaign.
In this case, a good solution is to use Optmyzr's Negative Keyword tool to identify common words that frequently appear in non-converting queries. By adding these as negative keywords through Optmyzr, less cost will be wasted on these non-converters and the ratio may start to decrease.