So, you’ve got your Google PPC campaigns up and running. Good on you! But once they’re live, how can you tell if they’re hitting the mark?
There are a ton of metrics out there, and it can feel overwhelming trying to navigate through them all. However, not every metric is equally significant. It’s crucial for you to zero in on the ones that truly make a difference—the ones that will genuinely help you tweak your campaigns and ensure you’re not just throwing your budget away.
In this blog, I’ll guide you through the seven most important metrics that every marketer should consistently monitor. These are the key figures that will empower you to get the most out of your Google PPC ads. Ready to dive in?
1. Return on Advertising Spend (ROAS)
When you’re investing in advertising, the biggest question is, “Am I getting my money’s worth?” Return on Advertising Spend, or ROAS, is the metric that gives you the answer. It’s your tool to demonstrate the tangible returns when senior leadership asks, “What are we actually getting from our ads?”
Here’s how you calculate it:
ROAS = $ received from ads / $ spent on ads
To determine an accurate ROAS, you need to be on top of your deals, sales, and, most importantly, the origins of these conversions. Understanding where your converting leads are coming from is key.
A great way to gauge your ROAS’s effectiveness is by comparing it with results from other channels. If your ROAS for Google PPC is on the lower end, it might signal that your ads require tweaking or that Google PPC may not be the best fit for your brand. Conversely, if your ROAS is looking pretty robust, that’s your cue to keep refining your strategies and perhaps even ramp up your investment.
2. Cost Per Conversion
Have you ever wondered how much you’re actually spending for each successful action taken on your ad? That’s what the ‘Cost Per Conversion’ metric helps you decipher.
Cost Per Conversion isn’t just a fancy term; it’s an essential indicator for evaluating the efficiency of individual ad campaigns. Whether that conversion is an email sign-up, a form submission, a content download, or something else entirely, this metric offers insights into what each of those actions costs you.
Here’s the simple formula:
Cost Per Conversion = Total ad cost / Total number of conversions
For a clearer understanding of your Cost Per Conversion, it’s beneficial to compare its value from Google PPC ads against other marketing channels you’re utilizing. This can give you insights into which channels are offering the best value for each conversion and where you might need to make adjustments.
3. Conversion Rate
The ‘Conversion Rate’ is like your compass in the vast ocean of Google PPC. It points towards how effectively your ads lead users to take that all-important desired action post-click.
Through this metric, you can get a clear picture of which ad copies, keywords, and landing pages are your top performers. Not only that, but it also alerts you if adjustments are needed – be it in your landing page, keyword choice, or the audience you’re targeting.
A common misconception is that a low conversion rate automatically means your landing page needs a revamp. However, it could just as easily be a result of misaligned keywords or ad copies that don’t resonate. So, while optimizing your landing page is crucial, it’s equally vital to craft compelling ad copies and choose the most relevant keywords.
One thing to remember: conversion rate doesn’t provide insights into the quality or intent behind each conversion.
Here’s how you compute it:
Conversion Rate = Total no of conversions / Total no of clicks
Typically, a good benchmark for a healthy conversion rate ranges between 2% to 5%. If you’re hitting or exceeding this range, you’re on the right track!
4. Click Through Rate (CTR)
‘Click Through Rate’, commonly known as CTR, is a powerful indicator of the immediate appeal of your ad. In simpler terms, it reveals how many times people saw your ad and felt compelled to click on it.
Achieving a good CTR isn’t just about having an attractive ad image or title. It’s about ensuring that your ad copy aligns seamlessly with the keywords chosen for that specific campaign. A point worth noting: a low CTR can have a cascading effect on your quality score. And a diminished quality score can hinder your ad’s overall performance, potentially costing you more for lesser visibility.
Here’s the formula to determine your CTR:
CTR = (No. of clicks / No. of impressions) x 100
Aiming for a CTR? Consider the benchmark of 4% to 8% as your target zone. Landing within this range indicates your ad is resonating well with its audience.
5. Cost Per Click (CPC)
‘Cost Per Click’, abbreviated as CPC, is a straightforward yet crucial metric that shows exactly how much you’re spending each time someone clicks on your ads.
One of the beauties of digital advertising is its ability to improve efficiency over time. As you refine and optimize your ad campaigns, tweaking keywords, ad copies, and targeting parameters, you can often see a decrease in your CPC. This means you’re achieving more while spending less.
To determine your CPC, use the following formula:
CPC = Total ad cost / Total no. of clicks
Monitoring and working to lower your CPC can result in a more cost-effective and successful ad campaign.
6. Quality Score
Think of ‘Quality Score’ as the report card for your ads on Google’s platform. Rated on a scale from 1 to 10, it reflects how relevant and effective your ads are when matched against user queries.
Three core factors contribute to your Quality Score:
1. Ad Relevance: How closely your ad matches the intent behind the search query.
2. CTR (Click Through Rate): The frequency at which users click on your ad when it’s displayed.
3. Landing Page Experience: How useful and user-friendly your landing page is to those who click on your ad.
Your Quality Score isn’t just a number for the sake of metrics; it has direct implications on the performance of your ads. A high Quality Score boosts your ad’s rank, making it more likely to be displayed prominently. On the flip side, if you’re scoring below 7, it’s a signal that your ads may not be showing up as often as they could be, or even at all in some cases.
In essence, aiming for a Quality Score between 7 to 10 is advisable, ensuring your ads are not just seen, but are also resonating with the target audience.
7. Impression Share (IS)
‘Impression Share’ serves as a mirror reflecting how visible your ads are in the vast digital landscape. Specifically, it indicates the percentage of times your ad was displayed in comparison to the total number of times it could have potentially shown up.
Are your ads not appearing as often as you’d like? The culprits usually are either your ad rank or your allocated budget. By keeping a close eye on your Impression Share, you gain a clearer understanding of how often your ads make it to the spotlight.
Here’s a rule of thumb: If your Impression Share falls below 70-80%, it’s time to delve deeper. Identify the gaps – are you being outbid by competitors, or are your ads not deemed relevant enough? Adjusting your strategies based on this insight can ensure your ads get the visibility they deserve.
