When it includes conducting paid search campaigns, there are countless PPC metrics that promoters can track and measure.
Unlike other traditional advertising channels, pay-per-click marketing enables advertisers to track every feature of their campaigns. How many impressions and clicks they receive at their click-through rate and cost per click is no secret that PPC campaigns are highly data-driven.
But with so many PPC metrics, not all of them are created equally. This usually starts the debate of key performance pointers vs. vanity metrics, and which are the most prominent to monitor.
Although the most important metrics actually differ from campaign to campaign, there are some that are critical to the success of every campaign.
To help ensure that your paid search campaigns are successful and get the best ROI possible, here are the most important PPC metrics you should monitor.
The 9 Most Important PPC Metrics
1. Conversion rate
Conversions are what most advertisers are, whether taken as leads or sales. Remember that there’s no solid benchmark for turn rates across enterprises; they will vary exceedingly from advertiser to advertiser. Like other metrics, trends are the star of the show when it comes to conversions and conversion rates. Keep in mind that changes in conversion rates can be as complex as seasonal or as the changing business landscape within your industry.
2. Total conversion value
Total conversion value is another important metric for making comparisons between campaigns, ad groups, and even individual keywords. Some business owners find that shoppers who are looking for specialty products tend to spend more.
For example, say that there has been an improvement in running an ATV store and you have seen that a person is looking for a new battery and can only buy and leave the battery. On the other hand, you have also noticed that customers looking for new headlights want to upgrade other features like tires, mirrors, and decals at the same time. Although by itself, the price of the battery and the headlight may be approximately the same, the total conversion value of the headlights will be higher because the average order price is much higher.
3. Return on Ad Spend (ROAS)
Return on Ad Spend or ROAS is also known as Return on Investment or ROI in common parlance. This is not technically correct though, as true ROI will take under consideration all costs regarding your PPC (the cost of clicks, fees for management by a 3rd party or agency, fees for the planning of display ads, etc.). ), the thought remains an equivalent.
ROAS is the return you get on your PPC spend, and you can calculate the cost of that advertising campaign by dividing the profit by the advertising campaign. This is the most important metric because it tells you whether your investment is being considered a brake or not, as well as what kind of return you can expect by exaggerating or reducing PPC efforts.
4. Cost Per Acquisition (CPA)
Also referred to as conversion or cost per lead, when it involves your bid strategy, the value per acquisition metric is incredibly important. Combined with customer lifetime value (CLV) and cost per click (CPC) metrics, these are often used together to keep the campaign profitable.
If the lifetime value of the customer falls too low, a good cost per acquisition metric can often be the difference between profitability. In other words, if the lifetime value of the customer is $ 100, but it costs $ 120 to convert the user into a customer, not a profitable campaign. Knowing your CPA is important, but on its own, it is not as useful.
5. Quality Score
You want to pay attention to your Quality Score because Google considers both the Quality Score and the bid amount of the keyword when determining the position of your ad. The exact calculation of how Google determines ad position is complex, but having a high-quality score means that, in some cases, you can jump a competitor’s ad even if that competitor’s bid is high.
6. Cost per Conversion
Cost per conversion is the original cost paid to generate a sale or lead. Saying you spent $ 80 on clicks and two sales – your resulting cost per conversion would be $ 40. This would be a higher cost per conversion when selling T-shirts (where the average order might be $ 20), but a lower cost per conversion if considering selling a shelter (where the average order might be $ 2,000).
For this reason, no unique cost per conversion increased to shoot when running a PPC campaign. Instead, it all comes down to how many sales you have, which means that you need to look at your profit margin and determine what is the acceptable cost per conversion for every of your product lines.
7. Click-through Rate
To push traffic and sales to a website, you require people to click on your ad. Measuring the number of clicks an ad receives may seem like a useful metric, but simply the number of clicks by itself provides very little information. Instead, the number of people watching an ad is a better metric than the number of clicks.
Estimating the click-through rate of an ad is a great way to determine how effective it is. A low CTR advertisement may be relevant or sufficient for users and may require some adjustment. Comparing an ad’s CTR to other ads and industry metrics can be a quick way to determine if an ad has ended or gone bad.
8. Return on Ad Spend (ROAS)
The whole purpose of running a paid search campaign is to generate profit for the business. It does not matter whether it is the leadership of a shopping campaign, a brand awareness campaign, or a gene campaign, your aim should be to make money.
If considering running a PPC campaign and constantly losing money, will the point improve? Except you have a free Google advertising grant credit, you can spend that money elsewhere, such as search engine optimization.
9. Customer Lifetime Value (CLV)
When it comes to creating a profitable PPC campaign, one of the most important metrics is customer lifetime value or CLV. Similar to the average order value, this metric helps advertisers know how much they should bid and their target cost for acquisition. The lifetime value of the customer can be defined as the total amount of profit or expense expected from the customer during the entire relationship.
This CLV metric is important when it comes to SaaS and membership-based businesses because these relationships can often last for years. Unlike other retail businesses, where customers buy something every few months, SaaS businesses derive estimated recurring revenue from customers every month.
