The Key PPC Metrics Every Advertiser Should Track
In this article, we discuss the most important PPC marketing metrics and how you can best leverage each metric to improve the efficiency of your PPC marketing.
In and outside the world of PPC marketing, it’s vital to understand the key PPC metrics that matter most when meeting your business objectives. But with so many data points to keep track of, it can be overwhelming to know where to start.
If you’re already running PPC Ads, you may be asking yourself:
- Which metrics should I be reviewing?
- Am I optimising towards the right metrics?
- What are the metrics that I can influence?
Don’t worry, though – Farsiight has got you covered!
I will split this into two categories of PPC metrics, Engagement and Performance metrics. However, within each category lie calculated metrics created by combining, subtracting, dividing or multiplying other metrics.
Engagement metrics provide valuable insights into the overall effectiveness of your advertising campaigns but do not directly correlate to your performance-based KPIs, such as leads and revenue. Engagement metrics are typically leading indicators of whether you will see success in your Performance metrics. So while they are of lesser importance, we spend a lot of our time when it comes to optimising strategies.
Engagement metrics are often used to measure the impact of your PPC marketing on brand awareness, engagement, and other intangible outcomes. This includes metrics like ad impressions, click-through rate (CTR), cost-per-click (CPC), ad relevance, quality score, and more, which reflect how well your ads resonate with your target audience.
Performance metrics, on the other hand, are more concrete and directly tied to business outcomes. These metrics include conversion rate, cost per acquisition (CPA), return on ad spend (ROAS) and conversions. By monitoring these Performance metrics, you can track the financial impact of your PPC marketing and make data-driven decisions about where to invest your advertising budget.
Now that you better understand the difference, let’s start with the key Engagement metrics you should track in your PPC marketing.
- Impressions – column name ‘Impr.’
The number of times your ad is delivered on the channel that you are targeting. Measuring ad impressions is important because it provides a valuable indication of the visibility and reach of your ads. This information can help you determine the overall reach of your PPC Marketing and assess the effectiveness of your ad targeting and ad copy.
- Clicks – column name “Clicks’
The number of times your ad is engaged represents a direct interaction with your brand. By tracking your ad clicks, you can assess the performance of your advertising campaigns and determine which ads resonate with your target audience. Clicks can help inform you on whether you’re targeting the right keywords and if your ad copy needs adjusting better to meet the needs and interests of your potential customers.
- Click-through-rate – column name ‘CTR’
CTR tells you how many people clicked on your ad compared to how many times it was shown. For example, if you had 1000 impressions and 100 clicks, the CTR is 10%, which is considered very healthy in the world of search. It’s a go-to metric for measuring the effectiveness of your keywords and ads.
If your CTR is low, your ad copy may not match the search query that someone typed in. Or maybe your ad position is too low on the search engine results page. CTR is a great metric to review as if you can increase your CTR on your high-value keywords, you can scale your account without having to find new keyword opportunities which may result in a reduction in performance.
- Cost per click – column name ‘CPC’
This one is pretty straightforward. CPC tells you how much you’re paying when a user engages or clicks on your PPC marketing ad. Measuring CPC is vital as it will impact what you pay per lead or sale, so finding the sweet spot based on your unit economics and finding new opportunities to reduce CPCs is essential. CPCs can be reduced by improving your ad relevance and landing page experience or reducing bids (which will impact your ad position and CTR).
- Quality Score – column name ‘Quality Score’
A measurement from 1 to 10 informs advertisers of how relevant their PPC marketing is. It’s an estimate of the quality and relevance of your ads, keywords, and landing pages to the user’s search query. A higher quality score means lower costs and better ad positions. By tracking your Quality Score, you can assess the effectiveness of your ad targeting and ad copy, and determine which areas require optimising.
- Search Impression Share – column name ‘Search impr. share’
In its simplest form, search impression share tells you the percentage of impressions your ads received compared to the total number of impressions available for the keywords you’re targeting. By tracking your Search Impression Share, you can assess your ads’ overall reach and visibility and identify any gaps in your ad targeting or bidding strategy limiting your growth. Two causes will impact your impression share, being budget and ad rank. If you have a limited budget, your ads can’t serve all available impressions. If your ad rank is low, which is impacted by your quality score and bid limits, your delivery will also be impacted.We regularly assess search impression share to understand how much extra room we have to scale if performance exceeds KPIs
- Bounce Rate – column name ‘Bounce rate (UA)’
The percentage of users who land on your website and leave without interacting further. A high bounce rate indicates a poor user experience on your website and that users are not finding what they want.
There are endless reasons why a website may be experiencing a high bounce rate. The two most common factors we observe are a slow page load speed time or a landing page that doesn’t directly match what the user was searching for. The average bounce rate varies greatly, and paid advertising bounce rates are typically higher than your organic channels. As a reference, if your bounce rate is higher than 50%, this is an opportunity area that you should focus on. If your Google Analytics account is linked to your Google Ads account, you can view bounce rate and other engagement metrics within the ad platform. Otherwise, this data can be viewed directly within Google Analytics, as seen below:
Okay, so they are some key Engagement metrics you should focus on. Let’s take a quick breather before getting into the Performance metrics.
- Conversions – column name ‘Conversions’
A critical metric that measures the number of desired actions taken on your website, such as purchases, form submissions, phone calls or anything you predefine as important to track when setting up the conversion action. It’s an important metric showing how effectively your advertising efforts drive desired user actions.
There are two key strategies to drive more conversions for the same ad spend and improve your overall marketing efficiency.
The first is reducing your cost-per-clicks. As previously discussed within Engagement metrics, this can be done by improving your quality score or reducing bids. The other strategy is increasing your conversion rate, which we will discuss next.
- Conversion Rate – column name ‘Conv. rate’
It is a calculated metric that measures the percentage of users who take a desired action on your website, such as filling out a form or making a purchase.It’s calculated by dividing the number of conversions by the total number of clicks (10/1000 = 1% conversion rate).”What is a healthy conversion rate” you may be asking yourself. That depends on a lot of things. Firstly, what are you tracking? For service-based businesses tracking leads, a 5%+ conversion rate is considered healthy. For e-commerce businesses tracking sales, a conversion rate of 1.6%+ is considered healthy, but that depends on the average order value and many other factors.There are endless ways to improve conversion rates inside and outside the PPC marketing platform. Reviewing key data points such as demographics, audiences, keywords, regions, devices, and household income and finding opportunities to exclude certain areas that are performing below your KPIs can improve the conversion rate.
Post-click strategies will also improve conversion rate, such as focusing on your page load speed time, ensuring the site is mobile responsive, optimising landing pages and running conversion rate optimisation (CRO) to test varying content and elements on your site consistently. Improving conversion rate is another topic and should be a large focus point when running PPC marketing and any advertising campaign with a performance objective.
- ROAS (Return on Advertising Spend) – column name ‘Conv. value/cost’
It is a key metric for retail businesses or other companies measuring revenue. It measures how much revenue your business generates for every dollar spent on advertising. It’s a metric calculated by dividing your total revenue by your total advertising cost.
ROAS, like conversion rate, is a metric that companies spend a lot of time investing in strategies to improve. Again, we can’t share what a healthy ROAS is, as it completely depends on the unit economics of a unique company. For example, some companies may operate their ads at a 3 ROAS and be more profitable than those running ads at a 5 ROAS. Their operating expenses, fulfilment costs, wages, etc., are unique.
Strategies to increase ROAS include focusing on higher average order value keywords and channels and improving the conversion rate of your PPC marketing campaigns, as discussed above.
- Cost per Conversion – column name ‘cost/conv’
It is another calculated metric that measures how much you’re spending on each conversion generated. It’s calculated by dividing your total advertising cost by the number of conversions.
Service-based and technology companies typically KPI their advertising based on this metric.Cost per conversion can be improved by increasing your conversion rate and reducing your CPCs.
And that’s a wrap on the key PPC metrics you need to know and strategies to influence them positively!
Remember, a wide range of metrics must be considered when measuring your PPC campaigns’ success. From the performance-hitting data points like cost per click and conversion rate to the engagement metrics like bounce rate and quality score, each metric provides a unique perspective on your campaign’s performance.
By tracking and analysing these metrics over time, you can gain valuable insights into the effectiveness of your PPC campaigns and optimise your performance to achieve your KPIs and business objectives.
Hopefully, when your in-house media buyer or agency is talking in acronyms “CPCs, CPAs, ROAS” etc, you’ll now know they are not speaking gibberish.
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Josh is the co-founder of Farsiight and has spent the past 12 years scaling PPC campaigns.