The 10 Most Important Google Ads PPC KPIs to Focus On
Among the many benefits of pay-per-click advertising (PPC) is the provision for measuring ad performance over time. Through Google Ads, for instance, users can access various metrics called key performance indicators (KPIs) to analyze the success of their ads.
Having the right information often determines the success or failure of a marketing campaign. While the best metrics to use will depend on your marketing campaign, the following KPIs are among the most important for achieving success with Google Ads.
For any ad to succeed, its target audience must first see it. Impressions refer to every time an ad renders on a viewer’s screen. While this KPI is not necessarily an indicator of how well an ad is performing, it reveals how many people view it. Since ads cannot succeed unless people view them, you should pay attention to your ads impressions, e.g. daily, weekly or monthly.
This metric reveals the number of people who click on your ad. Since all conversions begin with a click, clicks can give early insight into the performance of an ad campaign. While it is not advisable to gauge the success of your campaign solely through clicks, you can use them to determine when to pause poor-performing ads or place more bids on well-performing ads.
3. Click-through Rate (CTR)
When people view your Google Ads, they decide whether to click on it or not. This metric only counts the people engaged by your ad, i.e. those who click on it and go to your website. A high CTR is a good indicator of a well-performing ad.
When measuring CTR, look out for ads with high CTR’s and outstanding calls to action or search terms to refine your marketing strategy for an even higher CTR.
4. Cost Per Click (CPC)
CPC is the amount advertisers pay each time their ads get clicked. Some factors that determine this cost include:
- Quality score
- Your maximum bid
- The rank of other ads bidding for “your” keywords
Average CPC typically varies by business type and industry. For instance, competitive industries and businesses with higher-priced conversions have a higher cost per click. Always check your CPC to control your ad spend and traffic quality; otherwise, you may have a negative Return On Investment (ROI).
5. Cost Per Acquisition/Conversion (CPA)
Like CPC, you set your CPA when setting up your Google Ads campaign. CPA shows you how much you spend for each conversion you earn. While this cost should remain as low as possible, not all ad viewers convert after clicking, so the cost could be higher than anticipated.
Ideally, you want your payoff from each conversion to cover each ad’s cost, and have some money left over as profit. If the payoffs from the average conversion are not enough to cover your cost per ad, then your PPC campaign needs some serious adjustments.
6. Conversion Rate
When people click on your ad, they are redirected to a landing page where they are encouraged to perform specific actions, e.g. entering their email, making a purchase, completing a survey etc. Your conversion rate comprises of people who click on your ad, get to the landing page and complete a specific action.
Essentially, conversion rate measures the number of people who become customers after clicking on your ad. This metric is a good ROI indicator because the more your ads convert, the more money you make.
7. Average Position
This metric shows the typical ranking of your ad against other ads. Ad ranking determines the order in which ads appear on a page during a web search. To consistently get your ad on the first page of search results, ensure your ad ranks eighth place or higher.
While it is challenging to have your ad at position 1.0 all the time, averaging position 1-4 will secure your ad a place in the top half of the first page. Averaging position 7.5, on the other hand, will often show your ad at the bottom of the page.
Naturally, ads that rank higher have better chances of getting more clicks. However, do not despair if your ad averages seventh or eighth position, since you may still receive enough traffic and have a conversion rate decent enough to justify your ad campaign. Just do not expect your ad to receive as much traffic as first or second place ads.
8. Quality Score
This metric reveals your reliability in providing people with relevant information. For instance, if a person searching for running shoes clicks on your ad, and lands on a page about flip-flops, your quality score reduces.
However, if a person searches for running shoes, then lands on a page about sneakers after clicking on your ad, then your quality score will increase. A good quality score improves your chances of getting new customers, not to mention receiving discounts on ad costs from Google Ads because of your reliability as a quality source of information.
A good quality score can reduce your Cost Per Acquisition and boost your ROI. Quality score is represented on a scale of 1-10, and five is considered an average quality score.
9. Budget Attainment
This metric shows how close you were to achieving your predetermined budget. Despite the useful information this metric provides on the management of a campaign, most marketers hardly use it. Most marketers never spend within their budget allocations for each campaign because of inconsistent bidding and fluctuations in PPC auctions.
10. Lifetime Value (LTV)
LTV is a projection of the revenue specific customers will generate throughout their lifetime. This metric is a useful indicator of your marketing strategy’s overall health and can provide important information to take your marketing a notch higher.
Using Google Analytics, you can assess various LTV metrics like session duration, page views, revenue and transaction completion per user. The metrics you choose to assess should depend on your specific marketing and business goals. For instance, if you aim to drive more traffic, then you can track page views LTV.