Managing Google AdWords campaigns can be time-consuming and expensive if not done correctly. This is because you will pay Google each time a customer clicks on your ad.
While this is an excellent opportunity to drive qualified traffic to your site, it also opens your business up to spend lots of money if your Google Ads campaigns are not optimized regularly.
Google Ads is a great marketing channel because you have unprecedented control over your ads with many metrics available for tracking and analyzing the effectiveness of your campaigns. However, just like everything else, having a lot of metrics to review can make the entire process overwhelming and confusing if you do not know what metrics matter most and what those metrics mean.
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It is critical to focus on a handful of key metrics that give you meaningful insight into what’s really working and what isn’t so you can optimize and manage your Google Ads properly.
Our Google AdWords management services have worked with many companies over the years to handle PPC outsourcing, and we wanted to provide the top 5 metrics that will give you a clear overview and help you measure the performance and success of your Google Ads campaign if you are looking to run your own campaigns.
1. Click Through Rate (CTR)
The CTR of your campaign is an indicator of how relevant your ads and keywords are to your target audience. Think of CTR as the 5,000-foot view of your account’s performance since this metric reflects how many people are clicking on your ads.
How Is Click Through Rate Calculated In Google Ads?
Click Through Rate (CTR) = Number of Clicks ÷ Number of Impressions.
You may find that merely testing new ad copy, optimizing keywords, and applying geotargeting to your accounts can boost CTR and the overall health of your campaigns!
In most cases, the Click Through Rate of ads and keywords can have the most significant impact on Google AdWords campaigns. This is because CTR indicates how relevant and compelling ads are to the target audience, and you can look at CTR as a way to find ads and keywords that need to be improved from the perspective of your customers.
Why Is Click Through Rate Important?
If your keywords and ads have a high CTR, then you can often expect your campaigns to have a good Quality Score (QS). While this is not always the case, you can look to CTR as a metric to further investigate if you see high Cost Per Click (CPC) or low engagement with your campaigns.
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Our team always looks at CTR whenever we are troubleshooting an issue because this metric provides a lot of direction as we look for more specific problems holding back the performance of an account.
2. Quality Score (QS)
Quality Score (QS) is Google’s way of measuring the relevance of keywords. Google’s main objective is to provide the most relevant and valuable information to online searchers, and you can use QS as a way to measure how much Google trusts your ads compared to your competitors.
How Is Quality Score Calculated In Google Ads?
Quality Score = Keyword relevance, and relevance, and URL relevance + User experience
Besides, QS is a way to make sure that your ads are providing a positive experience to searches, and that your campaigns are relevant to search queries. Some of the advantages of a higher Quality Score include:
- More Clicks
- Lower CPC’s
- Higher ad placement on SERPs
- Higher conversion rates
Google uses QS to determine how often your ads show, where they show, and how much you pay for each click. Google’s algorithm uses several inputs to decide on QS, including:
- The CTR (click through rate) of keywords and their corresponding ads
- The relevance of keywords to their ad groups
- The importance of keywords and ads to search queries
- The quality of the landing page associated with each ad group
Why Is Quality Score Important?
As you can see, QS is a valuable metric that you should frequently refer to when optimizing your accounts. You should always keep your QS above a 5 (4 should be the absolute minimum) unless your Google Ads strategy involves keywords and ad groups that target competitor terms.
3. Conversion Rate (CR)
Conversion Rate (CR) refers to the Number of people who clicked your ads and proceeded to complete the desired goal on your landing page. This is often achieved when a customer makes a purchase, but you can define several goals like email signups and filling out a form.
How Is Conversion Rate Calculated In Google Ads?
Conversion Rate = Number of conversions ÷ Number of visitors.
The ultimate goal of a Google Ads campaign is to drive more conversions. This is because PPC marketing is a direct attribution marketing channel that relies on user intent. It is the job of keywords to get your ads shown, the role of ads to get people to click and go to your landing pages, and it is the job of your landing pages to get your customers to convert.
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A healthy conversion rate means that the money you’re spending is actually generating profits (return on investment). Most industries consider a Conversion Rate of 1-3% success, but this measurement of success will depend on your specific industry and customer base.
Why is Conversion Rate Important?
You want to consider your account’s Conversion Rate because not only does it speak to how well your keywords, ads, and landing pages are performing, a high Conversion Rate also reduces your Cost Per Click. This means that by driving qualified customers to optimize landing pages, your business can enjoy more sales while also spending less on each click.
That is a win-win for your business!
You can improve your conversion rate by learning how to optimize landing pages and ensuring that your target keywords are on the landing page. Your target audience should know they are accessing a relevant page for their query.
4. Cost Per Conversion (CPC)
The amount of money you spend each time someone converts through PPC marketing can be tracked with the Cost Per Conversion (CPC) metric. Unlike other metrics, this reporting metric takes into consideration the actions of your customers throughout the entire process and can give you insight into opportunities to improve User Experience on your landing pages.
How Is Cost Per Conversion Calculated In Google Ads?
Cost Per Conversion = Total cost ÷ Total actions
You should not overlook Cost Per Conversion because this Number tells you how much money you are spending on each Conversion. If you are spending lots of money to acquire new leads but not hitting a set margin based on your products or services, then your Cost Per Conversion will be high. It’s a calculation of the cost you incur to achieve your desired outcome, such as acquiring a new registration or a new customer.
CPC is crucial to the success of your marketing campaign, and you should always refer back to this metric as you look to optimize your Google AdWords management strategies.
The difference between RPC (Revenue Per Conversion) and CPC (Cost Per Conversion) Is profit.
Why Is Cost Per Conversion Important?
A lower CPC means that your campaign is more profitable, which allows you to push more volume. Cost per Conversion is affected by various parts of the conversion funnel such as the price per click and the conversion rate of your landing page.
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If you’re paying more to acquire a new client than that client is actually worth to your venture, then your Google ads campaign is failing because you’re not attaining ROI (return on investment).
5. Search Impression Share
Search Impression Share shows you the potential Number of Impressions that your campaigns are eligible to receive. Also, this metric shows you the estimated demand for a specific product in Google and how you stack up to your competition’s PPC marketing efforts.
How Is Impression Share Calculated In Google Ads?
Search Impression Share = Number of impressions received ÷ Maximum a potential Number of ideas you’re eligible to win.
If you are suffering from low Search Impression Share, then you can assume that your account is under-optimized that you are missing opportunities. You can look at Search Impression Share as a way to understand the broader market, and this is a valuable way to see how your broader PPC marketing strategy is working along with other available metrics.
Therefore, if there are 200 opportunities that an ad could show (based on the specified criteria) and it shows 150 times, the search Impression share is 80%. Therefore, you want your ads to be displayed for every available opportunity and push the search impression share as close to 100% as possible.
Why Is Impression Share Important?
It is essential for your ad campaign to perform well at all levels to achieve objectives such as selling more products online or getting high-quality leads. This is where Google ads campaign metrics come into the picture.
You can only get close to your goals with ads by identifying key Google Ads campaign metrics and monitoring them regularly to tweak your ads accordingly.
How To Get The Most Out Of Google AdWords Metrics For Optimizations
You can look over your Google AdWords account to identify opportunities to improve your performance and improve your marketing efforts. Be sure to check CTR, CPC, Impression Share, CR, and QS to reduce wasted spend and drive more conversions today!