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If you want to manage PPC ads for your business or your clients, you need to know what works for your campaigns. You can't evaluate your campaigns without tracking and measuring the right things. So, you will read nine metrics you would want to track right now.
1. CPC (Cost Per Click)
CPC is the money that you pay for every click you get. It is one of the most important metrics that will determine your campaign's total cost or how much traffic you get. The total cost of your campaign is your total clicks multiplied by the average cost per click. For example, if you have an average CPC at £1 and get 1000 clicks, you will pay £1000.
Google Ads use the CPC of your ads to figure out your ranking position and the views you will get. While it is not the only ranking factor, you can't get views if the CPC is too low. You can set a budget and a CPC for your ads when you set them up. But you may need to adjust the CPC to get more views in the future. The average CPC depends on your industry and the competition that you target. If your ads don't appear on the first page or can't outrank a competitor, you should consider increasing your CPC.
2. CTR (Click Through Rate)
CTR is a metric that shows you often your ads get clicks. A high CTR is a strong indicator that your ads work. On the other hand, a low CTR means that you need to make changes to your ads. You can calculate the CTR by dividing the total clicks of your ads by the impressions. For example, if you get 100 clicks from 1000 impressions, your CTR is 10%.
CTR varies in each industry, so it is not easy to give a clear number that could be a good CTR. However, a study in different industries shows an average CTR from 2% to 6%.CTR is affected only by the visible part of your ad on the search page. The copy of your ad and your extensions are the only parts that will affect your CTR. Most PPC experts test different versions of their ads to get the best possible results.
3. Quality Score
Quality Score shows how relevant your ads are to the targeted keywords. Google Ads uses different metrics and factors to figure out the relevancy of your ads. Quality Scores vary from 1 to 10, depending on that relevancy. Good Quality Score is seven or more.
You want a good Quality Score to get better rankings for your ads. High rankings mean that you will pay less money to get views and clicks. This is why so many marketers focus on the Quality Score, even if some advertisers don't know how to improve it. If you want to improve your Quality Score, you must improve all the parts of your ads. For example, a high CTR shows that your ads get clicks and conversions most of the time.
You need a relevant landing page where the visitors can find what they want. Google Ads have different criteria to figure out the relevancy of the landing page. Lastly, other factors like user experience and your previous performance on Google Ads affect your Quality Score.
4. CPA (Cost Per Acquisition)
Instead of a CPC bidding, you can set a CPA bidding when you set up your campaigns. An acquisition is a conversion that you get when a visitor takes a specific action. So, the average CPA is the amount you pay per conversion or customer that you acquire. You can calculate your CPA by dividing the total cost of conversions by the total number of conversions. For example, if paid £1000 for 20 conversions, your average CPA is £50.
Google Ads allow you to set up a bidding option that is called Targeted CPA. In this option, you set a target CPA, and Googles tries to provide you as many conversions as possible that cost up to your target CPA. Finding your target CPA can be confusing. You must know how much value you can get from each conversion and then decide on a profitable target CPA. For example, you can increase your target CPA when you can get returning customers because each conversion's profit is higher.
The goal of every business when they create PPC campaigns is to get conversions. A conversion can be completed when you get a sale, an email address, a phone call, etc. The advertiser decides what counts as a conversion.
Conversions can be tracked when people reach a specific page that is triggered. If your goal is to get an email address, a conversion can be added when someone visits the thank you page. When we measure conversions, we want to know the exact number of people that took the desired action. But we also use it to calculate other important metrics like the conversion rate.
6. Conversion Rate (CVR)
The conversion rate is a strong indicator of ad performance. If you have a low conversion rate, you probably spend too much money on each conversion. Many businesses hire PPC experts to improve this metric alone and get more customers.
You can easily calculate the conversion rate by dividing the total number of conversions by the total number of clicks. The conversion rate is always a percentage. If you get five conversions per 100 clicks, your conversion rate is 5%.
Most marketers optimise their ads for clicks. While clicks are the first part of the process, they are not enough. Clicks without conversions are a waste of money and opportunity. You also need to optimise for conversions. Many things can create a low conversion rate. You may need to improve your landing page, your copy, remove some keywords that don't work, or make a different offer. When something goes wrong on your campaign, the conversion rate will be low even if other metrics look normal.
7. ROAS (Return On Ad Spend)
ROAS is a metric that shows how much money you get back for each dollar you spend. ROAS is a metric that you can find only in PPC. In other marketing and advertising methods, marketers are more familiar with the term ROI (return on investment).
So, ROAS is the return you get from your ads. You can calculate it by dividing the profit from your ad campaigns by the cost of that of your campaigns. Many marketers focus on this metric because it tells them if they make money from their ads. It also shows you what you can expect from your ads and if it is worth scaling them.
8. AOV (Average Order Value)
It is a simple but important metric that shows you the value of your orders. If you want to calculate it, you can divide your revenue by the number of orders. If your business has £1000 revenue and 50 orders, the AOV is £20.AOV is important because it helps to analyse and evaluate your strategy. You can estimate each customer's value, adjust your pricing, and set the right bids for your ads. If you are not aware of the average order value, you don't know if a bidding strategy is profitable.
When you improve the AOV, you increase your business's revenue instantly because there is a cost on each order. Of course, we assume that you keep the same number of sales and customers. Businesses use different techniques to increase AOV, and many of them can be combined with your PPC Ads. For example, you can set a funnel with upsells or extra promotions in the future.
9. Impression Share (CPM)
When you set up a campaign, you expect to have impressions to make sure that people see your ads. Impressions alone do not mean that your ads generate revenue. Impressions without clicks and conversions have no benefits.
However, impression share is an indicator that the campaign works. It shows you how many from the total impressions your campaigns are getting. This metric is a percentage that is calculated by dividing the total impressions of your campaign received by the total number of impressions of the targeted keywords.
If you have a 50% on a campaign, it means that all your competitors get the rest 50% of impressions. When you target branded keywords, the impression share can be much higher. When your impression share goes up, the impression share of your competitors goes down. It is a metric that affects your and your competitors. It can also be affected by changes of your competitors that target the same keywords.
When you run PPC campaigns, you should track these nine metrics above. At least, you should track most of them. When your campaigns don't get good results for any reason, these metrics will allow you to figure out the problem. You can also use them to figure what works for you and when to scale.