There are so many metrics you can track when running a Google Ads campaign. Yes, having more data at your disposal helps you make more informed decisions, but for someone new to paid search, all the data can be overwhelming. Where do you start? Are some metrics more critical to success?
This article covers some metrics to track to help you make more informed decisions about your marketing strategy.
I’m intentionally ignoring the most popular metrics (eg, clicks, costs, conversions), because while they’re important, they don’t tell the whole story of how your account is performing and why.
Instead, I want to focus on a few metrics that can help provide a deeper understanding of your account performance and improvement paths when used in conjunction with your core KPIs. These metrics will provide additional value and insight, but may not be as useful in a vacuum.
1. Conversion Rate (CVR)
Conversion rate is a fairly easy metric to understand; is the percentage of users who click on an ad and then convert.
While it’s useful on its own, it’s especially useful when used in conjunction with click-through rate (CTR). These two metrics can help highlight which part of your customer journey needs improvement.
CTR is a metric that indicates the quality of traffic you are generating. If your CTR is high, your target users are likely resonating with your product and messaging. If it’s low, you may be targeting the wrong audience or you may need to modify your messages further.
Let’s make it real with an example: Let’s say you have a PPC campaign and the conversion rate is much lower than the rest of the account.
Many things can cause a low CVR, but it probably falls into one of two categories: your Google Ads strategy or your landing page/website. Looking at CVR alone, it’s hard to tell which area needs improvement, but what if you also look at CTR?
If you have a low conversion rate but a high click-through rate, it may mean that your audience is resonating with your ad, but there is a disconnect once they click on the ad and go to the landing page.
In this case, I would focus on improving the customer experience on the website. If they have a low CVR and low CTR, the problem may be with your targeting and your keywords and ad copy may need work.
Dig Deeper: PPC Landing Pages: How to Create a Winning Post-Click Experience
2. Quota of impressions
So, maybe you’ve been running your Google Ads campaigns for a while and things are going well and you’re looking to increase your budget.
Where do you start? Which campaigns have room for growth and which ones don’t? This is where impression share comes in incredibly handy.
Impression share measures the percentage of impressions your ad received compared to the total number of available impressions. Impression share is influenced by two main factors: budget and ad rank. Knowing what limits your campaign is very important.
Fortunately, you can see which of the two is limiting you with the following metrics: Search lost (budget) i Search is lost (ranking).
These two metrics will show you how many shared impressions you missed and why.
Lost impression share due to budget is easy to fix; simply raise the budget. You don’t need to increase your bid, so you’ll likely keep your current cost per conversion if you increase your budget this way. Lost impression share due to ranking means that in order to get that impression share, you need to upload more or improve your quality score.
Back to our original scenario: Using these three impression share metrics is a great way to show where you can easily increase your budget without affecting performance.
If campaigns are showing a large amount of lost impressions due to budget, there’s a great opportunity to increase your campaign budget without sacrificing your cost per conversion.
If most of your lost impression share is due to ranking, you’ll need to consider where it pays to be more aggressive in your bidding, or if you want to increase your budget.
Dig Deeper: How to get impression share insights to increase your PPC performance
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3. Lifetime value
Okay, I cheated a little. Lifetime value isn’t a metric you can find in Google Ads, but it’s worth finding out, especially if you have a business with repeat customers.
Lifetime value is exactly what it says: it’s the total value of a customer over the course of their relationship with your business. This means different things for different industries.
If your business sells socks, this includes repeat buyers. If you sell a subscription, calculate how long the average user is subscribed before canceling. If you sell higher-priced services (like a marketing agency), consider the average contract size and average duration.
Calculating this for your brand is an incredibly valuable exercise that can largely dictate what PPC success looks like. Let’s illustrate this with the socks example I mentioned:
A company that sells socks creates a Google Ads account and sells socks for $10 a pair. He knows that to be profitable, he needs at least a 3:1 return on his ad spend. They optimize the account to try to get a 3:1 return on each purchase.
Finally, they decide to calculate the lifetime value of a customer and realize that the average customer ends up buying ten times more! Now that they have an LTV customer, they are comfortable with a lower initial return because they know that each purchase leads to more purchases in the future.
The account strategy was completely changed with the addition of a metric. Without LTV, the account manager couldn’t accept a lower return because they didn’t have enough data to rationalize it.
But once you add lifetime value to the equation, you have the data to back up more aggressive strategies that, while less profitable initially, will help you grow more over the long term.
Dig Deeper: How to increase LTV with PPC
Optimize your Google Ads campaigns by tracking these metrics
All Google Ads metrics are useful in one way or another. It’s very easy to see the value of some (more conversions = good!), but some require a little more context.
The more metrics you can use to make informed decisions, the easier it will be to assess problems and better set yourself up for success.
Deeper: Setting PPC Goals: How to Tailor KPIs and Metrics for Each Stage of the Funnel
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