How to Understand Your Paid Search Metrics
Are you running a PPC campaign? Is it working?
Most importantly, how do you know?
Paid search is a promising digital marketing strategy that has the potential to drive growth and produce robust ROI. But there’s no way to gauge the effectiveness of the campaign if you don’t know the metrics that matter.
Today, we’ll briefly review eleven metrics you should know.
Traffic Metrics
In terms of paid search KPIs, traffic metrics help you identify the raw numbers for a campaign. The most critical measurements include:
Impressions – Can be gathered via Google Analytics—they tell you when your paid search ad appears on the search engine results page (SERPs).
Click – A single click occurs after a user clicks on your paid ad and is then taken to your landing page.
Click-through rate (CTR) – CTR measures the ratio of clicks an ad has in comparison to the number of impressions it receives. CTR = Click / Impressions
Cost per click – The average amount you pay for an advertisement on a per click basis.
Average position – The average position where your ad showed up on SERPs.
Conversion Metrics
Conversion KPIs help you see how impactful a paid search campaign is and at what cost. Common metrics include:
Revenue – The total value of orders placed without including COGs.
Leads – Although orders are often the main metric, some PPC campaigns are focused on lead generation. In that case, a lead is counted as a high-quality consumer who is primed for a long-term conversion. Often, a lead is tallied by signing up for something or filling out a form.
Conversion rate – The ratio of the total number of orders or leads compared to the total number of ad clicks.
Revenue per click – The average amount of revenue generated for every click.
Efficiency Metrics
Comparison KPIs let you measure the effectiveness of your campaign, highlighting what’s working and what isn’t. Armed with this information, you can readjust and reoptimize your campaign accordingly. Common metrics include:
Ad costs to sales – A ratio (AC/S) used to measure the profitability and efficiency of the paid search campaign, particularly in terms of maximizing top-line revenue over bottom-line.
Return on ad spend – Similar to ROI, return on ad spend simply flips the ad costs to sales ratio.
Cost per lead/order – Since leads may take a while to pan out, this helps advertisers identify lead values needed to hit profitability goals.
General Metrics
Finally, there are a few generalized metrics that are important for you to know. They include:
Quality score – According to Google Analytics, “Quality Score is a diagnostic tool meant to give you a sense of how well your ad quality compares to other advertisers. This score is measured on a scale from 1-10 and is available at the keyword level.”
Lifetime value – The estimated value of a customer over the long term. This is an important metric since many companies’ most valuable customers—in terms of sales and responsiveness to marketing—are the repeat customers.
Semgeeks—Get the Most Out of Paid Search
To succeed in the competitive world of paid search, you must understand the fundamental metrics of a PPC campaign. Armed with that knowledge, you can run a campaign that not only sells but converts at a cost-effective ad bid.
Are you interested in seeing what a paid search campaign could do for your business?
Reach out today to see how the team at Semgeeks can leverage consumer behavioral data, tracking metrics, and industry expertise to create effective campaigns. As a PPC marketing NJ company, we use data and metrics to inform our marketing strategies. It’s the foundation of our decision making process, and what we look to when optimizing future campaigns.
Sources
Google Analytics. About Quality Score. https://support.google.com/google-ads/answer/6167118?hl=en
