Most people don’t know which Google ads metrics to look at when running ads. Most people just run ads while not even bothering to change their metrics, or even define the KPIs that they will be measuring. This leads to a situation where one is just wasting marketing ₹₹₹.
The thing with Google ads KPIs or metrics is that it depends completely on the project. Every marketing campaign is different and it will need you to define different metrics
These are no perfect KPIs or metrics that you can look at, instead use this post as a starting point and build on it.
1. Cost Per Conversion
This is the single most important metric that EVERY company should be looking at. Whether you’re into e-commerce, B2B manufacturing, B2C retail, local service, non-profit, or any other sector, you need to know this number.
This metric is simple to understand: It basically tells you how much you’re spending to get one customer/conversion.
When it comes down to it, you want to use your marketing budget as effectively as possible, and the best way to do this is to compare the conversion costs of different Google Ads campaigns.
Not all conversions are created equal and conversion can take different forms. A conversion could be anything like a lead magnet download, a store purchase, booking a consulting call, etc. Each of these would have different benchmarks & would be compared according to those.
ROAS stands for Return on Advertising Spend and it means exactly what it sounds like, how much money are you getting in return for your advertising efforts. ROAS is the ultimate metric to look at.
There’s a simple formula to find ROAS:
ROAS = ₹ spent on ads / ₹ received from ads
In order to find a true ROAS number, you need to keep track of your deals and sales and track where these customers/leads came from.
Sounds simple, but there are lots of variables.
Perhaps you have a very long buying cycle and gained leads from ads, but they are at the top of the funnel and far from paying you any money. Or perhaps someone’s initial interaction with your site was through ads, but they finally purchased after interacting with a social media post that sent them to your website.
Should you attribute that revenue to ads or social website traffic? These are the decisions your team has to make.
3. Conversion Rate
This is also an important Google ad metric to look at.
Conversions / Clicks the ad receives = Conversion rate
While campaign managers always have an eye on conversions, they will often set up campaigns to optimize for clicks rather than conversions (this can be set within Google ads).
You can now aim for conversions based on CPA goals rather than focusing on clicks or impressions. However, to be eligible to optimize for conversions, your account must have had at least 15 conversions in the last 30 days.
Of course, you can also view the conversion rate for individual keywords or ad groups within your Google ads campaigns.
You can test out different variations of your landing page, make smaller changes within your landing page, change the CTA on your Google ad, and a lot more. Even a 1% increase in conversion rate could lead to a massive increase in sales.
4. Clickthrough Rate (CTR)
The clickthrough rate basically tells you how many people saw the ad and decided to click on it. This again has no proper benchmark and depends on the type of marketing that you’re trying to do.
You want a high CTR, but when it comes to Google Ads, you only pay for clicks, so if you use language in your ads that weeds out unqualified clicks, you may see a lower CTR.
However, remember not to let it drop too low otherwise, the ad’s quality score could be affected, so you do want to keep eye on this and make sure your ads are still relevant to the targeted keywords.
5. Cost Per Click (CPC)
Cost per click is how much you pay per click (pretty self-explanatory).
This is an interesting metric though because many think there’s not much one could do to change this. However, well-optimized campaigns should lead to a declining CPC over time. Over the course of a year, you should hope to see your CPC drop by 10% or so.
When building their Google Ads campaigns, marketers know set budgets and know roughly how much they can allocate to their PPC campaigns. Unfortunately, just because you’ve determined your budget and bids in advance, it doesn’t mean this is what you will spend.
The price of the bid depends on other advertisers you need to compete with during PPC ad auctions. Therefore, you will need to pay a higher bid price.
Looking at any one of these metrics alone will not give you the needed answers for optimizing your campaign, but at a universal level, each one can point you in the proper direction towards understanding:
- Why the numbers are what they are
- What needs to be addressed
All the answers to these questions would help you decide what metrics would be beneficial for your business, and how to employ them to maximize their potential.
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