By Elliot Smith, Account Director, Launch
Pay-Per-Click (PPC) campaign metrics help us understand what is really happening in our digital marketing campaigns. Why does that matter? It’s simple really: if we don’t know how customers are behaving, we can’t optimise for them. Understanding these metrics can also give your ROI a healthy boost. In this blog I’ll guide you through seven PPC metrics you should have an eye on, and how to make the most of them.
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Why is Tracking PPC Campaign Metrics Important?
Tracking PPC campaign metrics is not just about counting clicks or conversions; it’s about gaining actionable insights into your marketing performance. Knowing which metrics to monitor can help you allocate your budget more effectively, improve your ad targeting, and ultimately drive more valuable traffic to your site. By focusing on key performance indicators (KPIs) like conversion rate, return on ad spend (ROAS), and cost per acquisition (CPA), you can make informed decisions which enhance your campaign’s efficiency and effectiveness.
What We Mean When Referring to PPC
PPC, or Pay-Per-Click, is a digital advertising model where advertisers pay a fee each time their ad is clicked. It’s a way of buying visits to your site rather than attempting to earn those visits organically. Google Ads is one of the most popular PPC platforms, offering a range of tools to help businesses target their audience more precisely.
However, managing PPC campaigns effectively requires a deep understanding of various metrics and how they influence your advertising goals. This blog – which focuses on Google Ads – will guide you through the intricacies of PPC metrics, helping you to leverage them for maximum impact.
Now, let’s dive into seven core PPC metrics you need to track and why they matter for your advertising success. From conversion rates to engagement rates, each metric plays a vital role in shaping your strategy and ensuring you get the best possible results from your PPC efforts.
7 Most Important PPC Metrics
1. Conversions
Why are conversions important?
Conversions are the main reason you’re using Google Ads, right? I guess you could argue the main reason is for traffic, but those clicks and spend mean nothing if you can’t attribute actions or sales back to it. You may as well set up a billboard next to the motorway and cross your fingers.
What Am I Looking For?
It’s important to make sure your conversions are tangible. What data or behaviours do you need to track that will make an actual impact on business? I’d argue it’s sales if you’re ecommerce or form fills/phone calls if you’re lead gen.
That said, it doesn’t hurt to track some softer conversion actions such as clicks, scroll depth, brochure or whitepaper downloads. Tracking these will help train smart bid strategies, especially if your main or ‘hard’ goals are lower volume.
Beware, though, tracking these can skew data and make other metrics such as CPA look waaaaay better than they actually are.
Top Tips & Recommendations
Bonus tip: to get around skewing your data, set softer goals to secondary so smart bidding doesn’t actively try and achieve them, but you can still see how many of these types of conversions your ad account is achieving under the ‘all conversions’ metric.
2. Conversion rate
Why is conversion rate important?
Conversion rate measures the number of users who converted as a percentage of the total number of users that clicked on your ad. I’d argue this is the number one metric to base decisions on as it tells you how effective your campaigns are at driving action towards your goals.
What Am I Looking For?
It’s worth remembering that getting a high volume of conversions is fine, but is it proportionate to the amount of traffic your campaigns are driving?
Top Tips & Recommendations
You can give all your budget to the campaigns with the most conversions, but if they’re also driving a high amount of traffic they may also be spending the most so you might not be spending efficiently. Try and push your spend into the campaigns with the highest conversions rate and, therefore, the highest success rate.
3. Return on Ad Spend (ROAS) / Cost Per Acquisition (CPA)
Why are ROAS and CPA important?
You’ve looked at how well your campaigns are converting. The next question is – how profitable, or how valuable are they? ROAS (revenue earned for each pound you spend on advertising) and CPA (the cost incurred to achieve a single action on the site such as a form fill or phone call) are the metrics you need to work that out.
What Am I Looking For?
Monitoring ROAS if you work in ecommerce is an easy way to see how much you’re getting back for each pound spent. The higher the ROAS the better but, equally, the higher the ROAS the less sales your campaign may be driving as it’s being trained to target higher value sales. It’s all about finding the right balance (your PPC agency can help you with that).
If you’re running lead gen campaigns you’re more likely to be monitoring CPA – how much is each ‘acquisition’, be that a form fill, phone call or something else, costing you on Google Ads?
For both of these, a bit of reverse engineering is needed to work out how much you can afford to be spending to achieve a sale or form-fill/phone call.
Top Tips & Recommendations
If you’re running lead gen campaigns, then consider moving to a VBB (value-based bidding) model to allow you to measure ROAS. You do this by calculating true or proxy values for each of your actions (e.g. a form fill is worth £100 to you, a phone call £50, a download £20) and assigning these figures to your conversions. This allows Google’s smart bidding to dynamically bid to try and achieve more of the higher value conversions, in this case form fills (perhaps another blog for another time…!)
4. Top/Absolute Top Impression Share (IS)
Why is impression share important?
IS has always been a popular metric. What does it tell you? As a percentage, how many eligible auctions your ads are appearing in.
What Am I Looking For?
In an age of smart bidding it’s become harder to use IS as a metric to thoroughly optimise with as the bid strategies may not show ads in some eligible auctions, e.g. if the user isn’t showing the right intent or right signals to suggest they will land on your site and convert.
Top Tips & Recommendations
Try concentrating more on top and absolute top position IS. This is the replacement for the average position metric which was sun-setted in 2019. Top IS will tell you how often your ad is appearing in the ‘top results’ in eligible auctions (i.e. above the fold) whereas absolute top tells you how often your ad is in the very top position.
Monitoring these metrics can help to explain sudden peaks and troughs in traffic and cost per click, as well as giving clues to competitor activity. E.g, has your top IS decreased? It could mean a competitor is being more aggressive with their bidding and pushed you further down the page (check auction insights for more info on this!)
5. Cost Per Click (CPC)
Why is CPC Important?
Although an important metric, CPC (how much it is costing to get a single click on your ad) perhaps doesn’t carry the weight that it used to thanks to smart bidding.
Smart bidding brings much more fluctuation to the auction, bidding aggressively on searches that it believes will bring a conversion, and much lower (or not at all) for searches that it doesn’t believe will convert.
What Am I Looking For?
CPC has become more of a metric to help with troubleshooting e.g. have conversions dropped but cost remains the same? Check your CPC – you might be getting less clicks, and therefore less conversions, due to an increase.
Top Tips & Recommendations
CPC is very handy for monitoring Pmax campaigns as it can give clues as to where your budget is being spent. Low CPC? It’s probably being spent on display and video. High CPC? It’s probably being spent on search and shopping.
6. Budget Utilisation Rate (BUR)
Why is BUR Important?
A sneaky custom metric here! This metric tells you as a percentage how much daily budget your campaign has been using in any given period.
E.g. your campaign has a daily budget of £50 but over the past seven days has a BUR of 75%. It’s therefore been averaging a daily spend of £37.50 in that time.
What Am I Looking For?
BUR is a really quick way of seeing where you may be underspending and which campaigns you can shift budget to.
Top Tips & Recommendations
To set BUR up, go to custom columns in Google Ads and enter the following formula:
- Cost:last 30 days / 30 / daily budget
- Note that 30 days can be changed to however many days you want. If you have a high volume account you may want to change this to 7 or 14 days to ensure you’re looking at more up to date data
7. Engagement rate
Why is engagement rate Important?
Engagement rate is the percentage of engaged sessions that you are achieving on your site. An engaged session is a session that lasts more than 10 seconds. It can help you understand if your campaigns are capturing the attention of your target audience.
What Am I Looking For?
Import GA4 metrics into your Google Ads account and you’ll find some engagement metrics such as engaged sessions and engagement rate.
Top Tips & Recommendations
Remember bounce rate in Universal Analytics and how you’d wince at a high figure? This is the opposite – the higher the figure the better as it’s showing a higher proportion of your traffic is engaged and therefore the traffic you’re reaching on paid is high quality!
In summary
With so much data around PPC campaigns at our fingertips it is not always clear where to find the answers and insights you need. Focusing on the key metrics above, and knowing how to use them, can help you get to grips with how to interpret what you’re seeing, and to optimise your campaigns to engage the right customers at the right point in their journey.
If you need any more advice on PPC metrics, our team would be happy to hear from you, just get in touch!
