Google Adwords is an extremely powerful online advertising platform. It allows users to create large advertising campaigns that target specific keywords and audiences. Adwords also provides detailed metrics to help you analyse the performance of each pay-per-click (PPC) campaign that you create.
In fact, there are so many metrics available that it can be easy to become confused about which values really matter! This post will identify eight vital Google Adwords metrics to monitor if you want your campaign to succeed.
Metric #1 — Return on investment (ROI)
The whole point of advertising on Google Adwords is to increase the overall profit of your business. Your advertisements must provide a positive return on investment for the campaign to be truly successful.
Adwords have made tracking ROI easy by providing conversion tracking. To calculate your ROI, use this simple formula: ROI = (Revenue – Cost of goods sold) / Cost of goods sold.
For example, let’s say you made $1,200 of Adwords-driven sales in a month. You spent $200 on Adwords, and the goods cost you $500 to purchase. Your ROI would be ($1200-($600+$200))/($600+$200), or 50%. Once you have an ROI figure, you can compare it to other advertising techniques that you are using.
You will need to set up conversion tracking (Watch this video), then compare Conversion Value data with Ad Spend data combined with your internal costs.
Metric #2 — Conversion rate
Your conversion rate is the number of users that have clicked an advertisement, visited the landing page, and completed a call to action (CTA). Your CTA might be the submission of a form, completion of a purchase, installation of an application, or any other trackable goal.
The conversion rate is an important metric to watch because it’s the culmination of your user targeting, Click Through Ratio (CTR), and landing page. If you have a high CTR but a low conversion rate, it usually points to an issue with the landing page. However, it can also indicate that a poorly targeted advertisement is attracting the wrong kinds of users.Â
Watch your conversion rate closely as you make changes to the landing page, the content of your ads, the targeting of your ads, and to the keywords that you’re using.
Metric #3 — Quality score
The Quality Score of your advertisements has a huge impact on the cost and effectiveness of your campaigns. The Quality Score is a combination of your click-through rate, the relevance of each keyword to its ad groups, the quality of the landing page, the significance of your ad text, and much more.
In simpler terms, its Google’s score for how relevant and well-planned your advertisements are. If your Quality Score is low, your conversion rate will also be low. Google will begin to charge you more for poorly performing adverts, so check your Quality Score on a regular basis. Learn more about Google Adwords Quality Score.
Metric #4 — Click Through Ratio
Your Click Through Ratio (CTR) is the number of clicks that your advertisement receives divided by the views that it receives. A high click-through ratio means that many of the people who view the ad have clicked it. Having a high CTR will increase the quality score of your advertisements. To achieve a higher CTR, you will need to improve the quality of your advertising, keywords, and targeting.
Metric #5 — Average Cost Per Click
Adwords lets you view the average Cost Per Click (CPC) of each of your advertisements. By keeping an eye on this metric, you will be able to tell if Google is starting to incrementally increase the cost of your ads. Some advertisements may reach a point where they are no longer cost-effective, and you have to pursue other keywords or advertising channels.
Metric #6 — Impression Share
Adwords has a group of Impression Share metrics which provide excellent insight into the effectiveness of your campaigns. They include:
- Search impression share: These are impressions that have occurred on the Google’s search network.
- Search lost impression share (budget and rank): This is the number of search impressions that you have missed out on because your budget was too small or your ad rank was too low.
- Display impression share: Your share of impressions on the Display network.
- Display lost impression share (budget and rank): This is the number of display impressions that you have missed out on because your budget was too small or your ad rank was too low.
- Search exact match impression share: This is your share of impressions for exact search term matches.
Keeping an eye on your impression share will help you spot underperforming ads, then make changes to their budget, design, or keyword targeting. It is a simple way to obtain more impressions, clicks, and conversions.
Metric #7 — Average Position
The average position metric will tell you where each ad is displayed within Google’s results. The higher this number is, the better – this is because your ad will be positioned above other ads, giving it more exposure and more clicks. Keep an eye on this metric to understand which advertisements can be improved.
Metric #8 — Impressions
The impressions are the number of times that your ad has been displayed to a user. It’s a useful metric because it tells you how popular your keyword choices are and helps to verify that you are choosing the right keyword groups. If the number of impressions you are receiving seem unusually low, it may indicate a keyword targeting issue or insufficient budget. The impression metric works well in conjunction with other metrics, helping to give them additional meaning.
