When working with Google Ads (formerly known as Google AdWords) you'll face a lot of numbers and Google Ads metrics.
For a beginner, this can be frustrating and overwhelming but in this article, I will introduce you to 9 of the most important Google Ads performance metrics.
Google Ads metrics are the indicators you need to track in order to know if your Google Ads campaigns worked out or not, they give you insight on your ad performance, and what to do next!
You should always start by defining the overall goal of your advertising. This goal is, for the vast majority, about your bottom line; getting more sales and overall revenue, but it can also be to increase brand awareness for example. It's really important that you define this goal first, in order to determine which KPIs and metrics to look at when evaluating your Google Ads campaigns.
To me, the core of Google Ads is data. In order to keep your performance at a high level, you need to analyze and interpret the data you get. You must customize your Google Ads account including search queries, ad copy and negative keywords in order to fit the trends from your Google Ads data analysis. And just to be clear: you will need to update, and customize your setup an infinite number of times.
It's also crucial to have an easy-to-understand Google Ads report filled with just the right KPIs for your business. Ideally with your own colours and overall vibe, like this white-labeled report from DashThis:
You can also start with a preset Google Ads report template, already filled with all these KPIs and more.
Return on Ad spend (ROAS) is one of the very first metrics I would look at in order to get an overview of recent PPC performance. ROAS is the ratio of our costs in Google Ads to the revenue generated.
Let's look at an example:
Total cost: $ 500
Conversion value (revenue): $ 3000
ROAS = 6
(3000 / 500 = 6)
Basically, ROAS is our return every time we spend $ 1 in Google Ads. With a ROAS of 6, we generate $ 6 in revenue each time we spend $ 1 in Google Ads. Return on Ad Spend is without a doubt one of my favourite Google Ads metrics.
If you're not an e-commerce shop, you should track relevant leads. Let's assume that you work as a photographer and your business goal is Phone Calls from your ad campaigns in Google Ads. In this case, we should look at price per acquisition/conversion, as we cannot calculate a ROAS (no revenue figures).
The cost of each conversion is very different from industry to industry as competition, average cost per click, and conversion rate on the landing page are paid search metrics that will influence the results.
Return on Ad Spend and Cost per Conversion is without a doubt two very important Ad performance metrics to look at, but it does not tell the whole truth. As ROAS simply tells you about the cost-to-revenue ratio, it's important to look at the total number of conversions.
A conversion can be defined as many different things but basically, it should be an action that creates value for our business. You'll need conversion tracking which can easily be set up via Google Analytics in order to count the number of conversions.
The number of clicks (ad click) is also important to look at in order to gain an understanding of the volume in a given time period. Clicks are the essence of Google Ads and it is, therefore, essential to look at how many clicks have been purchased during the period.
Conversion Rate is the ratio of clicks and conversions. It's important to keep an eye on this metric as it's one of the most important metrics for your business. As you pay per click a low conversion rate can be a big challenge.
If you have a very low conversion rate (0,1-0,5%), it might be difficult to generate a reasonable Return on Ad Spend as we'll have too high costs for every sale.
You should compare the conversion rate from Google Ads with other channels in Google Analytics. The traffic from Google Ads should be potential customers ready for purchase (this depends on your campaign goal) and therefore the conversion rate should be at a fair level.
By looking at the number of impressions, you get an overview of which campaigns getting the most exposure on search results pages and for display ads. We will often experience a lot of impressions with advertising at the display network, and this is especially interesting if your campaign goal is brand awareness.
In addition, I would like to mention the PPC metric Search Impression Share. This metric is a percentage of your impression share for a given campaign, ad group or keyword.
Click Through Rate is the ratio of views to clicks. You should always keep an eye on this KPI as it shows how appealing your ad is to your audience. Ask yourself whether your ad text is interesting for your target group or your banners are trustworthy? Maybe a few small changes can improve your performance?
You should always test different ads to find the constellation where you have the highest CTR. Basically, you want to figure out what your potential customers respond best to. A high CTR is really what you are aiming for.
What about Ad Position?
The total conversion value is relevant to keep an eye on as it can easily increase and decrease even though the number of conversions is unchanged.
How is that?
All e-commerce shops should work with their average order value (basket size) so the total conversion value over time can grow without the number of sales increasing.
This metric might be a little overlooked by some advertisers and that is really a shame. When you work with your Quality Score, you can significantly reduce your costs and that's essential in order to have a profitable business.
At Obsidian Digital, we have a structured framework we use every time to build new campaigns in order to secure a high Quality Score for each keyword.
You can examine your Quality Score for each keyword and should take a closer look at the three core elements:
1) Landing page experience (your web page)
2) Ad relevance
3) Expected CTR
You should look at these elements in order to identify your focus areas.
Get these 9 Google Ads metrics under your skin. They are absolutely essential in order for you to understand and evaluate your PPC performance. You can always look at other metrics like bounce rate or industry benchmark to dive deeper into your performance and understand your audience better.
It's actually very easy, simply create a PPC report with all your Google Ads data automatically updated every day, like this one:
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