PPC can be a challenge to measure, but not impossible. There are many different ways you can track performance, and it all comes down to what you’re tracking and why. Tracking the right KPIs will help you understand what is working and what isn’t so that you can tweak your strategy accordingly. A great PPC account manager, for example – UAWC agency, should be able to provide you with various types of reports on a regular basis. If they don’t, then you might want to find another PPC agency. The type of reports that an account manager provides you with will tell you how well your PPC campaigns are going. You may feel like there are too many KPIs out there, but that’s not really true. It just feels that way because there aren’t one or two main KPI options for measuring performance in PPC ads; there are many different ones! Here are some of the most common:
The Average Click-Through Rate
This is the most common PPC metric. The average click-through rate shows you how many people will click on your ad compared to the number of times your ad shows up. For example, if you have an average click-through rate of 2%, that means that 2% of the people who see your ad click on it.
The click-through rate is important because it is the main indicator of whether your ads are attractive enough to draw people in. If your ads aren’t appealing enough to get clicks, you’re not going to make any money. You can use the average click-through rate to figure out what kinds of ads are working and what types aren’t. You can also compare it month to month to see how your numbers are improving or declining. The average click-through rate can also be broken down by different types of ads, which is helpful for figuring out which ones are working best and which ones need improvement.
Impressions and Visibility
As someone who loves numbers, you’re likely aware that impressions are one of the most important PPC metrics. We’ve already learned that the average click-through rate is the number of people clicking on ads compared to all of the ad displays, but what about the number of times ads are displayed? This is where impressions come in. They’re the number of times your ad has been displayed.
Visibility is similar to impressions, but it’s actually more important. Visibility is the percentage of times your ad has been displayed compared to the total number of ad positions. For example, let’s say that you have four ad positions on a search engine page: two at the top and two at the bottom. If you have 400 impressions, that means that 8% of people who see the page will see your ad. Visibility is one of the most important metrics for both SEMs and advertisers.
AdWords ROI and AdWords Quality Score
ROI stands for “return on investment,” and it’s an important number to track in PPC. Your AdWords ROI is the amount you’ve made compared to the amount you’ve spent. For example, let’s say you’ve spent $1,000 on your PPC campaign over a 4-month period.
You’ve made $3,000 from your PPC ads, which means you’ve made a profit of $2,000 after deducting the $1,000 that you’ve spent. There are many factors that will determine your AdWords ROI, but the main one is your AdWords Quality Score. This is a number between 1 and 10 that you can find in your AdWords account.
The AdWords Quality Score is your PPC account’s rating of how reliable your ads, landing pages, and account history are. The higher your AdWords Quality Score, the better the ads and landing pages you have will be displayed, the more likely you are to get a higher ad position, and the less you’ll pay per click.
The Average Cost per Click
The average cost per click is the amount that you’ve spent per each click on your ads. This number will vary depending on what keywords you’re targeting, the type of ad that you’re using, the ad position, and the competition. The average cost per click is a key PPC metric that you need to track. You can use it to compare different ad types, different ad groups, and different keywords to see what’s working and what’s not.
You can also use it to set budgets for your campaigns. If your average cost per click is too high, you may need to change your ads or keywords, or you may need to scale back your ad budget. As with all of these important PPC metrics, the average cost per click can be broken down into subcategories, which is helpful for understanding where you could improve your strategy and find areas of low ROI.
The Conversion Rate
The conversion rate is the amount of people who end up buying your product after clicking on your ad divided by the amount of people who click on your ad. For example, if 100 people click on your ad and 10 of them buy your product, you have a 10% conversion rate. The conversion rate is especially important to track if you’re running ads to generate leads because it will show you how effective your ads are at getting people to take action.
You can use the conversion rate to compare different ads, keywords, and ad groups to see which ones are bringing in more conversions. The conversion rate can also be broken down into various categories, which is helpful for understanding where you could improve your strategy and increase your conversion rate.
The Cost per Action
The cost per action is the amount you’ve spent on your ads compared to the number of people who have taken a certain action. This can be purchasing a product, signing up for a mailing list, responding to a contact request, etc. Let’s say that you run a clothing store. Your ads generate 100 clicks, and 10 people purchase your products. The cost per action is $10.
The cost per action is a great way to measure the effectiveness of your ads. If you have a low cost per action, it means that your ads are appealing to customers and getting people to take action. If your cost per action is high, it means that your ads aren’t appealing to customers and aren’t getting people to take action. The cost per action can be broken down into various categories, which is helpful for understanding where you could improve your strategy and increase your cost per action.
The Average Position
The average position is the place where your ad appears on the search engine page. For example, if your ad appears in position #3, it will be third from the top. The average position is a great PPC metric to track because it will show you where your ad is located. The average position can be broken down into subcategories, which is helpful for understanding where you could improve your strategy and move your ad up to a better position.
It’s time to wrap things up. PPC can be a challenge to measure, but not impossible. There are many different ways you can track performance, and it all comes down to what you’re tracking and why. Tracking the right KPIs will help you understand what is working and what isn’t so that you can tweak your strategy accordingly.