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By Darren DeYoung
Like any good marketer, you should be tracking the effectiveness of your campaigns. But where do you start for your Paid Ad campaigns and what metrics should you focus on? There is an overwhelming array of metrics to track and analyze. Some will greatly impact your business and others may not even cause you to blink. It is a great idea to narrow down the field to a shortlist of key metrics that really give you insight into what’s working and what isn’t.
To start, you need to know what you are aiming for--what goal do you have in mind for your campaigns? Sometimes you may have individual goals for each campaign, while other times, your campaigns may be working together toward a common goal.
Regardless, your goals should be tied to an action that you want visitors to take on your website. Whether it is buying a product, filling out a form, or downloading an offer, it is important to keep your goals in mind when determining the success or failure of your campaigns.
With your goals set, structure your ads so you can assess the campaigns, ad groups, ads, and keyword performance in an efficient manner. Group your campaigns by offer or keyword topic so you can have a close relation of the keyword you are targeting with the keyword in the ad copy. Then, create a suitable landing page(s) that mentions the terms within that group.
After launching the campaign, give your campaign time to run and collect data. The more data you have, the better decisions that can be made.
When everything is set up properly, where do you start and which metrics should you focus on?
These metrics can give you insights into the health and performance of your paid ads. They help you determine what gets the user from the SERP to your website. Let’s dive in:
This shows you how many times your ad was served, or some may think of it as how many times your ads have been seen. However, if your ad is at the bottom of the page, it was served but most likely went unseen by the user.
Impressions can give you a good idea of how your ad is performing, but as a statistic on its own, it is not very useful.
This metric reports the number of people who clicked on your ad after seeing it. It measures the engagement of people who clicked your ad and are potentially on their way to converting into a business lead.
The average cost-per-click across a campaign is the amount your company pays each time someone clicks on your ad. This metric will vary greatly by keyword as some keywords are worth a higher spend; while others are not.
If a keyword doesn’t drive many conversions, you might not be willing to spend as much. You can either set a maximum cost-per-click or let the advertising platform determine the appropriate amount based on the selected bidding strategy.
Don't Tell me your Cost-Per-Click is Skyrocketing?
The click-through rate reveals the percentage of people who were shown your ad that decided to click on it. This is calculated by dividing the number of clicks by the number of impressions.
This metric is a great tool to measure the effectiveness of your ad copy. A high click-through rate likely means that your ad is effectively communicating to your target audience as they are clicking on your ad and visiting your website.
Quality Score is a metric used by Google Ads to measure the relevance of your keywords to ensure that searchers see relevant ads and have a positive (“quality”) experience. The factors that determine Quality Score include:
Maintaining a good Quality Score is important as it impacts your ad rankings as well as how much you pay per click. If you are confident that your keywords and your landing pages are aligned but your Quality Score is low, follow these tips from Google to improve your ad quality.
Traffic-driven metrics are about getting people to your website, however, they don’t tell the whole story. Conversion-driven metrics show you what happens after a user clicks on your ad. Conversion tracking helps you understand how your paid marketing efforts are truly performing. Here is what you should keep an eye on.
There are a variety of possible webpage conversions, some common examples include a user:
A conversion is simply any action you want your visitors to take. If your conversion rate is low, you’ll want to take a look at factors that may hinder the process such as ad copy, website design, and poor offers. Some businesses may even want to track visits to key webpages, such as a contact page, and consider that a conversion.
For many businesses, phone calls are the highest-quality lead. But very few businesses track phone calls. With effective call tracking, you can measure which of your campaigns lead to phone inquiries. After all, if someone is clicking on your ad and then calling your business, you are paying for that click. It is best to track phone conversions so you know what you are getting out of your paid ads campaigns.
If your business has an app that will drive revenue growth, and if you advertise to promote it, you should track this metric. Some of your most loyal and highly converting users could be mobile app users. If these users become engaged, they can become long-term customers, so investing in their acquisition is vital.
Many consumers prefer to buy from an authentic brand, so it is important to generate brand awareness and position yourself as an industry expert. A great way to do that is to provide free downloadable content like a whitepaper, eBook, or case study. These items can be huge for boosting long-term sales because if a user downloads something from your site, they are showing interest in your brand.
If you require information like an email address or phone number in exchange for the downloaded content, you can add a high-quality lead to your contact database.
Conversion rate is a popular conversion metric that tells you how many people clicked on your ad and completed the desired action on your landing page. This metric aligns with click-through rate because you don’t want to pay for a ton of clicks and traffic if none of that traffic is converting.
Case Study: Paving the Road For Higher Conversion Rates
A high conversion rate indicates that people want your offer and that you’ve provided a good means for them to get it. It also means that the money you spend per click is coming back to your business in profits. A low conversion rate could signal that your ad is not closely aligned with your landing page, your landing page doesn’t speak to the value of your offer, or you’re promoting the wrong offer to the incorrect audience.
This metric shows how much your business spent on your ad campaign compared to how many people converted. It is calculated by dividing your spend for a given period by the number of people who converted during that period. It is important to note that not all conversions imply that a customer has purchased a product or service. If a conversion is viewed as a phone call, you may not have made a sale and instead just answered questions from a potential customer.
If this metric is low, you are generating many conversions from a limited spend and your spend is efficient. If your cost per conversion is high, it could indicate that you are wasting money targeting the wrong audience.
Ultimately, this number determines the success or failure of a campaign. If you are paying more to gain a new customer than that customer is actually worth to your business, then your campaign is failing and you haven’t created a positive return on your paid ads investment.
Perhaps the holy grail metric of any marketing campaign, your ROI reflects the profitability of your campaigns. The budget you devote to a paid advertising campaign needs to coincide with the financial opportunity associated with your overall goal.
If your goal is to sell a product, you need to consider how much revenue you’ll generate from selling your product compared to the amount you’ll spend on advertising. Say you spend $5,000 and your ad campaign generates 30 conversions. From those 30 conversions, 1 becomes a paying customer. When that customer purchases your $10,000 product that has a 50% profit margin, and you break even with your ad campaign. To have a positive ROI, you need to increase your efficiency. This could involve converting more customers from the same audience or generating more paying customers per conversions.
Ultimately, tracking your ROI will help you objectively determine the revenue generated from your ad campaign and avoid wasting money.
Wasted spend is the amount you pay for clicks that don’t convert into a paying customer. It is an ROI killer, but converting 100% of your clicks is extremely unlikely. The best way to reduce your wasted spend is through targeting those most likely to convert and filtering out irrelevant traffic with negative keywords.
After tracking your ads and analyzing metrics over time, the data you collect will reveal opportunities for improvement. Without this data, there is no basis to improve your paid efforts and your attempts would be futile.
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