What Are Key Performance Indicators
Google Ads are one of the best ways to target specific audiences, but it can be complicated to implement effectively. So, how do you know what areas you’re doing well in and what areas need to be improved?
This is what key performance indicators are for. A key performance indicator is a measurable value of the success of the business or thing being evaluated.
For Google Ads, there are a few important Key Performance Indicators (KPI).
Google Ads Key Performance Indicators
Performance indicators are important for determining if your campaigns are successful.
KPI can be used to figure out which keywords are performing well and which aren’t. Based on the KPI, you can determine what areas aren’t working to redistribute spending.
Budget allocation can be determined and redone based on these indicators. So let’s look at what these indicators are:
Click-Through Rate (CTR)
Click-Through Rate is one of the most important performance indicators. CTR can show if your ads are compelling.
CTR measures the success of a total ad campaign as well; the higher the CTR, the better, since your ad is getting more clicks. More clicks generally mean more leads; there are some exceptions to this, because the quality of leads really matters. Some of the other KPIs can help improve your CTR.
Cost Per Click (CPC) / Price-Per-Click (PPC)
Cost per click is another KPI; comparing the amount you pay per click on your ads to competitors can help you understand how well your ads are doing relatively.
A lower ad spend on CPC can mean a higher quality score, since you can pay less than your competitors.
For a more in-depth breakdown of CPC/PPC and what affects it, you may be interested in this article.
Ensuring you aren’t overspending on CPC is an important performance indicator.
Cost Per Acquisition (CPA)
Google Ads has Cost Per Acquisition, which measures the overall cost for obtaining a new customer. This includes everything from the beginning of getting a prospective customer to click on an ad, to after their transaction is complete.
This metric is used for determining how effective and profitable your business marketing efforts are. This can also inform budgeting for continuing Google Ads Campaigns and other future Google Ads Campaigns.
Conversion Rate (CVR)
Conversion Rate is just the measurement of how many prospective consumers convert from impressions to clicking on an ad. This is one of the most important measurements of PPC campaigns.
A low CVR can be a high indicator of irrelevant audience targeting or an ineffective landing page.
Return on Ad Spend (ROAS)
Return on ad spend is one of the more important metrics, measuring the actual revenue for the amount you spend on Google Ads, which can be really important to knowing how well your campaign is going.
This one is important for ensuring you aren’t losing money from Google Ads Campaigns. If you’re making a profit, then there’s no worry; you may want to look to other indicators to increase those profits.
But if you’re losing money, action must be taken to rebudget and adjust campaign settings. This is our specialty at Mpire Marketing,
Google Ads Impressions
An impression is whenever an ad appears on a user’s screen. Impressions are more important for campaigns focusing on a broad reach and creating brand association.
Impressions measure how many people see your ads, so low impressions means even if you have a high conversion rate, you might need to change the keyword targeting.
If you’re interested in increasing your ad impressions, you may be interested in our article on impressions.
Quality Score
Quality Score is related to a specific ad copy and landing page for that ad. It indicates the relevance and overall quality.
Higher quality indicates a more relevant ad for the targeted keywords. Specifically quality score relates to the cost per click. Since it’s Google’s metrics, they want to display the higher quality score to increase likely hood of clicking
How To Understand Your KPIs
Overall, certain KPI metrics matter more than others, depending on your goal with your Google Ads campaign.
Tracking the right KPIs to not get overwhelmed with tracking them all. Thus, monitoring them regularly and adjusting accordingly can be valuable.
For a more in-depth evaluation, you may be interested in our services. We can evaluate your Google Ads Campaigns and set up KPI measurements and adjust your Ads to optimize profits and prevent loss of profit, so you don’t have to.