New tools to improve performance
on May 20, 2022 (last modified on May 16, 2022) • 19 minute read
If you have ever spent time in Google Ads, then you know how easy it is to feel overwhelmed by the sheer amount of data available in your account.Here is the thing. Most of the data is vanity metrics that might look pretty in a PPC report but don’t tell you much.Typically speaking, the easiest metrics to track in your ad account—like impressions and clicks— are often the most likely to be vanity metrics.
In this post, we’re going to share what PPC metrics you should focus on as well as some overrated metrics.
As one might ask, all of the advertising pros we surveyed use Google Ads as a PPC platform.
In addition to this, over 50% of companies also use the following PPC and paid social platforms:
Note: For added context, 68 people filled out our survey with 42.65% of them working for an agency. 36.76% work in B2C and 20.59% work in B2B.
While the PPC metrics you track will vary based on your company’s goals, the top five most popular PPC metrics were click-through-rate (CTR), cost per conversion, cost per lead, cost per acquisition and conversions.
In this section, we’ll dive into what each of these metrics means and when you should monitor it.
Click-through rate is one of the simplest metrics to track, as it is the number of times your ad is clicked.
To calculate it, take the number of times your ad is clicked (i.e. clicks) and divide it by the number of times your ad is shown (i.e. impressions). That’s your ad CTR.
“Click-through-rate (CTR) is a critical PPC metric for social commerce and eCommerce businesses that my company supports,” says Tim Hill of Social Status. ”This metric reflects traffic and conversion, which are the essential KPIs to attain online sales and marketing success.
One of our small business clients remains stagnant on this metric and we needed to retarget the traffic using appropriate ad extensions and proper local keyword utilization and placement.
The biggest metric change driver we implemented was using negative keywords. This tactic applies the human psychology concept of triggering higher curiosity and driving action using negative words or statements, accelerating our client’s search network CTR exponentially from 1.8% to 8.6% in 6 months.”
Related: Google Ads Click-Through Rate (CTR): What’s Considered “Good” and How Can You Increase It?
Where CTR is focused on ad clicks, your conversion rate is all about the number of people who take your desired action (i.e. conversions).
So, you can calculate conversion rate by taking total number of conversions and divide it by the total number of ad interactions.
“Conversion rate is a PPC metric we always aim to improve,” says Amrita Saigal of Kudos. “Conversion data measures the ROI on current PPC marketing strategies and the effectiveness of our advertisement targeting. For example, if we’re noticing low conversion rates following a recent campaign, we troubleshoot whether it’s the campaign’s contents or if our demographic data needs retargeting. To increase campaign profitability, implement, analyze, and adjust.”
Diana Aldea of Creatopy says, “For our business, there are two important metrics that we look forward to improve, on a daily basis. They are conversion rate and quality of traffic. Actually, they go hand in hand. As the traffic you bring to the website is more qualitative, so are the chances that your conversion rate goes up and upper. I think everyone wants more conversions, but first, the focus should be on attracting the right traffic to your website.”
Farnam Elyasof of Flex Suits adds, “A high post-click conversion rate means we’re getting a good return on investment from our campaigns, which means that we’re seeing a lot of traffic from them. This can be useful for any business, but it’s especially important for businesses with a narrower client base or limited budget. For example, we have a limited advertising budget, and our post-click conversion rate is the best indicator of how well our ads are performing, because they are the ads that are actually attracting those customers.”
To monitor and improve the performance of your Google Ads campaigns, you can spend hours running a variety of reports and compiling selected metrics manually into one dashboard. Or, you can pull all your data automatically into one dashboard with Databox.
You can instantly review all of your campaigns and drill down on important metrics, such as:
Now you can benefit from the experience of our Google Ads experts, who have put together a plug-and-play Databox template showing all the key insights you need to optimize your Google Ads campaigns for conversion and ROI. It’s simple to implement and start using as a standalone dashboard or in PPC reports, and best of all, it’s free!
You can easily set it up in just a few clicks – no coding required.
To set up the dashboard, follow these 3 simple steps:
Step 1: Get the template
Step 2: Connect your Google Ads account with Databox.
Step 3: Watch your dashboard populate in seconds.
If you want to track conversion rate, then you also need to measure conversions. A conversion could be a purchase or a specific desired action like subscribing to your newsletter or downloading an ebook.
“Conversions and Purchases (for eCommerce): those are certainly the two most important metrics, but we also rely on others to validate how those are performing,” says Travis McGinnis of Vye. “This is easy with eCommerce, because it really boils down to positive ROI. If you’re spending more on ads then you’re getting in purchases, then something isn’t working. For non-eCommerce conversions, we look at the cost per conversion and customer value if possible. For instance, some companies have a higher average customer value, so we expect to see higher conversion costs as well.”
Adam Crossling of Zenzero adds, ”Having a great click-through rate doesn’t matter if there are no conversions. For me, personally, improving conversions is highly essential. That’s because there was a time when I didn’t focus on this metric and had to face the consequences. Despite having a good CTR, my sales were down, and the company wasn’t generating much revenue. But, then I tracked my conversion rates and realized that it was time to optimize. So, I improved my landing pages, added pop-ups with a compelling call-to-action, and also included a live chat feature on my site. Soon, my conversion rate started to increase. As a result, I even observed an overall increase in my company’s sales and profit.”
In addition to conversions and conversion rate, you should also monitor cost per conversion. This metric can help you monitor how healthy and effective your ad campaign(s) are.
“The most important PPC metric by far is cost per conversion,” says Kevin Huang of Ambient Home. “This is the one metric that equates to how much money I spent to get a sale, and I can compare it to the amount I made on the sale and decide whether it was worth it or not. Other metrics simply do not tell the whole picture of the bottom line.
For example, I can have high ROAS but low margins to cancel that out. Or I can have a high CTR but a low conversion rate. As a furniture store, we carry expensive products on which we make a healthy margin. We have observed that having large but infrequent sales can still be very profitable…
For example, we have a $1500 margin on one of our fancy fireplaces. We may only sell this product once every 3 months, but spending $100/month on ads for this fireplace results in $4800 of profit on the year, which is decent. We spend $300 on ads for conversion, on which we make $1500. Worth it. This is a super simple application of cost per conversion.”
Clare Jones of Custom Neon agrees, “Cost per conversion is the most important PPC metric for us to improve, as it serves as a general indication of the effectiveness of our PPC strategy. As a business that sells premium products with a high average order cost, our cost per conversion is often higher than others, making it extremely important for us to do the best that we can to lower this metric in order to make the most out of our PPC budget. This metric is also great because it can be applied to multiple conversion actions and goals.
For example, we focus heavily on driving leads through paid ads – something which means that our ROAS is often not an exact indication of advertising effectiveness. Customers might click one of our ads and submit a quote form that doesn’t translate into a sale for weeks or even months. Having separate cost per conversion goals for leads and direct sales means that we’re able to easily track the effectiveness of both types of advertising campaigns and make tweaks accordingly.”
For many B2B businesses with longer sales cycles, you might choose to track cost per lead.
For instance, Ansar Hammad of Entire Looks says, “I’ve always been most interested in the cost per lead metric because that’s something that can trickle down and affect other metrics—like CPA, CTA, Quality score, and conversion.
If your cost per lead goes up, it’s a pretty good sign that something is off in your campaign. It could be an issue with targeting—maybe you’re just not reaching the right leads or you’re targeting too broadly; or maybe it’s an issue with the ad copy: maybe you’re attracting the wrong kinds of leads, or your landing page isn’t persuasive enough.
I’m really big on making sure that I understand what every metric means so that I can tell where things are going wrong when they are. I have found that keeping an eye on this metric allows me to easily determine whether or not my current marketing strategy is working.”
Another key metric to keep an eye on is cost per acquisition. Whereas cost per conversion is all about how much it costs to get someone to take your desired action, CPA measures the total cost of all the touch points before they become a customer.
“Our most important PPC metric to improve is CPA because we want to use our ad budget as efficiently as possible in gaining new customers,” says Kathy Sheng of Kinsta. “A lower CPA is also correlated with higher conversion value and ROAS for us, so we know we’re moving in the right direction overall by focusing on improving our CPA.”
When you think about conversions and cost per conversion, you should also think about how much each conversion is worth to you. This is part of running a sustainable advertising campaign.
“A pivotal PPC metric we use in our company is the total conversion value,” says Ling Ling Fung of Metro Baby. “It leverages on the idea that certain products tend to attract buyers to spend more on other related items.
For example, a customer who is looking for baby clothes is likely to check out just a number of baby clothes and leave the site. On the other hand, a customer who is looking for breast pumps will more likely add to cart sterilisers and other infant-feeding products. Even if the clothes and breast pumps cost almost the same price, the total conversion value of breast pumps will be higher. Knowing the specific products that yield more conversions is a targeting strategy that helps our company scale. It lets us know what items to promote to optimize our ads.”
While some people measure conversion value, others use return on ad spend (ROAS) as a proxy metric. This is a way to gauge how much money you are making in relation to how much you are spending (i.e. ad budget).
“Return on Ad Spend (ROAS) is the most important to improve as it helps you analyze the performance of each of your campaigns,” says Patrick Garde of ExaWeb Corporation. “It allows you to see which type of ads are performing to scale it and maximize your return and results.”
Brandon Walsh of Golf Clubs Guru adds, “ROAS is how much return you’re earning on every dollar spent on paid ads from your budget. We strive to increase our ROAS because the higher this metric, the more profitable our campaign is. ROAS also helps predict what the returns would be if we scale our PPC campaign up or down.”
For example, Brandon Loures of Brandlift Digital Marketing says, “For our business and every client’s campaigns we manage its important to understand your profit margin and work backward towards profitable metrics. The most important metric is always ROAS (return on ad spend) or the direct ROI measured from those specific campaigns. Nothing else really matters, however optimizing other metrics is how you get to that end goal of increasing your ROAS.
The second direct metric that plays into ROAS is your cost per acquisition and then next down the line cost per conversion. For example once understand which keywords are converting the best you can work on optimizing metrics like cost per click, top impression share, and testing the things you think or observe that play into bettering your most important goals.”
Not all PPC metrics are created equal. It is easy to over-emphasize vanity metrics that don’t really tell you how your campaigns are performing.
Total impressions is the epitome of a vanity metric. It looks big and impressive, but it doesn’t tell you anything meaningful for lead generation or conversion-oriented ad campaign.
“One PPC metric I think is overrated is impressions,” says Brett Larkin of Uplifted Yoga. “Impressions is a very broad metric that simply tells you how many views your PPC ads have procured, but lacks specificity regarding unique engagement and actual potential conversions. Impressions provide you with virtually no useful information in the grand scheme of your marketing strategy. If you want to gauge traffic and interaction with your ads, focus on reach, not Impressions.” Jones adds, “I definitely think that the Impressions metric is far overrated. I would much prefer that our ads get served to a smaller, more targeted audience that is willing to convert – as opposed to a large audience with little to no interest in our product. Some businesses prefer to target consumers at the very top of the funnel, engaging wide audiences and generating the highest number of impressions possible in order to get the word out about their business. This definitely has its benefits for some, however, I don’t think this strategy is ideal for businesses selling premium products. Fewer impressions gained from customers lower in the purchasing funnel are ideal for businesses like Custom Neon.”
Not to mention if you are doing any retargeting campaigns, the impression metric can be inflated.
John Gardner of Kickoff explains, “Because the same content can be displayed to the same user on several different platforms adding to the number of impressions which makes it misleading. However, the reach is a more reliable metric as it calculates how many people actually see the content. If they see it in several different places, it will not add to the reach making it a more useful and exact metric.”
Impression share is the percentage of impressions your ad actually gets compared to the total number of possible ad impressions. Just like with total impressions, impression share doesn’t mean much.
“The most overrated PPC metric for me is Impression Share,” says Elyasof. “This metric is not an accurate and objective measure of how well a campaign is performing. You’ll need to look at this metric in relation to bigger campaign goals such as ROAS for it to have any meaning or value.”
Carl Panepinto of Bumper adds, “It’s an overrated metric, because they lack specifications. For example, it doesn’t show how well your ad was able to perform on various platforms. The general scope of this metric isn’t really beneficial for creating a marketing strategy. For example, I can’t understand how users reacted to my advertisement or did they skip mid-way.”
At first glance, quality score might seem like a helpful PPC metric since it tracks ad relevance. However, it has some notable downsides.
“I believe Quality Score is one metric that is widely overrated,” says Walsh. “This is a number assigned by Google for our keywords and is used for the positioning of our ads. I think it’s overrated and not entirely useful because Google’s algorithms are quite complex and understanding them to such an extent is a waste of time. You can try to improve your Quality Score but it doesn’t have a significant impact on your ad positioning.”
McGinnis adds, “Quality Score is such an insidious metric. Yes, it can lower overall costs, but costs aren’t the only thing that matters. Competitor PPC campaigns, for example, are notorious for horrendous quality scores. Yet, many brands rely on these campaigns, especially in hyper-competitive industries. Any metrics to focus on and report on should derive from the campaign goals.”
Tracking clicks without also tracking either conversions or CPA is meaningless.
“The number of clicks doesn’t necessarily mean that the ad is performing well,” says Fung. “It is not indicative of a campaign’s effectiveness, thus, a poor source of information.”
Another metric that can be misleading for a similar reason is cost per click (CPC). The real metric you should be tracking is cost per conversions or cost per lead since that is the number of people who take your desired action, not just the total number of ad clicks.
“I think CPC is overrated,” says Sheng. “Sure, it’s great to get more clicks for the same budget, but in the end what’s most important is getting a sale, and it’s better to pay more for a click that results in a sale than getting a large volume of cheap clicks with zero sales.”
CPM is a particularly insidious metric since it looks like a conversion-related metric, but it is really just another way to measure impressions. In this case, it is the cost per 1,000 impressions.
“Some advertisers are still focusing on CPM,” says Paul Romancsak of Flipsnack. “Trying to lower it as much as possible, but the metric just tells that the ad was displayed with no information whether those impressions are relevant for your business. Having a very low CPM may even be an indication of poor quality traffic.”
Average position is another vanity metric since it doesn’t take into account traffic or conversions.
“Average Position doesn’t mean much to us really,” says David Brent. “It’s a very vague and rough metric and when you’ve got so many keywords targeting such a broad dataset if you obsess over an average position it’s going to waste a lot of your time in the long run.”
Richard West of PuppyHero adds, “That’s not to say it isn’t helpful; I just think most people got caught up in trying to get the number one spot without evaluating the cost and benefits. It all depends very much on your budget. For instance, if you’re not spending massive amounts of money on your campaigns, it makes sense to appear in the third or fourth positions.”
Similar to average position, ad rank is another vanity metric.
“Position 1 at all costs,” says Rajat Chauhan of Ace Infoway. “To those who have been in the industry for a while, this seems like a no-brainer. Position 1 isn’t always the best place to be. However, many find the temptation too great to resist. It is possible to pay your way to the top, so why not do it?”
So, you know how important it is to focus on the right PPC metrics. However, the process of manually going into all of your PPC tools, pulling the data, and adding it into various spreadsheets can be time-consuming. All of the time you are spending doing manual data entry is time you aren’t spending analyzing the data or you know optimizing your PPC campaigns to get better results.That’s why setting up a PPC dashboard using dashboard software like Databox can be beneficial. You can connect hundreds of sources including Google Ads, Facebook Ads, Google Analytics, and HubSpot to your dashboard. So, you can set everything up once, and then it updates in real-time moving forward.Ready to build your PPC reporting dashboard? Create your free Databox account here.
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