Paul W. Farris, in his Definitive guide to measuring marketing performance, emphasizes that few managers understand the variety of metrics they can use to evaluate marketing strategies and dynamics. This is true.
Key performance indicators are key to digital marketing’s success. Tracking your key performance indicators in PPC will help you make better, data-backed decisions about your campaigns. This is the best way to show your boss and clients the effectiveness of your strategy.
As your campaign goals change, it is important to link your Google Ads KPIs with them. Setting realistic goals for each Google Ads campaign is key to success. Then, choose the metrics that will show you if you have achieved them.
Here are some ideas to help you decide which KPIs you should track to increase your PPC campaigns’ effectiveness in 2020.
The Click-Through Rate
Click-through rates (CTR) are a measure of the effectiveness of your campaign. This tells you how many people clicked through to your ad once they’ve seen it.
You can track your campaign’s success by improving your CTR.
It is simply a matter of dividing the number of clicks in the reporting period by the total impressions (people who saw the ad) to measure it. If your ad is clicked 300 times and gets 2000 impressions, then your CTR will be 15%.
WordStream’s study found that has an average click-through rate of 3.17%. However, there is no one ideal CTR benchmark. It all depends on your industry, target audience, and budget. The average CTR in consumer services is around 2.41%. In the travel and hospitality industry, it’s at 4.68%.
Keyword Performance
In 2020, conducting extensive keyword research and understanding search intent will remain the backbone of Google Ads campaigns. You must monitor the performance of keywords to make sure you get the best out of your ads.
Monitor your keywords’ quality score and CTR to determine if they are performing well. Based on the information you gather, you can remove keywords that aren’t working for you. It is also possible to determine who sees your ads.
Some match types, for example, will result in higher clicks, impressions, and conversions than others. Final step: Determine the keywords that you do not want to appear for, and add them to your negative keyword list.
Cost Per Click
Marketers know how to set budgets for their Google Ads campaigns and what they can spend on their PPC campaigns. It doesn’t necessarily mean that you will spend the budget or bids you have set in advance.
The bid price will depend on the other advertisers you need to compete against during PPC ad Auctions. You will therefore need to pay a higher price for the bid.
Here is where cost-per-click (CPC), comes in. This tells you how much money you paid for your ad placement. It is easy to calculate. Simply divide the cost of the campaign by how many times you clicked on the ad.
Conversion Rate
Remember that Google Ads is another channel that will direct people to your website. This is only half of the job. The second half of the job is to motivate those visitors to take desired actions.
Conversions can mean many things in different industries. A conversion in online retail is, for example, getting someone to click on your ad and make a purchase. Conversion could also mean booking an appointment, or downloading an ebook.
Understanding what conversion means in your industry is the first step. Next, you need to determine industry benchmarks. Conversion rates can vary between niches, just like CPA. The WordStream study found that the average conversion rate for dating services is 9.64% while advocacy has a low conversion rate at only 1.96%.
Many factors can influence conversion rates. You should not only observe industry benchmarks but also try to convert your visitors into clients. This includes improving the quality and relevance of your ads and polishing your website so that customers can checkout easily.
Cost per Acquisition
The most important Google Ads metric is the cost per acquisition (CPA). Google defines it as the cost you pay for each acquisition. You will divide the cost of your conversions by the number of conversions to measure it.
This KPI tells you how much ROI your campaigns are generating. Let’s suppose you spend $200 to acquire a new customer. If your average customer spends $1000, then that’s great. If they spend $100, however, you are losing $100 per customer.
The average CPA benchmark across all sectors is $48.96. However, this number can vary depending on your niche. The average CPA in the tech sector is $116.61. In the travel and hospitality industry, it’s $44.73. To understand how your campaigns are performing, it’s important to know industry benchmarks.
Quality Score
Google created the quality score, which is a metric that measures how relevant an ad is. It uses metrics such as CTR, ad formats, and relevance of landing pages to determine if your ad is meeting the needs of your target audience.
Google is continually improving and changing its quality score. They gave advertisers the ability to view historical quality score data in AdWords in 2017. Advertisers gain greater insight into their campaigns and can take better decisions during campaigns.
The rules remain the same, even though your quality score may change. Google rates your ads on a scale of 0-10. A good score is higher than 7. To increase your campaigns’ effectiveness, you should invest more.
Because of its complexity, many advertisers find quality scores difficult to track and understand. However, quality score tracking and improvement should be your top priority as it directly impacts your CPC and CTA.
Just like in any other sphere of digital marketing services in Miami, Google Ads metrics don’t bring any value when observed separately.
If you don’t know how many people convert, then tracking click-through rates or impressions isn’t a good idea.
Choose the KPIs that are relevant to each campaign and sync them accordingly. Keep your eyes on the metrics that show your progress, and ignore vanity metrics that could distract you from reaching your goals.
