Google Ads is the ultimate paid search advertising platform that connects buyers and sellers through search intent. Google Ads KPIs are the important metrics used to track the performance of your paid search advertising. By measuring the right Google Ads KPIs for your business, you can gain valuable insights into your marketing and advertising campaigns’ performance and make data-driven decisions on how to optimize your marketing strategies for better results.
Paid search KPIs can also help you identify areas for improvement, set goals, and benchmarks to achieve your marketing objectives. In this post, we’ll break down all Google Ads KPIs and let you know which ones you should focus on.
What is a Google Ads KPI?
Google Ads KPIs (Key Performance Indicators) are essential performance metrics to track within a paid search campaign that can help you determine whether or not your campaign(s) are achieving your overall marketing goals. It’s important to regularly report and measure these KPIs if your business is using paid search as a channel (on a weekly, monthly, or quarterly basis) to gain both a micro and macro perspective of campaign performance.
What Google Ads KPIs can Google Ads track?
Google Ads tracks a wide range of KPIs that you can use to keep track of how your paid search campaigns are doing. However, some of these KPIs may be considered vanity metrics in the sense that they don’t provide enough information to make data-driven optimizations on your campaigns, depending on your campaign goals.
You can change which ones show up on your dashboard so that you can track them easily:
Google Ads KPIs
In order for you to get the best results from your advertising efforts, it’s essential for you to understand each of these KPIs on a deeper level. Below we will explain each KPI and why they are important.
Impressions refer to the number of times an ad is viewed in search. For paid search ads, you aren’t charged for impressions. Impressions can serve as a strong indicator of the audience size that you’re reaching with your ads. However, impressions don’t help you understand if you’re reaching the right audience or not – that will depend on the search intent of your keywords.
Clicks represent the number of times that an ad is clicked on by users searching on Google with the keywords that your ads are targeting. This metric measures the level of engagement an ad generates from your target audience. You are only charged when a user clicks on your ad, making clicks an important metric to track in paid search advertising. Measuring clicks allows you to understand how many potential customers are visiting your website from paid search.
Cost-Per-Click (CPC) is the metric that indicates the amount that you pay when a searcher clicks on your ads. This amount may vary based on factors such as competition for the keyword or placement, what you bid for a particular keyword, and ad quality score. By monitoring CPC, you can gain insights into the efficiency of your PPC campaigns.
A high CPC may indicate that the campaign needs to be optimized for further relevancy and ad quality to improve its efficiency. However, this isn’t always the case because competition alone can drive up the cost-per-click. By optimizing your keyword targeting and bidding strategies, you can reduce your CPC and maximize the value you get from your advertising budget.
Click-Through Rate (CTR) is a metric that represents the ratio of ad clicks divided by the number of impressions that an ad receives. A higher CTR indicates that the ad copy is resonating with the target audience and the product or service that you’re selling is relevant to what they searched for. By tracking CTR, you can gain insights into the effectiveness of your ad copy and targeting strategy. Improving CTR can lead to better ad placement and reduced CPC, ultimately driving more traffic and revenue for your business.
Cost is a metric used to determine the total expenses incurred in a paid search campaign. In pay-per-click advertising, you only get charged when someone clicks on your ad. To calculate cost, you multiply the number of total clicks by the average CPC. By tracking the cost of your campaigns, you can gain insights into your overall advertising spend. Cost can be used in conjunction with other metrics such as conversion rate and Return on Ad-Spend (ROAS) to optimize your campaigns for high return on investment.
Conversions are a metric that measures the number of times an action is taken by your audience after clicking on your ad. These actions can include making a phone call, filling out a lead generation form, or purchasing a product. By tracking conversions, you can gain insights into the effectiveness of your advertising campaigns and the behavior of your target audience. This information can be used to optimize campaigns for better results, improve targeting, and increase revenue.
Cost per Conversion
Cost per Conversion is a metric used to determine the cost of each individual conversion from a paid search campaign. This metric is calculated by dividing the total cost of the campaign by the number of conversion actions completed during a specific time period. This metric can also be used to find optimization opportunities by calculating the cost per conversion on a product level, keyword level, or even by a specific location.
Conversion Rate is a metric used to measure the percentage of your target audience that completes the desired conversion action after clicking on your ad. A higher conversion rate indicates that a larger percentage of your audience has completed the desired action, whether it’s filling out a lead form or making a purchase. By tracking conversion rate, you can understand how effective your ad copy, targeting strategy, and landing page experience is.
Return on Ad-Spend (ROAS) is an e-commerce metric that measures the amount of revenue that can be attributed to an ad campaign after factoring in ad-spend. ROAS is calculated by dividing the total revenue by the total cost of the ads. A higher ROAS indicates that the ad-spend is being optimized effectively to generate a larger return. However, it’s important to note that ROAS only accounts for revenue, and not profit.
Quality Score is a metric used to measure the relevance and quality of an ad in relation to the targeted keywords, bids, and landing page experience. In Google Ads, the highest bidder doesn’t necessarily get the top spot on the search results page if the landing page content is not relevant to the audience’s original search query. By analyzing Quality Score, you can gain identify areas for improvement to optimize your targeting, bids, and landing page experience for higher ad positions and lower CPC’s.
What Google Ads KPIs Should You Be Tracking?
Although Google Ads provides numerous KPIs to track, your business needs to focus on the KPIs that align with your marketing goals and objectives. Some of these metrics may be vanity metrics that don’t necessarily correlate with desired conversion actions. Below we’ll walk you through what KPIs are important for campaigns that are focused on generating revenue.
Why You Should Track ROAS
If you’re an E-Commerce brand, tracking ROAS is crucial to understanding your return on investment. By analyzing the ROAS of individual campaigns or advertising channels, you can identify which strategies are generating the most revenue and optimize your advertising spend accordingly.
Why You Should Track Conversion Rate
Tracking Conversion Rate as a KPI enables you to analyze how many of your website visitors are taking you up on your advertising offer. You can track conversion rate on a campaign, ad group, and ad level to better understand which strategies have a better product-market fit.
Because conversion rate is directly tied to revenue, it’s important to measure it and try to improve it. Factors that influence conversion rate include landing page design, website user experience, ad messaging, and ad targeting.
Why You Should Track Cost Per Conversion
Tracking Cost per Conversion as a KPI is important for any business because it allows you to measure how profitably your advertising campaigns are acquiring customers. If your goal is to maximize results from your ad-spend, you should be trying to acquire customers for as cheap as possible.
Striving to acquire customers or leads for as cheap as possible can have a downside. You should be striving to acquire customers that bring the most value to your business.
Why You Should Track Conversions
The purpose of advertising on Google Ads is to increase revenue by getting as many conversion actions as possible. The most common conversion events for Google Ads are online purchases, lead form submissions, or phone calls. If you’re selling products online, your conversion action should be website purchases so you can see how much revenue your ads are bringing in. If you are selling services or products offline, track your lead form submissions and phone calls.
Be sure to set up your conversion actions right inside Google Ads, because tracking the most impactful conversion action for your business will help Google’s algorithm to find customers more likely to take that make that same conversion action with a cheaper cost per conversion.
Get Better Results With Google Ads Campaign Management
Google Ads has a number of metrics that you should be tracking in order to fully understand how your paid search campaigns are performing. While some Google Ads KPIs are more important than others, focusing on a single KPI to optimize for may not lead to the best results.
Tracking Google Ads KPIs that affect your bottom line such as ROAS, Cost Per Conversion, and Conversion Rate together will help optimize your Google Ads campaigns for long term growth. That’s why we go the extra mile to make sure we optimize for the KPIs that will contribute to our clients’ goals with our E-Commerce Google Ads Services. Request a free consultation today to see if your Google Ads campaigns are getting the best results possible.