What use is PPC marketing if you have no way of measuring how well it’s working, or if it’s costing too much without driving up enough profit?
That’s where KPIs come into play. There are several key performance indicators your business can track and analyze, in order for you to judge just how effective and efficient your PPC marketing is.
If you want to scrutinize your PPC performance yourself (see also ‘How Do You Track PPC Performance – A Complete Guide‘), you sure can. But if so, you don’t want to get too bogged down or confused trying to get your head around too many metrics.
So, to that end, in this article, I’m going to break down the 7 KPIs you need to track (see also ‘What Are The 5 Most Important KPIs For PPC Management?‘). Focusing on these 7 figures is all you really need.
And without further ado, let’s get straight to it.
(The following KPIs are all important in their own right, so are not listed in any particular order.)
1. Number Of Impressions
An impression, in digital marketing terms, is any time that a web or social media or app user sees your PPC ad (see also ‘What Is PPC In Publishing? (Process Explained)‘). Or to be more specific, any time when your ad is visible to somebody. It is also referred to as a view-through.
This is important because no matter how good your ad is, this means nothing if no-one is around in the right place to see it. The more eyeballs you get on the ad, the more clicks you get, and in theory at least, the more money you ought to make from the ad as well.
2. Quality Score
You’re also going to want to know just how well your PPC ad fairs against your main competitors, and that’s where quality score comes into play…
It is basically a score ascribed to ads to reflect the quality of the ad in relation to similar ads by your main competitors. It is measured on a scale from 1 through to 10.
The quality score takes into account the expected click-through rate, the ad relevance to the keywords involved, and the landing page experience. With particular emphasis on keyword relevance.
You should aim for a quality score between 8 and 10.
3. Number Of Clicks
The public are pretty much accustomed to seeing ads, on TV, on apps, and on the internet. And more often than not, they will overlook a well-placed ad in order to get to what they’re really looking for.
But the idea behind PPC ads is to get the web or app user to click on the ad to at the very least find out more, if not becoming a fully fledged customer.
If your clientele a) spots your ad, and b) is engaged by the ad and wants to find out more, their first step is to click on the ad to get to the relevant landing page, whether they decide to sign up or not. So the total number of clicks is an important metric for PPC (see also ‘Best PPC Software For Publishers‘).
4. Click-Through Rate (CTR)
An effective ad will not fade into the background, it will stand out. Getting your would-be customers to have the ad visible is one thing, but the real trick is to get as many would-be customers as possible to click through in proportion to the impression metric discussed earlier, how often the ad is seen.
The click-through rate, often condensed to CTR, is easy to work out. It’s just the total number of clicks that the ad gets divided by the total number of times the ad is visible.
Most industries have an average click-through rate between 4 and 6 percent, so you need to be aiming for at least that, preferably better.
5. Conversion Rate
So, we’ve covered how often your ad is visible, the quality of the ad, how many clicks it gets, and how many clicks it gets relative to the number of views.
The next thing you need to think about is the figure of users who actually go on to becoming paying customers. Getting users to click through and get to your landing page is one thing, but the most important step is the customer’s response to your call to action.
One of the more popular ways to measure this conversion rate is by taking the numbers of visitors to your landing page divided by the number of times a user became a paying customer, as is described as a percentage figure.
6. Average Cost Per Click (CPC)
Rarely in life can you advertise free of charge. Ads on social media, apps and the internet come at a cost.
Every time someone clicks on your ad, that has cost you because you had to pay for the ad in the first place. So in order to work out whether or not you have profited from an ad, you must begin by working out the cost per click
CPC is calculated by dividing the total cost of your clicks by the total number of clicks, to get an average figure of the cost per click.
7. Return On Ad Spend (ROAS)
Then, once you have your figure for the average cost per click, you can then go on to work out the return on the investment in your ad spend.
This way, you can see whether or not the ad was good value for money, and you’re seeing a good profit as a result, or whether the ad is a flop, and it’s costing you too much to run.
If you decide to use a PPC ads for your marketing campaign, you need to ensure that a) the ads get seen, b) that your ads generate paying customers, and c) that you get a return on your investment of the cost of the ad.
The 7 key performance indicators listed and described will help you to know all of that, and thus be in a position to see what’s working well and what’s not, so that you can tweak and adapt your strategy at any moment in time for maximum efficiency.