It is essential to understand that there are multiple touchpoints within the marketing funnel. The conversion process is not a simple linear path, and it’s not a straight line. If you’re responsible for PPC services, you must monitor and analyze the most important KPIs related to your work. These metrics and figures will help you determine whether your campaign is successful or not. You need to understand where you are in the marketing funnel to optimize your campaign for conversions.
List Of 8 PPC KPIs That Are Critical To Determining The Success
Gross Response Rate
The gross response rate is the number of people who saw or clicked your ad divided by the number of times your ad was shown. It’s one of two key performance indicators (KPIs) you can use to gauge the success of your PPC campaign.
For example, if you have an ad that receives 100 clicks and you have 1,000 impressions, then your GRR would be 100%. If you have an ad that receives 100 clicks and you have 10,000 impressions, then your GRR would be 10%.
With this KPI, Google will track how many times a user clicked on your keyword in an ad and visited your site. This is reflected in your AdWords account under “Conversions” in the “Keyword Performance” tab. The actual formula is:
Conversion rate = (total conversions / total clicks) * 100
Also Read: 3 Effective Strategies to Run PPC Campaigns
The click-through rate (CTR) is one of a pay-per-click advertising campaign’s most important performance metrics. It gives you an idea of how relevant your ads are to your keywords and can often help you improve your search engine optimization strategies.
It is a percentage that indicates how many people clicked on a specific ad compared with the number of times it was shown. For example, if your ad was shown 1,000 times and 200 people clicked on it; so, your CTR would be 20 percent.
If you’re not getting enough clicks, it may be time to tweak your ads or target new keywords. It’s also helpful to compare CTRs across different campaigns; if there’s a massive difference between them, you may target other people and reach different audiences.
Conversion rate is the percentage of visitors to your site who take some action, such as filling out a quote form, downloading an ebook, or buying a product. It is one of the most influential PPC KPIs because it shows how well your ad is working.
Depending on the campaign objective you are setting, the conversion rate may be expressed as a percentage of impressions (also known as clicks) or as a percentage of visits to your site.
A high conversion rate means that your ads are relevant to what people are searching for and that your ads are drawing visitors to your website. A low conversion rate usually means you need to improve the relevance of your ads or adjust keyword bids.
For example, if you have 1,000 visitors and 50 make a purchase, your conversion rate is 5%.
If you have 10,000 visitors and 500 make a purchase, the conversion rate would be 5%.
Cost Per Acquisition
The cost per acquisition (CPA) is the average amount spending for acquiring a new customer. It includes all marketing costs such as ad costs, salesperson salaries and commissions, and similar expenses.
The tricky thing is, CPA doesn’t start with zero when you run your first ad. It begins with whatever your marketing funnel looks like when you start running ads. You can think of it as the cost of acquiring customers in the long term—so if every customer requires $100 in up-front customer acquisition costs, then your CPA is $100/customer.
Landing Page Engagement Rate
The Engagement Rate KPI is a metric that should be showing the number of visitors that have done something on your website. The most used action is to have a visitor click a button or link. The most common metrics are Clicks/Views and Clicks/Visits.
The difference between landing page KPIs and website KPIs is that you can’t directly measure “conversions” for landing pages. There is no conversion event. The only conversion event you get for landing pages is Google Analytics Event Tracking, which can track goals taken by people who came through the landing pages.
Using Google Analytics Event Tracking, you can get data for how many people took a desired action through the landing page (e.g., fill out a contact form). The primary KPI for measuring the success of your landing page depends on what type of campaign you are running (organic or paid) and your business objectives (lead generation or sales).
Average Quality Score
Whether you’re improving your PPC campaigns with better keywords, more conversions, or better ad copy, one of the most critical metrics to pay attention to is your average Quality Score.
The truth is that while advertisers often don’t think about it, Google does: they use Quality Score to set prices for certain types of keywords. The higher your Quality Score, the lower your cost per click (CPC), and the better your ROI will be because you’ll pay less for each conversion. By contrast, if you get a low-Quality Score, costs could skyrocket and make your ROI plummet!
The best way to improve your quality scores is by increasing the relevancy of your ads and landing pages and decreasing your ad’s click-through rate (CTR).
First Page Bids
The first-page bid is the highest amount you are willing to pay for a click on your ad. The minimum bid you set for your ads determines where they will appear in the search results, with higher minimum bids yielding more favorable positions.
You can find out what your first-page bid is by looking at your keyword list. The first column contains the keyword, and the second column contains the first-page bid. It can deviate depending on several factors, including keyword competitiveness and search volume, so it’s important to check back occasionally to ensure that it remains relevant for each keyword in your campaign.
Ad rank is a logarithmic representation of the ad’s position on the search results page, with the highest-ranking ad at the top. So, ad rank is calculated based on several factors, including:
- Click-through rate (CTR),
- Relevance to keywords in an ad group,
- Quality of the landing page, and
- The competitor’s ads’ performance against yours.
Ad Rank = (Ad Quality Score) + (Max Bid)
For most advertisers, ad rank is the primary KPI that they look at. If you’re using manual CPC bidding or Enhanced CPC bidding, understanding how to manage max bid and quality score can help you maximize performance and profits.
If you’re not tracking these KPIs, you can’t call yourself a PPC expert. These are the most important metrics that you need to be aware of and track. Because, they’ll tell you exactly what’s going on with your account. Moreover, where your efforts need to be focused.