Key Performance Indicators for Google Ads Campaigns

One of the main benefits of Google Ads campaigns is a large amount of data to analyze. This is the key to a better understanding of your advertising campaign, target audience, customer interests to further optimize advertising.

With a wealth of information, you need to understand which metrics are best used for analysis and how they help improve your advertising campaigns. We'll look at 8 key metrics for Google Ads advertising campaigns.

Impressions and Clicks

Impressions and clicks are one of the main indicators of your ad's performance. An ad click is the beginning of the sales process, and the number of clicks directly depends on how much money you spend. This metric tracks certain trends that may indicate opportunities or issues with advertising. For example, if the number of clicks increases, it's time to increase your budget or keyword bids. If the number of clicks decreases, you're likely to have problems with your ad text or selected keywords.

Cost-per-click (CPC)

Like clicks, this metric can provide very valuable information about trends. Cost-per-click is based on the competitiveness of the keywords you choose, the so-called query frequency. Therefore, if your CPC grows, you should review your keywords and try using "long tail" words (more than 3 or 4 words long) to drive more targeted traffic. You can also raise your maximum bids for important keywords to stay competitive in auctions.

Ad Clickthrough Rate (CTR)

This clickthrough rate helps you understand your customers by showing what works and what doesn't, with your target audience. For example, a low CTR means you're targeting the wrong audience or not "speaking" their language to persuade them to click on your ad. Therefore, it is necessary to replace the rhetoric, allow the system to process new ads, and after some time you need to re-evaluate the indicator.

Share of impressions

Impression share is the percentage of all potential impressions for your ads. For example, if a keyword has received 1,000 searches and your ads have been shown 700 times, you have a 70% impression share. Google also offers two categories of lost impressions: those lost due to limited budgets and those ranked by ads. This information helps you understand whether to increase your budget, raise your bids, or improve your Quality Scores in the fight for higher ad positions.

Quality indicator

Quality Score is an assessment of the relevance of your ads, keywords, and landing pages to the user viewing your ad. This is important because Google considers it and the keyword's bid when determining your ad's position in the auction. A higher Quality Score usually helps you win among competitors' ads, even at a higher bid than yours. In this way, Google ensures that ad positions are not reserved for those who pay the most and that everything is determined by creating the best impression for the user.

You need to create well-structured ad groups to improve your Quality Score; have landing pages with a lot of keywords that are relevant to everything that is advertised; use keywords in each ad; show a call to action (CTA) and make the value proposition very clear.

Conversions

Keywords and ads are the basis for setting up advertising. And the basis of effective advertising is conversion. Conversion is a user's desired targeted action on a site (such as purchasing a product or downloading documentation, recording a lesson). When the cost per click increases, sooner or later there will be a situation when it is simply financially impossible to pay for clicks on all keywords. And you have to choose which to work for and which not. Without conversion tracking, you can't find out what your earnings are and what to adjust. After all, it may well be that men after 40 bring a large share of income, and all women and men under 40 - just spend the advertising budget.

Conversion rate

The conversion rate shows the ratio of the average number of conversions to ad clicks as a percentage. This indicator allows you to learn about the return on investment. The higher it is, the more profitable your campaign will be. If your conversion rate is low, you should analyze aspects of your website, including design, navigation, relevance, payment process, and more.

Quick tips for tracking your conversion rate reduction:

• Check the working tracking code;
• Make sure all destination URLs work;
• Review your search queries to make sure your ads are showing on relevant queries;
• Make sure your ads and landing page information are out of date;
• Make sure your keywords and ads are active;
• Check for negative keyword conflicts;
• Make sure you optimize your conversion rate regularly.

Cost per conversion

In addition to understanding the number of conversions, another indicator that should be monitored regularly is the cost per conversion, which is your advertising costs divided by the number of conversions it generated. This metric can quickly show which campaigns are working and which aren't, or in other words, which ones are spending too much and not giving back.

To determine the optimal cost per conversion, you need to decide how much you are willing to spend on one sale of goods or services. In addition to taking into account the rate of return, it is very important to monitor the value of the customer throughout life (LTV). For example, is it likely that a customer will have to repurchase your products every few months? Is your customer base growing? If so, the high cost per conversion may be justified.

With a high cost-per-conversion, you should also review different levels of ineffective campaigns and change items accordingly: such as non-conversion keywords, ad text, calls to action, campaign-related landing pages.

Be sure to consider these metrics when analyzing your advertising campaigns and planning your next ones. The more you analyze performance, the better your understanding of what works and what doesn't.