When running a successful Google Ads campaign, it’s all about the numbers. By understanding the data that Google Ads supplies, you can understand how your campaign/s is performing and optimise for future success.
But which key performance indicators (KPIs) should you be closely monitoring to ensure your digital marketing efforts are paying off? In this blog post, we’ll dive into the top 10 KPIs every savvy marketer should track.
Get ready to supercharge your Google Ads game and make data-driven decisions that’ll have your campaigns bloomin’ with success.
Why is it important to measure Google Ads KPIs?
Google Ads KPIs serve as a guide and a means of objectively assessing campaign performance. They enable you to understand which campaigns and strategies yield results and which require adjustment.
KPIs provide a concrete measure of Return on Investment (ROI), helping you to justify ad spend and refine your budgets for maximum efficiency. And, by scrutinising them, you gain insight into areas ripe for optimisation in:
- ad copy,
- keyword selection,
- or audience targeting,
Enhancing your campaign effectiveness and offering proactive competitor analysis – so you can stay one step ahead.
How to include all of these KPIs
Excluding ROAS, all of the Google Ads KPIs we will supply in the following list are easily available within the Google Ads dashboard. No calculations or spreadsheets are required!
You can quickly access this data here when viewing your campaign data.
You will be supplied with dozens of different metrics, and it will look like this:
The Top 10 List of Google Ads KPIs
You can use dozens of KPIs to monitor your campaigns’ performance. Below is a list of the ones we suggest you prioritise. However, there might be one we have missed off our list that is essential for your business. For example, many marketers like to analyse their CPM (cost per mille – or a thousand impressions) – we have left that off our list, but don’t forget to include it in your stats if it’s relevant to your business.
1) Clicks
In the Google Ads dashboard, “clicks” refer to the number of times users have clicked on your ads. Each time someone interacts with your ad by clicking on it, Google registers a “click.” This metric is crucial for assessing the performance and effectiveness of your advertising campaigns. It helps you understand how many users engage with your ads and visit your website or landing page due to those clicks. Clicks are a fundamental component of Google Ads KPIs and help calculate Click-Through Rate (CTR) and Cost Per Click (CPC), which are used below.
2) Impressions
Impressions represent the number of times your ads have been displayed or viewed by users within the selected time frame.
Each time your ad appears on a user’s screen, it counts as an impression, regardless of whether the user interacts with the ad by clicking on it.
Impressions are a fundamental metric for understanding the visibility and reach of your Google Ads campaigns. They can help you gauge how often your target audience sees your ads. When combined with other metrics like CTR, impressions provide insights into ad performance and audience engagement.
Monitoring impressions is essential for assessing the effectiveness of your ad placement, ad targeting, and ad copy. It can also help you identify trends in ad visibility and seasonality in user behaviour, allowing you to make informed adjustments to optimise your campaigns for better results.
3) Click through rate
CTR, or Click-Through Rate, is calculated as the percentage of users who clicked on your ad after seeing it relative to the total number of users who viewed your ad (impressions).
CTR = (Clicks / Impressions) x 100
CTR is a crucial metric because it measures the effectiveness of your ads in enticing users to take action, specifically clicking through to your website or landing page. A higher CTR generally indicates that your ad resonates well with your target audience and that your ad copy, keywords, and targeting are on point.
A well-optimised CTR is essential for achieving a solid return on investment (ROI) from your Google Ads campaigns. It signifies that your ad spend is used efficiently to drive traffic to your site. By monitoring CTR, you can identify which ads and keywords are performing well and which might need adjustments, allowing you to refine your campaigns for better results.
4) Cost per Click
CPC stands for Cost Per Click, and it represents the average amount you pay each time a user clicks on one of your ads. It’s calculated by dividing the total cost of your advertising campaign by the total number of clicks:
CPC = Total Cost / Total Clicks
CPC helps you understand how much you spend to acquire each visitor to your website or landing page. A lower CPC indicates more cost-effective advertising, while a higher CPC means paying more for each click.
Monitoring CPC is essential for budget management and campaign optimisation. By analysing CPC data, you can identify opportunities to reduce costs while maintaining or improving your ads’ quality and relevance. This optimisation process can help you achieve a better return on investment (ROI) and ensure that your advertising budget is used efficiently to drive valuable traffic to your website.
5) Conversion Rate
Conversion Rate represents the percentage of users who take a desired action on your website, such as making a purchase, filling out a form, or signing up for a newsletter after clicking on your ad.
Mathematically, it is calculated as follows:
Conversion Rate = (Number of Conversions / Number of Clicks) x 100
A high conversion rate indicates that your ad is driving traffic and persuading users to take the desired actions you’ve set as goals. It strongly suggests the relevance and effectiveness of your ad copy, landing page, and overall campaign strategy.
Conversion Rate directly ties ad clicks to valuable actions that impact your business goals. By optimising your campaigns to increase the conversion rate, you can maximise the return on your advertising investment and achieve a higher level of success with your Google Ads campaigns.
6) Cost per acquisition (CPA)
CPA, also referred to as cost per conversion within the Google Ads dashboard, measures the average to acquire a customer or lead through your advertising campaigns.
It is calculated by dividing the total cost of your campaigns by the number of conversions:
CPA = Total Cost / Number of Conversions
CPA reflects how efficiently your advertising budget is used to acquire valuable customers or leads. A lower CPA indicates that you are acquiring customers or leads at a lower cost, which is generally a positive outcome for your business.
By monitoring CPA, you can assess the cost-effectiveness of your advertising efforts and make data-driven decisions to optimize your campaigns. Lowering your CPA while maintaining the quality of your conversions is a common goal, as it allows you to achieve a higher return on investment (ROI) and make the most of your ad spend.
7) Search Lost IS
Search Lost IS (Impression Share) indicates why your ads may not show as often as they could on the search results page.
There are two main components of Search Lost IS:
Search Lost IS (Rank): The percentage of potential impressions your ads lost due to your ad’s rank being too low to be shown in a higher position. In other words, it indicates that your ad’s quality, relevance, or bid might not be competitive enough to secure a higher ad position. Improving ad quality, increasing bids, or optimising keywords can help reduce Search Lost IS (Rank).
Search Lost IS (Budget): The percentage of potential impressions your ads lost due to budget constraints. It means that your daily or campaign budget was exhausted, preventing your ads from appearing more frequently. To address this, consider increasing your budget or reallocating it to prioritise campaigns with higher performance.
Analysing Search Lost IS can help you identify specific areas for improvement in your Google Ads campaigns. For example, if you have a high Search Lost IS (Rank), you should work on your ad quality and relevance to improve your ad rank. If your Search Lost IS (Budget) is significant, you may need to adjust your budget allocation to ensure your ads can appear more often.
Reducing Search Lost IS can lead to a higher impression share, better visibility, and more clicks and conversions for your Google Ads campaigns.
8) Quality Score (I’m not sure this is available anymore. Is there a better one?
Quality Score is not viewed at a campaign level. To locate this information, you need to use the menu on the left side of your dashboard. You’ll find ‘search keywords’ within Audiences, keywords and content.
Quality Score assesses the quality and relevance of your keywords, ads, and landing pages within your advertising campaigns. It plays a significant role in determining your ad rank and the cost-per-click (CPC) you pay for your ads.
It’s calculated based on 3 components:
Expected Click-Through Rate (CTR): This component evaluates the likelihood that your ad will receive clicks when shown for a particular keyword. It considers historical CTR data for the keyword and ad combination.
Ad Relevance: Ad relevance assesses how closely your ad copy matches the intent of the user’s search query. Ensuring that your ad content aligns with the keywords you’re targeting is crucial.
Landing Page Experience: This component evaluates the user experience on the landing page that your ad leads to. Google looks at factors like page load speed, mobile-friendliness, and the relevance of the landing page content to the ad and keyword.
Quality Score is measured on a scale of 1 to 10, with 10 being the highest. A high Quality Score indicates that your keywords and ads are highly relevant to users’ search queries and are likely to perform well.
The impact of Quality Score on your Google Ads campaigns is significant. It affects:
- Ad Rank
- CPC
- Ad Extensions
To improve your Quality Score, focus on:
- Creating highly relevant and targeted ad copy.
- Using relevant keywords that match user intent.
- Ensuring that your landing pages provide a seamless and informative experience.
- Regularly monitoring and refining your campaigns based on performance data.
Aim for a high Quality Score to enhance your Google Ads campaigns’ overall effectiveness and cost-efficiency.
9) Impression Share
Impression Share indicates how often your ads are shown in relation to the total number of times they could be shown.
Impression Share (IS) = (Number of Impressions Received / Total Eligible Impressions) x 100
It’s expressed as a percentage and represents the share of impressions your ads received compared to the total number of impressions available for your selected keywords and targeting settings.
Impression Share is valuable because it provides insights into the competitiveness and reach of your ad campaigns. By analysing it, you can identify opportunities to increase your ad’s visibility, improve your ad rank, or adjust your budget to capture more potential impressions, ultimately driving more traffic to your website or landing page.
Generally, a higher IS is preferred because it indicates that your ads appear more frequently when users search for relevant keywords. A few guidelines to consider:
80% or Higher: 80% or higher is excellent.
Above 60%: 60% is a strong indicator of effective ad campaigns.
Between 40% and 60%: Falling within this range is considered decent, but there may be room for improvement.
Below 40%: 40% and below suggests significant room for improvement. Your ads could be appearing more frequently, which could be due to factors like low ad rank, budget constraints, or ad quality issues.
10) Return on ad Spend
“In digital marketing, Return on Ad Spend (ROAS) is a metric measuring the revenue your business earns for every dollar it spends on advertising. In simple terms – it is the return of advertising expenditures. ROAS gives insight into the effectiveness of a specific ad campaign, not the overall Return on Investment (ROI) – more on that next. It places a numerical value on your marketing efforts and how well your advertising message/s connect with prospects and generate a return.” (source)
You’ll need to create a custom column to measure ROAS within your Google Ads dashboard.
Summary
Ultimately, these 10 metrics ensure that your Google Ads’ campaigns not only generate clicks but also contribute tangibly to your bottom line.
Measuring Google Ads’ KPIs is not just best practice; it’s an essential strategy for you or your digital marketing agency to navigate the dynamic and data-driven realm of online advertising.
For help or a free audit of your Google Ads, get in touch with our digital marketing experts. We have decades of experience and are here with judgment-free advice and recommendations for e-commerce and lead-generation businesses.
