5 Key Metrics You Should Be Monitoring In Your Google Ads Campaign
Share this post
March 25, 2021
While Google Ads is an excellent way to drive quality traffic to your site, it can also open up your business to overspending if your campaigns are not optimised regularly. We've listed the top five metrics to monitor in Google Ads campaigns.
1. Click Through Rate (CTR)
# of Clicks / # of Impressions = Click Through Rate
For the most part, CTR is the biggest factor that affects Google Ad campaigns. The CTR of a campaign is a reputable indicator of how effectively your Ads and keywords target your audience and if it’s relevant. For example, a high CTR leads to a higher Quality Score, which, as a result, reduces Cost Per Click.
A high CTR is a good sign that users find your Ads relevant and helpful. The more your Ads, keywords and listings relate to one another and to your business, the more likely a user will click on your Ad after searching in your targeted keyword.
High Click Through Rate > Good Quality Score
As mentioned above, a good CTR has a snowball effect on the rest of your campaign. Each of your Ads and keywords has its own CTR listed in your Google campaign account.
2. Cost Per Action
Total Cost / Total Actions = Cost Per Action
The calculation for how much you spend to achieve an action, like a new customer registration, is essentially the Cost Per Action. Unlike other Google Ad metrics, Cost Per Action uses the customers’ actions to give you an insight throughout their entire experience.
Cost Per Action is often considered as the optimal way to analyse the outcome from Ad expenditure. For example, how many people signed up to the newsletter, purchased a product, and all alike.
The difference between your Cost Per Action and Revenue Per Action is profit. It’s important to remember that multiple factors come into your conversion funnel:
The Quality Score (QS) is not just important for your Google AdWords algorithm, but it’s also how Google tells you what you need to work on to better your Ad campaign. The better your QS the more likely your Cost Per Click’s decrease, your average positions increase, and your Conversion Rate increases.
When new keywords go live, the QS diagnostics aren’t too much of a worry. Within a few weeks of new keywords, the QS will settle down - and if it doesn’t, then you’ll need to make some changes.
Your QS is one of the most valuable metrics to optimise your campaigns. Be sure to keep your QS at around 5 - with 4 being the minimum unless your Ad strategy is based on Ad groups and relevant keywords that target your competitor terms.
4. Cost Per Click (CPC)
Total Cost of Clicks / Total # of Clicks = Cost Per Click
If you want to keep on top of what’s happening with your Google Ad campaigns and account, CPC is useful. As CPC is a variable in Google’s algorithm, some increases and decreases have a significant impact, including:
Changes in competition
Changes in bid prices
Improvements in CTR
Improvement in QS on your landing page
Improvements in Ad relevance
If you keep an eye on your CPC, you eliminate the risk of overspending. With such variables, there will constantly be ups and downs with the cost you pay for clicks.
5. Conversion Rate (CR)
# of Conversions / # of Visitors = Conversion Rate
The main goal of a Google Ads campaign is to drive more conversions through traffic. As Pay Per Click (PPC) marketing is a channel that relies solely on user interaction, your Ads’ role is to get people to click through to your landing pages.
If 100 people click through to your website and 10 of them convert, your conversion rate is 10%. Depending on your business, a ‘conversion’ could be anything, like:
Making a purchase
Contacting your business
Signing up for a newsletter
Engaging with an online chatbot
Not only does your CR represent the effectiveness of your keywords, Ads and landing page, it can also reduce cost. For example:
High Conversion Rate > Reduced Cost Per Click
All in all, Google Ads is an excellent channel for your marketing - you have control over your ads with access to many metrics for analysing and tracking your campaigns. But just like anything else, with a lot of metrics to review, the entire process can be overwhelming if you don't monitor the metrics that matter the most.