How do you know what the metrics in Google Ads mean and which ones matter the most? The latest version of Google Ads’ interface has a particularly large number of metrics, so it’s easy to get overwhelmed when you first log on.
Each page has a table full of data, including a graph of metrics and various reports. It’s a little like looking at an airplane cockpit for the first time, with all its lights, switches and gauges. However, experienced advertisers know that all the information in Google Ads allows you to dig into your campaign performance and find ways to improve it.
Which Metrics Really Matter?
The most important Google Ads metrics include the following:
- Cost-per-click (CPC)
- Clickthrough rate (CTR)
- Conversion rate
- Cost-per-acquisition (CPA)
CPC is an advertising model in which an advertiser pays a website owner each time a user clicks on an ad. First-tier search engines like Google Ads typically use a CPC model, because advertisers can bid on key phrases that are relevant to their target market. In comparison, content sites typically charge per 1,000 impressions of the ad.
CTR, or clickthrough rate, is the ratio of users who click a link to the total number of users who view the ad. CTR generally indicates a marketing campaign’s effectiveness in attracting visitors to a website.
Conversion rate is the ratio of goal achievements to the number of visitors. It’s essentially the proportion of visitors who take a desired action as a result of your marketing activity. The specific action that a conversion rate monitors depends on the type of business you’re promoting. For example, online retailers often define a conversion as a sale, while services businesses consider other actions, such as a request for a quote, a demo sign up or a report download, when measuring conversion rate.
CPA, or cost per action, is the total cost of your ads divided by the number of conversions. Again, the specific action depends on the type of business you’re promoting. For example, CPA for online retailers is typically the cost per e-commerce sale. Services businesses typically measure CPA as a cost per lead. This number is critical, because it tells you if your campaigns are profitable or not.
How Can Metrics Help You Improve Performance?
Poor metrics can indicate courses of action that can help you improve your Google Ads campaign performance.
A high CPC could mean that you need to raise the quality scores for your ad, which could reduce the cost of each click. You can also accomplish this by using ad scheduling and geotargeting to ensure your website doesn’t show ads during times or in locations where you don’t do business. Additional strategies for reducing CPC include using demographic targeting, in-market audiences and remarketing to narrow your audience to just the people who are interested in your business.
A low CTR can indicate that you need to review the keywords and ad copy in your Google Ads account. For example, you should ensure that you’re only bidding on keywords that relate to your offers. You should also perform A/B testing on your ads to determine the factors that interest your prospects the most, whether it’s features, benefits or some emotional trigger. You can also improve CTR by ensuring that your ad takes up as much room as possible by implementing ad extensions.
A low conversion rate can indicate that you need to take a closer look at your landing pages, where visitors go when they click on an ad. These pages should be very clean and quick to load to ensure visitors don’t lose interest after they click. Your ads should always send visitors directly to a dedicated landing page, rather than just your home page or even a general landing page.
A high CPA means that you aren’t getting a good return on investment (ROI) from your ad spend. Possible causes of a high CPA include a high CPC or low conversion rate, which often means a poor choice of keywords and ad copy. Concentrate your budget on high-converting keywords with a high intent to buy.
Google Ads provides many metrics that can tell you how to improve website performance. However, this information can also be daunting to interpret if you don’t know what it means. Follow the tips above to monitor your key metrics and make adjustments to improve your Google Ads performance.
Want more tips to improve your Google advertising? Get your free copy of our “Ultimate Google AdWords Checklist.”