Having learned the benefits of PPC advertising, many companies are taking up this model as a part of their digital marketing campaign. Earning organic visits is time-consuming and by the time you do that, you would be swept away in the competition, contradictorily, even though you have to pay PPC campaigns let you earn visits and conversions in less time.
If you are setting up a PPC campaign for your small business, you should know certain things, like you have to track, monitor, and make necessary adjustments on certain key performance indicators (KPIs).
Key performance indicator abbreviated as KPI is a quantifiable measure that indicates how effectively an organization doing in reaching its business goals and objectives. For every business, there are specific KPIs and you have to select those which you feel relevant and once you do you can monitor them in real-time by making use of reporting tools.
There are marketing metrics, financial metrics, sales metrics, and executive metrics, but whatever business process you are into, you have to focus on KPIs.
Now if you are managing a PPC campaign, you know there is a huge amount of data, so check out these 5 metrics to measure the success of your campaign.
PPC Metrics that you should Swear-By
- The first point of conversion begins when a customer clicks on the Ad. This KPI allows PPC marketers to gauge how many times the ad was clicked and measuring this throughout the month, will make it easier to determine whether continue with the ad or remove it.
- Click-Through-Rate (CTR)
- Click-through-rate abbreviated as CTR is a metric that gives advertisers the number of clicks they receive on their ads per number of impressions.
- It is formulated as,
- Say out of 5,000 impressions, 500 ads were clicked that means your CTR is 5%. So, PPC click-through-rate is the rate at which PPC ads were clicked. Campaigners need to focus more on this metric as it directly affects the quality score and thereby your ad position.
- The relation can be defined in some way like this,
- Note: Higher CTR is not always good for business because for every click you are paying, and of course for the keywords that are high priced. So one thing you have to make sure is using keywords that are relevant and affordable.
- Quality Score
- A quality score defines the quality of your ad campaign. Quality score is actually a metric created by Google to tell how relevant is your ad designed for people who view it. The more relevant the ad is, better will be the ad position at minimum cost.
- If you want to understand quality score in a better way, then compare it to your credit score. Better the credit score higher will be your chances to qualify for a loan with less interest rate to pay.
- As per definition by Google, ‘it is an estimate of the quality of your ads, keywords, and landing pages.’ So better the quality, lesser you have to pay for higher ad position. Quality score is awarded on a scale ranging from 1 to 10, with 10 being the highest, measuring quality score is very crucial as it helps you determine your optimization efforts and improve our ROI.
- According to AdWords expert Brad Geddes, Quality score can be calculated by,
- Cost-Per-Click (CPC)
- The performance of each and every metric will impact the other. The cost-per-click metric measures exactly how much an advertiser has paid for the ad.
- Also, know as (PPC) pay-per-click, CPC is measured by
- For instance, if the cost of the total campaign is $200 and there are 23 clicks then CPC would be $8.69.
- Understanding the cost of campaigns, digital marketers can then relate them to product and sales and make better spending in the future.
- According to WordStream, a search marketing company, CPC can be defined in another way,
- As per this formula, it can be implied that actual CPC is determined considering you and competitor’s ad rank, maximum bid, and quality score.
- Cost-Per-Conversion/Acquisition (CPA)
- Another important metric, cost-per-conversion measures the cost incurred by an advertiser to get one conversion.
- A conversion can be anything, a subscription, making a purchase, signing up for a newsletter or something, or even watching a video, it depends on for what purpose you have designed the ad.
- CPC is given by,
- For instance, if a campaign costs $100 for 100 views, and 10 conversions were generated, then CPC is $100/10, which is $10 per conversion.
- By measuring CPC, you will get a clear idea to efficiently manage your budget. Also, one thing you will learn is by increasing conversion rate, you can lower your cost per conversion.