Google Ads Consultant

The Top 9 Performance Metrics You Should Know

You’ve got your account setup. Your campaign is launched. And your ads are live. Check! But now what. Is it working?

If you’ve been trying to figure out what’s up and down, and how to make sense of your metrics, then read this. Tracking your performance will tell you whether or not you are moving in the right direction and what you are actually getting out of your advertising. It’s also essential to know where to make any improvements so your campaigns can perform even better, and to get a higher ROI.

Google Ads provides you with valuable data insights and allows you to track performance in real-time. But you don’t need to spend hours checking every single one in your account. I am going to highlight the most important metrics, and break down each of them and their objective. Here is an overview of the 9 metrics;

 

1. Impressions

Impressions is the number of times your ads have shown. One impression is one ad view. Even though this actually doesn’t mean that it has been seen by the person. When your ad appears on the search results pages it means it is being triggered by a search term matching one of your keywords.

This is therefore the first thing you need to check to be working when your ads go live. Having a lot of impressions however, is not an end goal. Unless you are running Display and Youtube ads which are with image or video. But Search ads are all about your traffic and conversions. If your ad is showing but without clicks you aren’t winning. So impressions alone don’t tell much. You need to compare with the clicks. 

Calculation: When your ad is showing

 

2. Clicks

Clicks is, simply enough, the amount of traffic generated to your website from your campaigns. Relevant ads, and ads that stand out or rank higher are more likely to get clicks. When first launching your campaign, your goal is to get in traffic. And more exact, reaching your desired audience that is most likely to convert. Remember that it is the clicks you pay for. 

How much traffic you can expect to get in, will depend on your budget as this defines the clicks it can reach. Your budget should allow a fair amount of clicks, first of all to be able to convert, but also to have enough data to work on. Otherwise, it really depends on your goals and what is needed to give you profitable ROI!

Calculation: When your ad is clicked on

 

 

3. CTR

The CTR is the clickthrough-rate of your ad, which is calculated by the clicks on your ad compared to how many times it is showing. Your objective is to keep up the CTR. Not only because it means people are choosing your ad over others and bringing you new visitors, but because Google’s algorithm values this. A high CTR increases your ad quality. Google favors ad quality in their ranking which means you can win better positions this way. And eventually it means you can lower your CPC too. All attractive right? 

A high CTR indicates that your ad is relevant. Ads with higher click-through rates are often achieved by being closely related to the search terms, ranking in top positions, and by standing out with extensions and attractive ad copy. You can check CTR by campaigns, ad groups, keywords, or ads, to see which ones generate higher engagement.

Calculation: Impressions/ clicks

 

 

4. Costs

Costs show total costs of ad spend, and tells you how much you’ve spent on your campaign. It’s the amount you will be charged from Google. When you decide on a daily budget, your total costs in 30 days won’t exceed that amount on average daily spend. Let’s say your daily budget for a campaign is 20,00 €. The costs in 30 days won’t exceed 600,00 €. Google calculates this on an average however, so it means that some days can have higher or lower costs than others. You can therefore have 2 weeks spending over half your budget, but then less in the next days.

Calculation: Total costs of ad spend

 

 

5. Avg. CPC

The average CPC is your average cost per click. Your objective is to keep the CPC low, so you can pay less per click and get more visitors within your budget. The avg. CPC will often start higher when you’ve just launched your campaign, and then lower over time.

What your avg. CPC ends on, depends on many factors! It’s about the industry you are in, the competition, keyword match types, ad quality, geographic area and language you are targeting. But overall, high competition brings the costs up, and low competition brings the costs down. You should check your avg. CPC on a period of at least 2 weeks for a more realistic picture. The prices can vary from day to day, and changes in the account also takes time to reflect in the account.

Calculation: Costs/ clicks

 

 

6. Conversions

Conversions! This is one of the most valuable metrics in your Google Ads account. A conversion is a desired action taken by a visitor on your website, which you define in the account setup. So a conversion is counted whenever a click on your ad leads to a defined action that is valuable to you. It can be sending a contact form, subscription to a membership, signup to a free trial, a purchase or a call. All depending on your business and goals. It’s the conversions that drive value to your business. Your goal is to drive conversions to make your Google Ads profitable.

Calculation: Interaction taken on your website

 

 

7. Conversion Rate

The conversion rate indicates how many conversions you are getting compared to the number of clicks. This metric is important too! A high conversion rate indicates that your ads are performing well and that you get in relevant traffic. The higher the conversion rate, the more effective the performance of your ads.

Increasing the conversion rate of your campaigns can help you achieve better ROI. It’s therefore important to look at the conversion rate and not only the number of conversions. You may have a period with more conversions, but where you also had double the amount of traffic. In that case it won’t necessarily mean that your conversion rate has improved. 

Calculation: Clicks/ conversions

 

 

8. Conversion Value

Conversion value is the total value counted from your conversions. This metric is relevant only if you have defined a value to your conversion actions. When selling products for example, the conversion value will then be the value generated from your sales. You can also set a conversion value to conversion actions such as a signup, free trial, or lead form, even though there isn’t a direct purchase. This should be defined depending on the estimated value it brings to your business. Knowing your conversion value helps to calculate what you are getting back from your investment. Check the conversion value divided by total costs to know if it’s positive ROI.

Calculation: Conversions * conversion value

 

 

9. Cost pr. Conversion

Cost pr. conversion shows how much you spend to acquire one conversion. It is calculated by dividing the total costs of conversions by the total number of conversions. Ideally, you should be spending less on acquiring one conversion than your earnings from it to be profitable.

Ultimately, your goal is to keep costs per conversion down to increase profits. Just remember that lowering the cost per conversion is a process! It’s normal to start out with higher costs per conversion on your account. You need time to improve campaign performance, to see improvements in this metric. 

Calculation: Costs/ conversions

 

 

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