A number of important metrics need to be taken into account when analysing your PPC campaign performance in order to prove your ROI and these metrics should be given importance based on the end goal you are trying to achieve. Even though some of these metrics have a popular reach such as the ‘click-through rate and average position but others need to be put into use. If you are trying to prove the ROI of your PPC campaign then there are some metrics you need to concentrate on just as any boutique digital marketing agency does, which will be discussed here.
ROI changes depending on a number of factors and these changes affect your campaign. Some of the ways the ROI varies are:
- Increase or decrease in average sale
- Increase or decrease in cost per click which affects the spend on advertising as well.
- Increase or decrease in conversion rate
Based on this, advertising cost, clicks conversion and revenue becomes the major factors affecting the ROI of your campaign.
The PPC metrics to be concentrated on are:
Clicks and Impressions
The first and most important metric to focus on. Clicks and impressions are a major factor in deciding the revenue of your PPC campaign. While impressions measure the number of times an advertisement is displayed, clicks give the number of times these ads were clicked on. These are important because with pay per click advertising, you’re being charged for every click on your ad and to know how much you made with each click you will be able to determine how much you need to pay for each click which will help you understand effective bid strategies. If the clicks and impression increase you can increase the ad budget and if they decrease then you can look for the problem in your ad.
Cost Per Click
Cost per click is the average amount you pay per ad click. This is a basic metric, but an important one because it informs you about how much you are paying for each ad. Cost per click varies in every industry and can be high or low for some keywords based on the competitiveness.
Click Through Rate
The number of times an ad is click on compared to the number of times it was shown determines the click through rate of your ad campaign.
Based on the past click through rate of your keyword, google issues a number which is termed as the quality score. The quality score is used by Google to determine the ad rank and to make sure that the highest positives go to most relevant ads. A high-quality score means that your keyword and landing page are relevant to the person going through your ad.
This score is considered as a major point by most of the digital marketing agency usa .
The number or impressions an ad receives compared to the number of impressions it should have received determines the impression share. After looking at the impression share you can decide whether to increase the budget or to change bids.
On the other hand, lost impression share is what allows you to find out how many impressions were lost due to budget restrictions or low ad ranks.
Conversion rate gives you the per cent of purchases made. It measures the number of clicks made on your ad and how many of those clicks actually resulted in a conversion – sale, lead, sign up, etc.
Cost Per Impression
The per cent of conversion after an ad was clicked to the number of times the ad is shown.
Cost per Conversion
The cost spent on acquiring a sale or a lead is termed as the cost per conversion.
Return on Ad Spend
ROAS or Return on ad spent is used to know the value and outcome of an ad campaign. Return on ad spent calculates how much revenue was earned for each spent. Higher the ROAS, higher the return.