Your AdWords PPC metrics explained
While Google does the heavy lifting when it comes to tracking metrics for your PPC campaign, it's up to us to discern what these numbers mean to your campaign's performance. Your PPC metrics help us understand what we're doing well, and what improvements can be made to ensure the ongoing success of your PPC campaign.
Our PPC experts have the foundation skills to make high performance campaigns, but there's always some test and learn involved in refining a PPC campaign so that it performs at its absolute best. What works well for one website might not be effective on another, and it's important for us to evaluate your PPC campaigns on a regular basis. We do this evaluation using the same metrics we share with you in your regular reports.
Let's delve a little deeper into the metrics we include in your PPC report, and talk about what they mean to us:
An impression is counted when a user searches one of the keywords associated with a campaign, and your ad appears. Your impressions serve as a loose baseline for the absolute maximum number of people who could have clicked on your ad. While it's impossible to convert every impression into a click, impressions still serve as a baseline for an ad's potential opportunity, and can help us determine whether it's reaching enough of an audience.
A click occurs when a user sees your ad in the search engine results, and then clicks on it, ultimately visiting your website. Clicks is an important metric to measure because it counts the number of potential leads coming to your site.
You can also use clicks to monitor the topics your potential clients are interested in, especially when you couple this information with impressions and click through rate. If you have a great ad that only receives a handful of clicks each month, it may indicate a topic that lacks opportunity and isn't worth concentrating your business on.
Click Through Rate (CTR)
Click through rate (CTR) is one of the most important metrics to gauge your PPC campaign's performance. Your CTR indicates the percentage of people who clicked on your ads upon seeing them. This metric is calculated using a simple formula:
- Clicks / Impressions = CTR
CTR helps us to understand how relevant our keywords and ad copy are to users who are searching on Google. Click through will be higher when ads are engaging and relevant to what people are searching for. As we refine and improve your ads, you should see your CTR hold steady or increase.
Average Cost Per Click (CPC)
Your campaign's average cost per click (CPC) is the average amount of money you were charged for the clicks on your ads. CPC is calculated by dividing the total cost of all your clicks by the total number of clicks received.
- Total Cost of Clicks / Total Clicks = CPC
Your cost per click will vary depending on competitor bids, maximum bid amounts, and overall ad Quality Score. Some markets tend to have a lower cost per click than others, and this information is something your PPC expert will take into account when evaluating your ads' performance.
Cost is the total amount of click costs accumulated throughout a reporting period, usually broken down by week or month. Your costs will fluctuate based on ad delivery and cost per click, but AdWords will never exceed the set monthly budget; you can rest assured that despite the natural fluctuations in PPC costs, you will always stay within your allocated PPC budget.
Average ad position is a metric that describes how your ad typically ranks against other ads that appear for the same search query. The highest achievable position is 1 and there's technically no bottom position. PPC ads can appear at the top, side, or towards the bottom of the organic search results.
Your average ad position can affect click through rate, but what works for one campaign isn't necessarily going to work for another. Some ads will perform best in the top position, while others will perform better in a lower position.
After a few months, the sweet spot for your specific campaign can be identified, and ad bids can be adjusted to ensure the best ad position is maintained.
A conversion occurs when someone interacts with your ad on Google and then takes an action that is defined as valuable to a business. For our clients, connecting with buyer and seller leads is paramount to their success. Therefore, we report that a conversion occurs when someone registers on the website or makes a phone call from an ad.
Cost per Conversion
Cost per conversion is calculated by taking the total click costs for a reporting period, and dividing that by the number of conversions received.
- Total Cost / # Conversions = Cost Per Conversion
A high cost per conversion generally goes hand in hand with a low conversion rate, both of which are largely affected by Quality Score. Making sure keywords and landing pages are relevant to the ad text is the easiest way to increase your Quality Score, lower the cost per click, and raise conversion rate.
Your conversion rate is the percentage of people who registered when they arrived on your website or made a phone call when they saw an ad. It's calculated by dividing the total amount of conversions by the total amount of clicks.
Conversion rate is important to measuring the overall success of a campaign, from location targeting to landing page. The higher the conversion rate, the more streamlined the user experience.
WordStream reports the industry standard conversion rate for AdWords real estate ads is 4.40%, while the average conversion rate across REW client PPC campaigns was 7.05% between January and October 2017.
Putting it all together...
The metrics in your PPC campaign tell us a story, letting us know what ads are working and which can be further improved. By paying attention to your metrics over time, we're able to create the most successful campaign possible for your business.
If you have questions at any time about your campaign, please feel free to reach out to your PPC expert. We're always happy to help our clients better understand the health of their campaign, and our plans for your future.