Digital advertising is everywhere and anywhere. Companies are advertising on Google Ads to promote their products or services all over the world. There are a plethora of metrics that Google Ads uses but not many advertisers know exactly what they all mean and which ones are important to monitor the growth of their business. Understanding the key metrics that are valuable to your business will guide better decision-making and improve campaign performance.
The seven main pay-per-click (PPC) metrics that matter in Google Ads are impressions, clicks, cost, conversions, conversion value, conversion value/cost (also known as return on ad spend or ROAS), and cost/conversions (also known as cost per acquisition or CPA).
- Impressions: An impression is recorded each time your ad appears on a search. This metric helps gauge the frequency with which your ad is viewed. Tracking impressions is important because it shows how many users have seen your ad and is critical for awareness and visibility.
- Clicks: A click is simply when someone clicks on your sponsored ad on their Google search results page, on YouTube, or on a partner website. Clicks help advertisers measure the amount of engagement that their ad is receiving and can be a key indicator of their ad copy resonating with a potential customer.Â
- Cost: Another important PPC metric, cost is the sum of your ad spend over a period of time. Cost is important because it directly shows how much an advertiser is investing in their Google Ads. Advertisers also need to understand cost to effectively manage their budget and cost efficiency. Advertisers need to know that more or less budget does not always mean better results. There are many other metrics that will also impact ROI.
- Conversions: Next up are conversions, which show the number of actions taken on your website that could result in a purchase, phone call, form fill, chat, and more. For a service-based company, a conversion could be a phone call or form fill that leads to an appointment being set for their service to occur. For ecommerce businesses, a conversion is a purchase on their website. Conversions are the main metric that advertisers analyze to measure campaign success.
- Conversion Value: The next metric, conversion value, is the sum of the dollar amounts for your conversions. For example, if you sold five products on your website worth $1,000 each, your total conversion value would be $5,000. This PPC metric can inform advertisers about profitability and show how much money they are bringing in before subtracting their ad spend.Â
- Conversion Value / Cost: Another important metric to look at is conversion value/cost, also known as return on ad spend (ROAS). This PPC metric measures your return on investment, which is your conversion value divided by the total ad spend per campaign. The higher the ROAS, the more money a company makes per purchase. Ways to influence ROAS include spending less or improving the conversion rate. This metric will help advertisers gauge their profitability margins and is used all the time for ecommerce businesses.
- Cost / Conversion: The final metric that we are going to talk about is cost per conversion, also known as cost per action (CPA). This metric tells you the average cost per conversion and is typically used by lead-generation advertisers. CPA data can be improved by attaining conversions at a cheaper rate through smart bidding in Google Ads.
In the end, every metric in Google Ads is useful and important to analyze the success of campaigns, but these seven PPC metrics are the most common and important ones that advertisers tend to look at. Identifying the key metrics valuable to your business enhances decision-making and boosts campaign performance that will propel your business to success.
