In today’s era of digital marketing, Pay Per Click advertising (PPC) is one of the most effective techniques used to accelerate business growth. PPC allows your brand to reach the target audience and move ahead of your competitors. In the beginning, significant costs and effort are required to run the campaign, but in the long run, PPC can bring desirable brand awareness and a high return on investment.
However, to move forward in the right direction, it is important to study the degree of success in your efforts. Thus, digital marketers make use of Key Performance Indicators (KPIs) to measure the success of their PPC campaigns. They match their goals with the appropriate KPIs and plan for the next phase. Knowing what you want to achieve from your advertising campaign and measuring its performance are critical for your campaign’s success.
Here are some of the most used KPIs to measure the performance of PPC advertising.
Click-Through Rate (CTR) is one of the very first and vital indicators used by digital marketers to track the performance of their PPC initiatives. Based on this indicator, many marketers decide whether to accelerate the campaign or pause it. Remember that your target audience clicks on your ad only when they find it relevant and interesting. Thus, if your campaign’s CTR is low, you must reconsider your campaign design and work to improve the plan.
CTR is calculated by dividing the total number of clicks with the total number of impressions. So, if your PPC ad has 1000 impressions and was clicked 20 times, then your CTR would be (20/1000)X100= 2%. For every industry, PPC click through rates are different. So, you want to constantly keep track of the CTR for your industry and then compare it with your CTR before moving forward.
To maintain the quality of the ads, Google has created a KPI that judges your advertisements according to the quality and relevance of your PPC ad content. Quality score is measured using multiple metrics like click-through rate, landing page quality and the relevance of your ad. Here, the score is measured on a scale of 0 to 10. On this scale, 5 is the mean and the ads scoring above 7 are considered to be good quality advertisements. Thus, to keep a good quality score, improve the content of your ad copy and landing page.
To measure the success of your ad, it is important to know how many people have seen your ad. Here comes the importance of the impression share. The goal of every PPC advertising campaign is to attract and influence the audience to click on the ad and eventually convert them to customers. Thus, measuring the impressions is an effective means to understand the number of clicks and conversions from your PPC ads. It gives you an idea of where you stand compared to your competitors.
Attracting visitors to your website is incomplete without converting them into valuable customers. The conversion rate varies across industries and depends upon factors like an attractive ad title, relevant copy as well as a user-friendly and informative landing page. The conversion rate is defined as the number of conversions divided by the total number of clicks. For example, if a campaign has 5 conversions out of 100 clicks, it means that the conversion rate of the ad campaign would be 5%.
Cost Per Click
The cost per click is a metric that determines the price paid by the advertiser for the clicks on an ad. In a market where advertisers compete with each other and bid for top ad positions, cost per click is a very important indicator to run your ad campaign. Cost per click or CPC is calculated by dividing the total “cost of a campaign” by the number of times the ad gets clicked. So, if your campaign is doing well, your total advertising costs will certainly be higher.
PPC ads are mostly shown on the top of Search Engine Result Pages. The search engines balance these paid searches based on factors like the bid, content relevance, ad copy attractiveness and so on. The average position of your ad informs you of where your ad typically ranks on the Google Search Rankings. The search engines cannot provide the first position to the highest bidder as there are many other factors that determine the position of a PPC ad.
Tracking KPIs For Best Results
The above-mentioned KPIs are some of the most common indicators to track your online PPC ad campaign. However, as every business is different and has unique advertising requirements, the value of certain indicators can be more or less than others depending on your marketing objective. Thus, it is always a good decision to hire a digital marketing professional who can coach you on using KPIs effectively.