Understanding your AdWords metrics is vital to running successful AdWords campaigns. We’ll walk you through the basics so you’re always on top of campaign performance.
After using AdWords you’ll certainly have noticed the ton of analytical options to depict how things are going for your campaigns. Rates, percentages, and whatnot. In saying that, you probably know what comes next. More lessons about using the AdWords platform!
Knowing how to measure the health of your campaign determines how you evaluate your performance and what are the next moves to make for your ads. It can be tricky choosing which metrics are the most helpful. Especially, when you are new to learning what the heck most of them even indicate. So put your thinking caps on, but don’t worry Teacup is here to be a helpful tutor.
Using AdWords Metrics To Evaluate Campaign Health
If your ad is up and running and getting activity that is a great place to be! The next step is to determine the health of the campaign. Some metrics should be small numbers while you’re hoping for big numbers elsewhere. It can become overwhelming. However, that really depends on your goals for the campaign. Most goals fall under ROI, awareness, web traffic and conversions.
Return on Investment (ROI) Metrics
This goal track customer activity like sales and leads, and how much net profit it has brought you. Finding out if your investment with AdWords is proving to be positive. The number one metric to look at for ROI is Conversions or Cost Per Acquisition. So make sure to implement conversion tracking for your campaign.
Make sure to set up AdWords tracking on your website!
Want to know if you are being seen and recognized? Then choose the metrics of awareness. These will show how visible your ad has been and how high traffic to your site has been. Ideally in front of the right audiences. The most popular metric for awareness is Impressions and Click through Rate. So you want big numbers for both. Another to look at is Ad Position, if your position is between 1 and 2.5 your ad is much more visible.
Website Traffic Metrics
The metric for web traffic is also focused on big numbers for both CTR and number of clicks. This means your content was compelling enough to visit your site. Another big metric is Quality Score. This is a great measurement of how the entire experience of your ad is performing. From ad copy, position, conversion and website click through. These metrics are pretty standard for most campaigns and worth taking a look at for any type of campaign goal.
Tracking Conversions With AdWords Metrics
Similar to ROI you want to know if your ad is driving business activity. The difference being that ROI focuses on the net profit these conversion activities bring. These can be calls, emails, sales, downloads and other forms of contact. Here you would also look at Conversions, Conversion Rate and CPA. So of course you would have to implement conversion tracking.
It’s a good practice to have one goal per campaign so you can clearly look at the accompanying metrics and guide the activity on your campaign to improve those metrics.
Marketing is a process, not a decision…and never a magic trick.
What Are These AdWords Metrics Anyway?
One of the best metrics to evaluate the overall health of your campaign is Average Position. This metric shows how your ad is placed against the other ads you are bidding with. Average position describes which order your ad is placed on the page. Good position is 1-3. This means you’re usually showing up at the top of searches.
Your rank may appear with a decimal like 1.8 or 2.3 but that’s simply because it’s averaged out over multiple impressions. Teacup recommends aiming to have an avg. position of 2.5 or higher. Several elements such quality score and your bid impact a good position so it can be a nice starting place to evaluate the performance of your campaign.
Cost Per Conversion
This AdWords metric is all about action! We’re talking about the cost of getting a customer to act. A conversion can be considered contact your business, online purchase, download your app or whitepaper, subscribing, or even clicking through to a place you want them to view. And no this is not CPC (that’s cost per click). Here you obviously want to keep your cost per conversion number going down, enabling you lower costs or increase volume. So think how much it is worth to your business for someone to complete that action.
Why this gets confused for cost per click (CPC), other than the easily mixed abbreviation, is because it is a combo of measuring clicks and your conversion rate. Measuring total spend and total action, which are normally a clicks somewhere you have designated. The place of action. Wherever this place is you must have conversion tracking for this metric to work.
Cost Per Acquisition-CPA
A related AdWords metric is Cost Per Acquisition, also knows as CPA. This is also a measurement of action. CPA is focused on acquiring a customer, normally a sale. So this is NOT for downloading whitepapers, viewing a video, or subscribing to a newsletter. CPA is more so advertising spend rather than wanting your customers to do something which is more so Cost Per Conversion.
While the difference are slightly small and nuanced, for both you want the numbers to be low, because as the name states it is a cost. So similarly take your total cost and divide it by the number of leads acquired or sale.
Cost Per Click-CPC
Ok, so the one a lot of us are more familiar with are the costs for those clicks. It’s probably because this is a big determinant of the cost of your campaign. You gotta pay each time your ad gets a click. As we’ve said before you want this number to be low. This is another metric to watch frequently because it has a lot of reasons as to why it may increase or decrease. When looking at the health/cost of your CPC take a look at changes in:
- Quality score
- Bid Price
- Ad text or relevance
Remember, avoid overspending for a click, so to keep things low be active in getting a better quality score, notice which keywords work and which don’t and your match types.
Click Through Ratio- CTR
Another very popular Adwords metric is Click Through Rate or Ratio. This is a measurement of how many people who see your ad click on it. Obviously that would indicate a lot about your ad content. If you have relevant keywords and enticing ad copy your CTR should be awesome. But if your CTR is low your ad copy may lack or your keywords are not relevant then your CTR may be hurting. So try to improve these areas for a better CTR:
- Ad copy
- Adjust links
- Use extensions
- Make sure keywords are relevant to areas and audiences you target
This also has a cascading indication, if you have a high CTR your Quality score should improve then reducing your CPC. As well as competition notification, if your CTR goes down competition might be stealing your spotlight and vice versa.
At the end of the day a good CTR is 2% and above.
We love this AdWords metric! We never shut up about is Quality Score, however while an important one you shouldn’t default to only looking at this metric. Here it is all about relevance. Especially for Google. They are determining you QS frequently, rating the relevancy of your keywords, how helpful/attractive your ad is and landing page experience. It certainly could be seen as an accumulation of all of these metrics performing well.
A healthy Quality Score is about 6 through 10. With 10 being the best! Even further along, if your QS has a good score your Cost per click should lower and your page position should get closer to #1.
Let’s discuss the rate of conversions. The rate at which people complete the trackable conversion action like downloading an app, online purchase or contacting your business to name a few previously mentioned. This is a big indicator of which ads have the best response to action. But remember you cannot measure the conversion rate without installing conversion tracking to your campaign and site. Here you want these numbers to be high. Which helps lower your Cost Per Conversion, which can help you bid higher or increase volume.
This is about the number of eyes, looks and views on your ad. The number of times your ad is displayed to searchers. One impression = Your ad appeared on the Google Network. There is no real mathematics to think of for this metric making it a nice place to look at first when reviewing your campaign daily. If impressions are not happening conversions definitely aren’t happening either. Here you want the biggest and baddest (the good kind of bad) numbers you can get. With lots of impressions means there is potential for lots of activity.
Keep your budget in mind here, if your budget caps out early so do your impressions and action. So make sure to have enough budget to get the results you want.
If we’re not using data, we’re in essence ignoring our customers.
-Ray Velez @rvelez. Razorfish
Know Your AdWords Metrics and You’ll Know Your AdWords Campaign
Filtering through this article alone you can see there are A LOT of AdWords metrics to monitor the performance of your campaign. However, all are worth looking at and glancing over daily for the best upkeep of your campaign. It will seem overwhelming at first. You will eventually get used to all the abbreviations and numbers. To skip the potentially overwhelming metrics, daily checks, adjustments and MOAR you could sign up with Teacup. So you know the performance of your campaign without having to do much performing yourself.