Successful businesses all have one thing in common: Their decisions are guided by data.
KPIs are a marketing abbreviation for “key performance indicators.” This is a fancy way of saying metrics or the numbers you hope to see from each marketing campaign. Before launching your campaign, define your KPIs and track them throughout to ensure you’re on the right track.
If you are investing in Google Ads, it’s very important to know what KPIs to look at, define what a “good” metric is, and when to optimize your campaigns based on your KPIs. But if you’ve so much as glanced at your Google Ads dashboard, you know that’s easier said than done. Google Ads gives you a mountain of data to sift through; how can you tell which KPIs are actually important?
After years of running Google Ads for entrepreneurs through Fortune 500 businesses, we can help you navigate the process! Here are the Google Search Ads KPIs we care most about and how to determine if your campaigns are performing well:
Google Ads Reporting: Impressions
Every time Google serves your ad to someone, that counts as an impression. Impressions are more of a vanity metric when looked at by itself but it is used when calculating more important things like CTR. This will most likely be a large number but before you freak out, remember that not everyone is ready to buy and it usually takes lots of impressions for a user to take action on your ad.
Google Ads Reporting: Clicks
When someone sees your ad and clicks on it, Google Ads counts that as a click. This isn’t the same as a landing page visit, though, because some users will bounce from your site before it loads.
Even then, clicks are a helpful metric because they show how interesting your ads are to users. If you have a lot of impressions and no clicks, for example, that means you need to rework your Google Ads copy so they encourage people to click.
Clickthrough Rate (CTR)
Clicks are great to keep track of but it’s almost MORE important to track CTR. Clickthrough rate measures how often people click your ad after it's shown to them, which can help you understand the effectiveness of your ad.
CTR = Clicks ➗ impressions
Campaign: “Gucci_Search_Handbags_West Coast”
Campaign: “Gucci_Search_Belts_West Coast”
Which is a better performing campaign if clicks are important to you? While there are fewer clicks on the belt campaign, the ad and/or products are resonating better with the audience. Perhaps look into shifting some of the budget to the belt campaign or tweak the handbags campaign to improve it.
You’ll also want to look at your click share: The number of clicks you get divided by the max clicks you could have received. This metric helps you understand how big of a piece of the pie you’re actually getting. How often your ad is clicked depends on your ads' targeting settings, budget, approval statuses, bids, and the quality of your product data. So if your campaign has a click share of <10%, for example, your competitors are being shown significantly more than you. An easy fix is to (assuming all your other ad metrics are strong) consider increasing your budget if you have it and want to be shown at the top.
Mobile-friendly Click Rate
This is the percent of mobile clicks you get that take users to a mobile-friendly page. A page's mobile friendliness is determined by Google's Mobile-Friendly test which you can test before launching your ads, but keep in mind this data may be up to 14 days old.
Since mobile ad spend is nearly $60 billion annually, it’s clear that your landing pages have to be mobile friendly. This metric ensures you’re giving mobile users exactly what they need.
Google Ads Reporting: Conversions
This is a big one. When you open a Google Ads account, you’ll define what is the most important action(s) to you and then add the conversion tag code to your website or to fire via Google Tag Manager.
Some of the more popular conversion types are making a purchase, signing up for your email newsletter, getting a quote, call in, contact us form fill, or even a button click. Conversions in Google Ads shows the total number of conversions you received after someone interacted with your ad (like clicks or video ad views). If you have multiple conversion types, this column will include the total but you can drill down to see by type if you’d like more details.
Conversion rate shows how often, on average, an ad interaction (again, clicks or video ad views) leads to a conversion. If you are running a campaign to maximize conversions, you’ll want to keep an eye on this KPI as it can show how compelling your landing page or offer is.
Conversion Rate = Conversions ➗ ad interactions
Google Ads Reporting: Costs
The cost represents the total amount you spent during that period. Make sure to change the date toggle when looking for a specific period of time!
If you’re trying to get the most out of your Google Ads budget, your average cost-per-click should be a metric you watch closely.
CPC = Total amount paid for ads ➗ total clicks
For example, if 2 people click on your ad and you pay $1.20 and $1.40 respectively, you’ll have a $1.30 average CPC. Remember that Google Ads is a marketplace, so the amount you pay per click fluctuates. That means your CPC will fluctuate depending on a lot of factors. Watch this metric closely to ensure your Google Ads budget doesn’t spin out of control.
Cost per conversion is what you pay on average for each conversion. We care about this metric because say you sell chocolate and each bag is $8. If the average purchase is for 1.2 bags but the cost per conversion in Google Ads is $45, you might want to evaluate your strategy.
Cost per conversion = Total cost ➗ Conversions
Google Ads Reporting: User Experience
Quality Score (QS)
Your keyword quality score is an estimate of how relevant your ads, keywords, and landing pages are to a person who sees your ad. Higher quality scores typically lead to lower ad costs and better positioning for your ads. Just like how it’s important to target the correct niche audience, it’s important to give them the best experience after they click. We like to see keyword quality scores of 4 or above.
The bottom line
Ads increase brand awareness by 80%. Google Ads are definitely worth the investment, but you need a strong marketing strategy and then a firm understanding of the KPIs before jumping into Google Ads reporting. The KPIs we listed will help you cut through the data to get a balanced look at how successful your campaigns are.
We were recently featured by DesignRush on their list of top digital advertising agencies. Check it out!
If Google Ads still feel intimidating, hit us up for a free quote on paid search management. Thrive Marketing Consultants puts years of PPC expertise to work for our clients. Trust our team to design Google ads that move the needle.