David Pagotto is the Founder and Managing Director of SIXGUN, a digital marketing agency based in Melbourne. He has been involved in digital marketing for over 10 years, helping organizations get more customers, more reach, and more impact.
When you run a digital campaign, it’s only right that you want to know how well it performed, and Google Ads are no exception. Whether you're looking to increase website traffic, generate leads, or make sales, tracking specific KPIs will help you ensure that you're getting value for your advertising investment. You can easily track your ads using Google Analytics or directly from the Google Ads dashboard.
That said, there are many metrics to analyze—and it can be overwhelming to choose the right metrics that most closely align with your campaign objectives. So we’ve made it easier by highlighting six major key performance indicators (KPIs) and sharing why they are critical to running successful ad campaigns.
Click-through rate is an important Google Ads metric that helps you measure the effectiveness of your ad campaign. CTR is the percentage of people that click on your Google ad. It is ascertained from the ratio of clicks to impressions and indicates how often people click on your ad after seeing it.
For instance, if you ran a Google Ad campaign and received 1,000 impressions (i.e. your ad was shown 1,000 times). Suppose that your ad received 30 clicks, your CTR will be: 30 clicks divided by 1,000 impressions and multiplied by 100.
This means that, for every 100 impressions, 3 people clicked on the ad. The same calculation applies to the image below:
Tracking your CTR means that you can determine whether your ads resonate with your target audience. It also reveals if your targeting strategies are effective. For example, if you notice that your CTR is low, you may need to adjust your ad content, target a different audience, or adjust your bid strategy on keywords.
But how do you know if your CTR is good? Typically, this will depend on which industry you operate in. According to WordStream, most industries have an average of 6-7%. While it’s okay to aim for industry standards, a more effective use of the CTR metric will be to monitor how each of your campaigns or ad groups is performing and optimize them for better results. It’s also helpful if you want to identify trends in your campaign performance over time.
The cost per click measures how much you pay each time someone clicks on your ad. This is a critical KPI to track because it tells you if you're getting value for your advertising costs.
A high CPC suggests your ad may not be relevant to your target audience, or that the competition for the keywords you're bidding on is high. To lower your conversion costs, consider adjusting your bids and targeting settings. If you’re running ads for B2B, B2C, or recruitment marketing purposes, here are some targeting settings you can tweak for better CPC on your Ads:
Keywords - use low-competing keywords that are relevant to your search intent so that you’ll only get clicks from prospects that are more likely to convert. You can also adjust your bids on keywords that are less likely to bring conversions. It’s advisable to compare various search terms to find the keywords that fit well into your ad.
Demographics - based on your target audience, you should only direct your ads to those who your campaign caters to.
Location - target specific areas instead of going too broad with your audience.
Timing - schedule your ad to go live at a time when your target audience is more likely to engage with it.
Ad placement - choose the right ad placement (e.g. search network, display network) to reach your target audience. Adjust bids based on the competition and cost of advertising in those placements.
Monitoring your CPC helps you determine whether your campaigns are cost-effective and determine the best ways to optimize your ad spend and set better budgets. With the CPC metric, you can easily make informed decisions about how to allocate your advertising budget. Overall, tracking your Cost Per Click is an essential part of managing your Google Ads campaigns and ensuring that you get the best advertising ROI.
Conversion rate measures the percentage of visitors to your website who complete a desired action, such as making an online purchase or filling out a contact form. The higher your conversion rate, the more effective your ad campaign is at driving valuable actions.
If your conversion rate is low, it may indicate one or more of the following:
To get more conversion actions, consider optimizing your landing pages, call-to-actions, and the overall user experience on your site. You also want to ensure that what’s on your landing page aligns with what your ad promises. Otherwise, you’ll have a high bounce rate and lose potential conversions.
Optimizing your ad and landing page relevance will also improve your ad’s quality score—which is also important to its general performance. If you need help creating engaging landing pages, you can use an AI content generator to get some ideas. Overall, conversion tracking helps you optimize your campaigns to achieve your marketing goals.
Cost per acquisition measures how much you pay for each acquisition (or conversion) generated by your ad. This KPI helps you determine the profitability of your campaigns and evaluate their return on investment (ROI). CPA is calculated by dividing the total cost of your advertising by the number of conversions you have received (total ad cost / total number of conversions).
CPA is an important metric that allows you to evaluate the level of customer acquisition generated by your campaigns. If your CPA is high, it may indicate that your ads are not driving conversions efficiently. On the other hand, if your CPA is low, it may indicate that your campaigns are getting conversions at a lower cost, making them more efficient and cost-effective.
You can fix a high CPA by adjusting your bids and targeting, or tweaking your ad copy and landing pages so your ad is relevant to your potential customers.
By tracking your CPA, you can run a comparison between ads and determine which ones drive the most conversions for the least cost. Depending on your campaign goals, you can then use this information to maximize the efficiency and profitability of future ads.
Another KPI on our list of Google Ads metrics to check is the return on ad spend. Your ROAS tells you how much revenue you generate for every dollar you spend on advertising. This metric helps you understand the return you're getting on your advertising investment and determine the profitability of your campaigns.
To determine your ROAS, you'll need to track your ad spend and revenue. To calculate your ROAS, divide your total revenue by your total ad spend. For example, if you spent $1,000 on advertising and generated $10,000 in revenue, your ROAS would be 10 ($10,000 ÷ $1,000).
A high ROAS indicates that you're getting a good return on your investment. It's vital to track your ROAS because it helps you understand the impact of your ads on your bottom line. If your ROAS is low, it could mean that your campaigns are not generating sufficient revenue to cover your ad spend, or that you need to adjust your campaigns to improve their profitability.
“Impressions” is one of the Google ads metrics that help you understand the visibility of your advertising campaigns. This KPI measures the number of times your ad is shown to users. While high impressions are generally desirable, they don't necessarily indicate a successful campaign. It's important to consider impressions in conjunction with other KPIs, such as CTR, conversion rate, and ROAS, to get a complete picture of your campaign's performance.
Impressions are quite useful in evaluating the effectiveness of your targeting strategies and determining if your ads are being shown to the right audience.
By tracking impressions, you can make informed decisions about your advertising strategy and determine which campaigns are delivering the best results in terms of reach and exposure. Your overall ad quality, audience targeting, bidding strategy, and ad placement are major determinants of how many impressions your ad will get.
For instance, avoid the mistake of bidding too low on your keywords or you’ll lose the opportunity to show your ad to more people. Also, if you set a low budget, there’s a good chance that only a few people will see your ad while it’s running. So, let your bids and ad budget be sufficient enough to get you tangible views.
Tracking key performance indicators (KPIs) is essential to the success of your Google Ads campaigns. These KPIs provide valuable benchmarks in relation to the performance of your campaigns and can be used to optimize future advertising and marketing efforts.
In this article, we highlighted 6 Google Ads metrics and KPIs that help you assess positive or negative campaign performance. They include: Click-through rate, cost per click, conversion rates, cost per acquisition, return on ad spend, and impressions. With these key metrics, you can unlock the full potential of your Google Ads and drive success for your business goals.
David Pagotto is a guest contributor to Marin Software.