Don’t miss the forest for the trees! When you run PPC or, more specifically, Google Ads campaigns, you need to define your North Star KPIs before you get lost in all the different numbers in your dashboard.
So, in this article, I’ll walk you through the top 10 PPC (pay-per-click) KPIs. I’ll also show you how to interpret them and apply the insights to campaign optimisation.
PPC KPI #1. Click-Through Rate (CTR)
Click-through rate (CTR) measures the percentage of people who click on your ad after seeing it.
I always recommend understanding your industry’s average CTR (and your competitors’ CTRs, if possible) and then aiming to outdo them. The more clicks you get, the higher your Quality Score, which leads to lower costs and better ad positions.
How to Improve Your CTR
- Create dedicated ads and landing pages for different keywords. For example, if you’re a dentist offering cosmetic dentistry and emergency services, create two dedicated ads for each service.
- Use relevant keywords in your ad copy and landing page to reaffirm the searcher’s intent.
- Consider using ad extensions like site link, phone call and location extensions.
- Make sure your ad explains how you’re better than the competitors. For example, you may have more experience, premium brand products, or more affordable pricing.
PPC and Google Ads KPI #2. Conversion Rate
Like it says on the tin, your conversion rate measures the percentage of people who take a desired action, such as making a purchase, scheduling an appointment, or filling out a form after clicking on your ad.
How to Optimise Your Google Ads Conversion Rate
- Firstly, audit your impressions and CTR. Are you getting enough views and clicks to generate a conversion in the first place?
- Secondly, are you targeting the right keywords? Always focus on the long-tail, bottom-of-the-funnel keywords that are typically specific (e.g., “Cosmetic dentistry for nervous patients”) as opposed to generic keywords (e.g., “Cosmetic dentistry”). The more information you get in the target keyword, the easier it will be to tailor the ad.
- Check your landing page. Does it reaffirm what you promise in the ad? Is it easy for the audience to take action? Remove any friction points like lengthy lead gen forms and highlight the CTA.
PPC KPI #3. Cost Per Acquisition
Cost Per Acquisition (CPA) is an excellent metric for understanding the profitability of your campaigns. Look at it in comparison to your customers’ lifetime value.
For example, if a customer spends $500 with you on average, paying $10 to acquire them isn’t a lot. But if they spend $20, it might be worth looking into more profitable audience segments.
How to Improve Your CPA in Google Ads
- Optimise your ad targeting. Dive deep into understanding who your audience is so you can identify the most profitable segments and explore their keyword journeys. This is the method I use with my Google Ads coaching clients, and it works exceedingly well!
- Add keywords that don’t generate conversions to your negative keywords list. Avoid keywords that are too broad, generic, or plain wrong. For example, if you’re a therapist advertising on Google Ads, you wouldn’t want to target “Free therapy.”
- Find customers who are ready to buy. Get rid of informational keywords in your campaign and focus on keywords demonstrating purchase intent. For example, if you were advertising your law firm on Google Ads, you’d target keywords such as: “Contested divorce attorney near me” and not “What is a contested divorce?”
- Consider setting Target CPA as your bidding method.
PPC KPI #4. Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) measures the revenue generated for every dollar or penny spent on your PPC campaigns.
A high ROAS indicates that your campaigns are driving profitable results. However, there’s always room for optimisation – even if you’re in the green.
How to Optimise Your ROAS in Google Ads and PPC Ads
- Identify where the inefficiencies are happening. Are people not clicking on your ads? Improve your CTR. Are people not converting on your landing page? Optimise it!
- Test different bidding strategies. Enable conversion tracking and consider bidding strategies like Maximise conversions or Target CPA bidding.
Google Ads KPI #5. Quality Score
A high Quality Score means lower Cost Per Click, better ad positions, and overall improved campaign performance.
I’ve written a whole guide on improving your Quality Score. Take a look!
PPC KPI #6. Average Position
The Average Position PPC KPI shows how your ads rank compared to other advertisers bidding on the same keywords. A higher average position means that more searchers can see your ads. And considering the shortening attention spans, you want to be as close to the top as possible!
How to Optimise Your Average Position in Google Ads
- Check your Quality Score and optimise it. You want your ad to be as relevant as possible, which may mean creating single keyword ad groups.
- Adjust your bidding strategy. Identify the most profitable keywords and adjust your bids for them while decreasing the bids for ineffective keywords (or eliminating them).
- Try new keywords. You might find the ones your competitors aren’t seeing!
KPI #7. Cost Per Click (CPC)
Cost Per Click (CPC) is a key PPC KPI because it measures the average price you pay for each click on your ads. Now, your base CPC depends on your industry standards. For example, real estate and legal services have a notoriously high CPC.
But that doesn’t mean you can’t lower it!
How to Lower Your CPC
- Make your Quality Score as high as possible by creating relevant ads and landing pages.
- Optimise your keyword strategy. Some keywords are costly while delivering low ROI. Identify the ones that aren’t sending you your best clients and eliminate them.
- Try bidding for times and slots when your competitors’ ads aren’t active. For example, they may only advertise from 8 am to 4 pm, but if you have a lead gen form instead of a receptionist by the phone, you might be able to advertise after 4 pm.
Google Ads KPI #8. Impressions
Since impressions measure the number of times your ads are shown to users, this PPC KPI indicates your campaign reach and visibility. While impressions alone do not guarantee clicks or conversions, they do increase their likelihood.
How to Get More Impressions for Your Google Ads
- Analyse your impression share. Are your competitors getting more impressions for the same keywords? Identify the core cause: Quality Score, more relevant ads, higher bids?
- Refine your ad targeting. Don’t try to target everyone and then risk excluding them because of a vague ad. Know who you’re talking to (one audience segment at a time).
- Analyse your budget. If you have some highly profitable keywords, it’s worth allocating more funds to them while getting rid of keywords that don’t generate conversions.
KPI #9. Ad Spend
The ad spend PPC KPI measures the total amount of money you invest in your PPC campaigns, including click costs, management fees, and additional expenses.
How to Optimise Your Ad Spend PPC KPI
- Regularly review your budget and campaign performance.
- Adjust your bidding strategy to focus on keywords and campaigns delivering the highest-value leads.
- Keep track of leads even after they convert to identify segments that grow with your company instead of being one-off purchasers.
PPC KPI #10. Return on Investment (ROI)
Finally, ROI helps you understand if you’re making money with your Google Ads (or pay-per-click) campaigns. This is a profoundly personal metric; some think 70% ROI is great, while others aim for 200 or 300% ROI.
In these cases, I recommend working with a PPC specialist who can help you understand the industry benchmarks and your unique advantages.
How to Improve Your Advertising ROI
- Do you have all the data you need? This means having information on your average Cost Per Acquisition, campaign performance, and benchmarks.
- Are you using suitable campaigns? For example, you may be investing in Discovery advertising while what you really need is Performance Max.
- Do your campaigns look promising and close to generating ROI? Look into potential bottlenecks and create a plan.
Say Goodbye to Guesswork
… and welcome data-driven decisions! Once you understand your PPC KPIs, it’ll be much easier to identify inefficiencies and double down on what works. While the numbers can sometimes look tricky, it’s worth acquainting yourself with them so you have total control over your campaigns and choose the right direction to steer them in.
If you need personalised assistance, schedule a consultation with me. Or, if you’d prefer to DIY it, get your copy of my best-selling Google Ads book to launch and monitor a profitable campaign in 7 rapid steps!