Understanding the main success metrics of a campaign from the start is critical for those employed in PPC. Mostly during the campaign planning process, the target of and PPC campaign should be aligned to various KPIs.
Knowing what one wants to achieve in the campaign and how one will calculate it allows to set up Google Analytics and Google Ads ahead of time, ensuring the evaluating success correctly from the start and ensuring the accuracy of campaign results.
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Since PPC marketers usually have a set budget, they know how much they can spend on an ad campaign. However, just because they define a budget and an offer when setting up a PPC campaign does not really mean they’ll pay that amount.
Advertising agencies use their offer to outbid rivals for ad positions, but they pay the next highest bid price. This definition is illustrated in the picture below:
As a result, the cost of placing an ad and the clicks it receives is essentially decided by other PPC auction participants.
The cost per click (CPC) is a metric that determines how much an advertising company has paid. CPC is calculated by dividing a campaign’s overall expense by the number of times an ad was clicked during that project.
One can manually calculate the expense of the campaign by multiplying the CPC by the number of clicks it got.
Customer Lifetime Value (CLV)
It is the average benefit or spends that is projected over the course of a customer’s entire relationship.
This is used in PPC to assess and evaluate the CLV of a PPC acquired customer to the CLV of customers acquired by other networks.
This will assist in determining the selection of consumers that come in as a result of PPC campaigns.
The metric assesses and evaluates a company’s consumers’ experience with its products and/or services over time. To measure LTV, Google uses a variety of tools. In certain cases, the value can be measured simply by looking at the number of days, months, or years a client has been with the platform, while in the case of large corporations, there are several factors to consider when calculating this measure. The customers lifetime, customer retention rate, profit margin per customer, and applied discounts are all factors to consider.
The quality score metric measures the ad content’s quality and relevance. Past results, CTR history, user interface experience, keyword relevance, and ad content relevancy are all factors that influence the quality score.
The location of the ad on search engine result pages is largely determined by its quality score If one has a high-quality score, it means the PPC ad is meeting the needs of potential customers. If the ads and landing pages are meeting the needs of consumers, the CPC for the keywords would decrease.
A good quality score is normally between 7 and 10, and it also means you’ll spend less money on the campaign’s advertising. A low ranking, normally less than a 6, indicates that an individual will have to pay more to reach the desired spot.
Click share, like conditions for realizing, provides them with clear strategic insight into the campaigns. For example, if people receive 60% of the clicks for a keyword, it’s likely that they could have received 40% more hits or that the opponent received the remaining 40%.
The average number of shares got during a campaign is called click share. This measure indicates whether or not the campaign has the ability to generate more clicks.
This information can be used to boost the number of possible clicks received by the rivals by increasing bids, expenditures, and ad extensions, among other things.
For almost every search question reached, Google balances paid and organic search results.
Ads on Google or Bing can appear in position 1 at the top of the search engine results page (SERP), followed by position 2 and so on.
Advertisers can find out which location their ad appears in almost all of the times by looking at the average place. Since Google can’t always give the highest bidder the top spot, they use ad rank to calculate the average place.
Quality Score is multiplied by an advertiser’s maximum cost per impression to determine ad rank (CPM).
Attainment of the Budget
Paid search marketers are almost always given a monthly budget to work with when it comes to running ad campaigns. Budget attainment refers to how close an organisation or entity comes to meeting its budget goals.
Despite how much detail it offers about how campaigns are run, most PPC marketers don’t include budget attainment when assessing their PPC efficiency.
Since it’s difficult to bid reliably and optimise results with ongoing volatility in the PPC auction – a challenge that necessitates ongoing oversight and optimization – marketers appear to overspend or underspend their budget every month (without the use of machine learning).
The conversion rate is not only a measure of campaign performance, but it’s also why PPC marketers are hired in the first place.
In Online Ads, the conversion rate is calculated by dividing the total of conversions obtained by the total number of clicks. Since conversion is expressed as a percentage, if a campaign receives 100 clicks but only 10 conversions, the expected return is 10%.
Although campaign staff keep conversions in mind at all times, they often set up strategies to maximise clicks rather than conversions.
Rather than relying on clicks or impressions, can now strive for conversions based on CPA targets. However, in order to be considered, one must:
To be considered for conversion optimization, the account must have had at least 15 conversions in the previous 30 days.
Cost Per Conversion/Acquisition (CPA)
When users set up advertising strategies, they can set a cost per acquisition (CPA), which is similar to CPC.
The average CPA, according to Google, is the cost per new customer that advertisers pay, which is determined by dividing the total cost of conversions by the number of conversions. The CPA is calculated by Google based on the Quality Score.
The CPA narrative, however, has a little more to it.
Although the average CPA is simple to understand, marketers may also use Targeted CPA, a bidding strategy used during campaign setup. Advertisers may use targeted CPA to automatically set bids to get as many conversions as possible, based on a set CPA calculated by the advertiser’s budget.
Rate of Click-Through (CTR)
CTR is a key metric for campaign success, similar to calculating how many clicks the campaign received.
The total number of clicks the campaign received in the month (or time being reported) is divided by the total number of impressions. This calculation indicates that the ad was clicked 100 times out of a thousand impressions, and the CTR is 15%, for example.
Knowing what CTR is and how to calculate it is important for being able to assess the success, but bear in mind that there is no ideal CTR campaign manager.
The output of PPC campaigns varies depending on the industry and a variety of other campaign variables.
Benchmarking and enhancing the CTR of various campaigns is significant not only as a metric of performance, and also because it has an impact on other KPIs such as Quality Score.