PPC Campaign Metrics That Matter (and What To Do If Your Ads Aren’t Working)13 min read

by Jun 10, 2024Marketing, Strategy

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If your pay-per-click ads aren’t bringing in quality results, it can be difficult to pinpoint the problem. Is it the ad copy? The targeted keywords? The bid strategy? Your budget? The landing page? PPC campaign metrics like impressions, clicks, and conversions can help you triangulate the problem. If people aren’t clicking, it could be a problem with the ad copy. If people aren’t contacting you or making a purchase, it could be your website.

Whether you’re running PPC ads in-house or working with an agency like DVS, here are the key campaign metrics you should track month to month and how to improve performance.

Five PPC Campaign Metrics You Should Monitor

1. Impressions or Reach

Impressions measure how often your ad is served on the ad network. Impressions in a Google search campaign are how many times your ad showed up in the search results. Some social media ad platforms also measure “reach,” which is how many individual accounts saw your ad.

Impressions and reach metrics help you understand how often your ad is being seen and are the baseline for measuring click-through rates and conversion rates.

2. Clicks and Click-Through Rate (CTR)

A click is someone clicking on your ad. The click-through rate (CTR) is the percentage of people who clicked on the ad out of everyone who saw it.

To calculate CTR, divide the number of clicks by the impressions and then multiply by 100 to get a percentage. A campaign with 1,500 impressions and 150 clicks has a 10% CTR.

To understand if your CTR is where it should be, we recommend comparing your metrics to industry benchmarks. This gives you a baseline performance to measure against. If you decide to research benchmarks for your industry, just be sure they are from a reliable source.

3. Cost Per Click (CPC)

Cost per click is the dollar amount you pay for each click. To calculate CPC, divide the spend by the number of clicks.

CPC benchmarks are useful, especially since some industries are more competitive than others. The average CPC for Google search ads is between $2 and $4, but it can vary depending on the industry. The ad space for attorneys and legal services is extremely competitive with the average CPC hovering around $9. Arts and entertainment have CPCs under $2. (Benchmark data from LocaliQ.)

The higher your CPC, the more expensive your campaign is to run. This isn’t always a bad thing! The cost per acquisition might be high, but the return on investment should be even higher.

4. Conversions and Conversion Rate (CVR)

A conversion is a specific action you have defined as the campaign’s goal. It could be someone making a purchase, contacting you for a quote, or downloading a resource.

The conversion rate is the percentage of people who completed the desired action out of everyone who clicked. To calculate, divide the number of conversions by the number of clicks and multiply by 100 to get a percentage.

Conversion rate is an important metric because it tells you how effective your ads are at getting people into your sales funnel.

5. Cost Per Conversion (CPCV) or Return on Ad Spend (ROAS)

Cost per conversion and return on ad spend are key metrics for determining if your ads had a positive impact on your business. Cost per conversion is most useful for lead-focused campaigns and ROAS is useful in sales-focused campaigns.

CPCV is the dollar amount you spend every time someone completes the desired action. To calculate, divide the spend by the number of conversions.

For Google search ads, the amount you can expect to spend per conversion is around $60 but varies widely by industry. A law firm could easily spend $145 per conversion, while a pet store might be closer to $35.

Cost per conversion is best evaluated next to the average lifetime value of a new customer. Spending $35 might be well worth it if your new customer will spend $100 on pet food and toys every few months.

ROAS measures the revenue you earn for each dollar you spend on advertising. To calculate, divide the sales you made by ad spend and multiply by 100 to get a percentage. A ROAS of 100% means you broke even and made back 100% of the dollars you spent to run the ad.

A good ROAS for ecommerce is anywhere from 400% to 600%, but it depends on your industry and business goals.

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Troubleshooting PPC Campaign Metrics

It’s one thing to know your CTR is low or your CPCV is high, but what do you actually do about it? Here’s where we would start.

What To Do If People Aren’t Clicking On Your Ads

A low CTR is a cue to examine your campaign targeting, keywords, and ad copy. Examining these factors will tell you if your campaign is reaching the right people and if your offer is convincing them to click.

  • Check targeting parameters. Are you serving ads to an audience that’s too narrow? Are there other limiting factors like geography or age range preventing your ads from succeeding?
  • Take a closer look at your keywords. Are they keywords people use when looking for your products or services? Do your ads match the search intent of the keywords?
  • Examine your ad copy. Is it relevant or compelling for your target audience? Does it use jargon or lingo they wouldn’t understand?

What To Do If People Click, but Don’t Convert

A good CTR, but below benchmark conversions means your problem area is likely your landing page.

  • Does the landing page load quickly?
  • Is it easy to read on mobile devices?
  • Does it communicate your offer in a compelling way?
  • Is it well-designed with the conversion action near the top?

What To Do If People Convert, but Aren’t the Right Customers

What if you’re getting leads, but they aren’t the type of customers you’re looking for? This could indicate a problem with your overall campaign strategy.

  • Does your target audience use your ad platform?
  • Are you using the right keywords? B2B search ads can easily slip into a consumer space since the Google ad platform is very product-focused. Highly specific keywords can help your ad show up for just the right people.
  • Does the ad speak to their pain points and offer a compelling solution?
  • Does the landing page clearly spell out your offer and the value you provide?

Work With DVS To Get Your PPC Campaign Metrics Back On Track

Running a pay-per-click ad campaign is full of technicalities, nuance, and acronyms. If you’re frustrated trying to understand CTR, CPC, or CPCV, DVS can help. Our team uses data to understand a campaign’s performance and optimize based on your goals. We are happy to walk you through our methods and how we manage campaigns to get the results you’re looking for. We’ve helped clients all over West Michigan (and beyond) get the digital marketing results they need to grow their businesses and reach their goals. Let us know if you have questions or want to know more about our approach to PPC advertising.