When optimizing keywords, a Google Ads expert typically looks at several key performance indicators (KPIs) to assess the effectiveness of the keywords and make informed optimization decisions.
Monitoring KPIs serves as the yardstick for evaluating the effectiveness of your marketing efforts, providing a clear and objective measure of success or failure.
KPI’s enable data-driven decision-making by guiding strategies and discontinuing ineffective tactics to ensure campaigns are aligned with business goals whether those objectives involve increasing website traffic, generating leads, driving sales, or enhancing brand visibility.
Failing to monitor the metrics can lead to squandered resources on initiatives that yield poor results causing a loss to potential gains.
Campaign performance can decline!
Let’s look at 5 KPI’s when running Google Ads and what to do if the metric is to high, too low, or anything in between. Use this guide to get a basic understanding of important metrics and how to optimize them for best results.
1. What are Click-Through Rates?
Click-Through Rate (CTR) measures the percentage of users who click on your ads after seeing them. A high CTR indicates that your keywords and ad copy are relevant and compelling to the target audience.
Formula:
CTR = (Number of Clicks / Number of Impressions) x 100
When to use:
CTR is used to evaluate the performance of keywords in pay-per-click (PPC) advertising. A high CTR for specific keywords suggests that they are relevant and engaging for users, while a low CTR indicates the opposite. CTR tells you what percentage of people who saw your ad or content actually clicked on it.
When the metric is too high:
A high CTR with low conversion rates may suggest a disconnect between the ad and the landing page. Consider changing keywords, working on negative keywords to minimize unwanted traffic, or change the landing page to better align with the high performing keyword.
When the metric is too low:
A low CTR could mean a disconnect between ad copy and the keyword being searched. Rewrite the ad copy to align with the context of the keywords such as if the business is selling red apples, make sure the ad copy does not mention anything tech related as it could be misinterpreted from the technology company. Another is the placement of the ad is below competitors. Sure the search ad is in the running but if users click on the ad above yours, it leads to a low CTR. Consider increasing bids to outrank competitors.
2. What are Conversion Rates?
Conversion rate measures the percentage of users who take the desired action, such as making a purchase, filling out a form, or signing up for a newsletter.
Formula:
Conversion Rate=( Number of Visitors / Number of Conversions)×100
When to use:
Use Conversion Rates to determine how effective your keywords are in assessing the effectiveness of a marketing campaign or website in turning visitors into customers or leads.
When the metric is too high:
There are not many downsides to having a high conversion rate. It means the campaign is doing amazing! However, it is a good idea to go into the CRM to check the validity of people converting as it might be bots or fake users draining the ad budget.
When the metric is too low:
Assessing the problem for low conversions is broad as there could be many factors. It could be anything from bad web design, wrong target audience, too many steps to conversion, etc. Try to A/B test variables and find the root of the issue and reiterate the campaign.
3. What is Cost Per Conversion?
Cost Per Conversion also known as Cost Per Acquisition measures how much you pay for each desired action generated through the search campaigns.
Formula:
CPA = Total Campaign Cost / Number of Conversions
When to use:
Conversions can vary depending on your campaign goals and can include actions like website sign-ups, purchases, form submissions, or any other action that represents a valuable interaction with your business. A lower CPA indicates more cost-effective keyword targeting and efficient allocation of ad spend.
When the metric is too high:
There are a few reasons why this KPI goes up either by poor keyword selection, ad copy quality, issues with the landing page, or competitors are increasing their spends. Review the keywords to make sure they align to the landing page. Refresh ad copy to increase the quality of the ads and ensure the landing pages are optimized with a clear Call to Action.
When the metric is too low:
A low Cost Per Conversion may look great but it could also mean low quality leads or missing out on opportunities to convert more users. Look through the most recent conversions and check their quality. If the leads are terrible, consider adjusting targeting or find the keywords that are triggering the ads to low quality traffic. Conversely, if the CPA is too low compared to industry benchmarks, it could also mean the campaign could have generated more leads if there were more budget.
4. What is Ad Quality?
Ad Quality a metric assigned by Google that reflects the relevance and quality of your keywords, ads, and landing pages. It affects your ad rank and cost per click (CPC). A higher Quality Score indicates better keyword performance. Note that Quality Score is not a key performance indicator and should not be optimized as it is more of a diagnostic tool that affects user experience.
When to use:
If you notice that a particular ad group or campaign is underperforming or has a high CPC, examining the Quality Scores can provide insights into the reasons behind these issues.
Formula:
3 Components
Expected Click Through Rate (CTR): The liklihood a user will click your ad when shown to them.
Ad Relevance: How closely your ad matches the intent behind a user's search
Landing Page Experience: How relevant is the landing page.
When the metric is too low:
There are several strategies to increase quality score. Optimizing ad copy to match the language of the user can help increase the score. Reevaluating ad groups to check where keywords can fit under one theme like one group can be for engagement rings versus another for wedding bands..
Once this is done, monitor the CTR which will help improve Ad Quality scores.
Landing page optimization as mentioned in the 3 components is another opportunity to increase ad quality by closely matching the information on the landing page with the same language found in the ad copy.
5. What is Impression Rate
Formally knows as Average Position, this metric shows the average placement of your ads on the search engine results page. Impression (Absolute Top) %" and Impression (Top) % provide advertisers with a clearer understanding of where their ads appear on the SERP. Ads in higher positions typically receive more clicks and attention from users.
Impression (Absolute Top) %: This metric represents the percentage of your ad impressions that appear in the absolute top position, which is the very first ad slot above the organic search results.
Impression (Top) %: This metric shows the percentage of your ad impressions that appear in one of the top ad positions, which includes both the absolute top and other prominent positions at the top of the SERP.
Formula:
Impressions Absolute Top / Impressions
If an ad has 100 impressions and 20 of the impressions appear at the absolute top of the page, then Impr (abs top) % = 20 / 100 = 20%
When the metric is too high:
Maintain Quality: Keep your ad quality high to maintain or improve your position without overspending. Ensure that your keywords, ad copy, and landing pages are relevant and optimized.
Bid Optimization: If you're consistently in top positions and your performance is strong, you can consider optimizing your bids to ensure you're not overspending for your position.
When the metric is too low:
Increase Bids: Consider increasing your bids for keywords that are crucial to your campaign goals. This can help improve your ad's visibility in top positions.
Improve Quality: Focus on improving the quality of your ads, keywords, and landing pages. Higher quality often leads to better positioning.
Keyword Expansion: Expand your keyword list to include more relevant terms, which may help you reach the top positions for a broader range of queries.
Ad Extensions: Utilize ad extensions (such as site link extensions, callout extensions, and structured snippet extensions) to make your ads more appealing and increase their chances of appearing in top positions.
Use these five basic strategies to increase Google Ads performance because by consistently monitoring the data, digital marketers can identify areas of improvement, optimize their campaigns for better performance and cost-efficiency, and ultimately achieve better results from their Google Ads campaigns. In the rapidly evolving digital landscape, competitors who actively monitor and optimize based on KPIs are likely to gain an edge because monitoring is a cornerstone of effective digital strategies.