The 5 Most Important PPC KPIs To Track

Hi there again. Welcome to my third edition of the newsletter.

This week we will look at the importance of tracking key performance indicators (KPIs) in pay-per-click (PPC) advertising. I'm going to discuss various metrics that are commonly used to evaluate the performance of PPC campaigns, including click-through rate (CTR), cost-per-click (CPC), conversion rate, return on ad spend (ROAS), and impression share.

You also will know why each of these metrics is important for evaluating the performance of PPC campaigns, and how they can be used to optimize campaigns and improve results.

Let's dive right in!

Click-through rate (CTR) - The CTR is the ratio of the number of clicks on an ad to the number of times the ad was shown, expressed as a percentage. For example, if an ad was shown 100 times and received 10 clicks, the CTR would be 10%. A high CTR is generally considered to be a good indicator that an ad is performing well, as it means that a significant number of people who saw the ad were interested enough to click on it.

Tracking CTR is important because it provides insight into how well an ad is resonating with the target audience. A high CTR indicates that the ad is relevant and interesting to the audience, while a low CTR may indicate that the ad needs to be updated or redesigned to be more appealing.

Cost-per-click (CPC) - CPC is the cost of an ad for each click it receives. For example, if an ad costs $100 and receives 100 clicks, the CPC would be $1. Lower CPCs are generally considered to be more desirable, as it means that the ad is delivering more clicks for the same amount of money.

Tracking CPC is important because it helps to determine the cost-effectiveness of an ad campaign. A low CPC means that the ad is generating a high number of clicks for a relatively low cost, while a high CPC may indicate that the ad is not generating as many clicks as desired, or that the campaign budget needs to be adjusted.

Conversion Rate: The conversion rate is the percentage of clicks that result in a desired action, such as a sale or lead. For example, if an ad receives 100 clicks and results in 10 sales, the conversion rate would be 10%. High conversion rates are generally considered to be good, as it means that a high percentage of people who click on the ad are taking the desired action.

Tracking conversion rate is important because it helps to determine the effectiveness of an ad campaign in achieving its intended goal, such as making a sale or acquiring a lead. A high conversion rate indicates that the ad is effectively driving action, while a low conversion rate may indicate that changes need to be made to the ad or landing page to improve performance.

Return on ad spend (ROAS) - ROAS is the amount of revenue generated from advertising divided by the amount spent on advertising. For example, if an ad campaign generates $1000 in revenue and costs $100, the ROAS would be 10:1. A high ROAS is generally considered to be desirable, as it means that the campaign is generating a good return on the money spent on advertising.

Tracking ROAS is important because it helps to determine the overall profitability of an ad campaign. A high ROAS indicates that the campaign is generating a good return on investment, while a low ROAS may indicate that the campaign is not delivering a good return on the money being spent on advertising.

Impression share - Impression share is the percentage of impressions an ad receives compared to the total number of impressions that were available. For example, if an ad was shown 1000 times and there were a total of 2000 impressions available, the impression share would be 50%. A high impression share is generally considered to be good, as it means that the ad is being shown to a large percentage of the people who are being targeted.

Tracking impression share is important because it helps to determine how visible an ad is to the target audience. A high impression share indicates that the ad is being shown to a large percentage of the target audience, while a low impression share may indicate that the ad is not being shown to as many people as desired, or that changes need to be made to the targeting or targeting settings.

Overall, tracking these key performance indicators allows you to identify areas where your campaigns are performing well, as well as areas that need improvement, so you can make data-driven decisions to optimize your PPC campaigns.

Thank you for reading this week's newsletter. I hope you found the information shared to be valuable. As always, I'm open to your feedback and would love to hear about the metrics you should track.

Stay tuned for next week's content, where I will be covering something trending in the domain now.

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"The most powerful element in advertising is the truth"

-William Bernbach