Search metrics address the measurement of your pay-per-click (PPC) search advertising campaign. In a PPC campaign, you spend cash for each click, so you need to know the cost per visitor, and whether you’re netting a profit on sales to these visitors. You typically rely on the analytic reports provided by your search engine advertising platform, such as Google’s AdWords, to measure the cost-effectiveness of your paid search campaign. Here are the top five paid search metrics you can use to track your PPC campaigns:
Click-Through Rate (CTR)
This is the percentage of ad viewers (impressions) who decided to click on the paid ad link. Because CTRs tend to be specific for industry and keyword, the most important characteristic of the metric is its long-term trend. You want to make sure your CTR doesn’t decrease over time, and you can take steps to prevent this. For problematic keywords, experiment with different ad headlines, ad copy, and landing page URLs to see which, if any, of these factors affects your ad’s effectiveness.
This is the average price you pay for each click on a specific paid search ad. This number doesn’t exist in a vacuum – it must be evaluated within the context of your resulting conversion rates and sales. If you feel you are paying too much per click, you can refine your bid strategy, or perhaps concentrate on only some of the ads within your campaign.
Conversion Rate (CR)
The percentage of click-throughs that result in a desired action, such as completing a lead generation form or purchasing a product. Conversion rates reflect the quality of your landing pages. The more relevant the landing page elements (headlines, content, call-to-action), the higher conversion rate you can expect. If your ad is resulting in a low conversion rate, you need to examine your landing page to see what is turning off visitors. Make sure you are offering something of value, so that a visitor feels it was worthwhile clicking through to your website.
The cost per conversion, equal to your total ad expenditures divided by your PPC conversion rate. You can also calculate it on a campaign or ad level. Use the CPA as a target bid for your click-through ads. You can do this automatically on AdWords. You can also use past CPAs to estimate your bids for new keywords.
Return on Ad Spend(ROAS)
Calculated as your total ad spend divided by the total revenues resulting from the associated conversions. If it turns out you are spending more on PPC than you are generating in revenue, you have a big problem. You’ll have to lower your bids, revamp your campaign, or find a new career. That’s why it is important to maintain a vigilant focus on the ROAS metric.