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What Are Google Ads KPIs & How to Track Them

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Edona Shala

Content Writer

What Are Google Ads KPIs & How to Track Them

One of the main advantages of pay-per-click (PPC) advertising is the ability to track the performance of your ad over time. Analytics tools, such as Google Ads, display a wide range of metrics, many of which are key performance indicators (KPIs) that reveal your ads’ effectiveness. 

 

The best metrics may differ from campaign to campaign, but keep reading to learn what these Google Ads KPIs are, how to track them, and which are some of the most useful for success.

What Are Google Ads KPIs?

A Key Performance Indicator (KPI) is a metric used to evaluate the performance of a company or an individual. There are key performance indicators (KPIs) for all types of businesses and industries, but some of the most common are:

 

  • Productivity
  • Profitability
  • Customer satisfaction
  • Safety
  • Employee retention

 

The best KPIs are specific, measurable, achievable, relevant, and time-bound, allowing you to track progress toward your goals and objectives.

How Do You Choose KPIs for Your Business

The best KPIs for your business will depend on several elements unique to your business and industry, so there is no one-size-fits-all answer to this question. 

 

However, there are some general guidelines that can help you in selecting the most effective KPIs for measuring and tracking progress toward your business objectives. 

 

Begin by identifying your overall business goals, and then generate a few potential KPIs for measuring progress toward each goal. 

 

Examine the data you currently have and whether you can track the KPIs you are considering. 

 

Talk to other businesses in your industry to find out what KPIs they use and whether they find them useful. 

 

Try out a few different KPIs to see which ones are the most effective for your business.

 

This allows you to narrow the list of potential KPIs down to a few that will be most useful for measuring and tracking progress in your business.

Why Is It Important to Analyze Google Ad KPIs?

Google ads KPIs are metrics that allow advertisers to evaluate the efficiency of their ad campaigns. 

 

One of the main reasons for analyzing your Google Ads KPIs is to determine whether your campaigns are generating leads and sales

 

Analyzing your KPIs will help you pinpoint areas of waste so that you can minimize your spending. 

 

Ultimately, by analyzing your Google Ads KPIs, you’ll be able to make better decisions about how to allocate your budget for the best results. 

 

You should identify which keywords and ad groups are performing well so that you can increase your investment in those areas. 

Which Google Ad KPIs Are Most Important to Track

But, which metrics should you track? Don’t worry if you don’t know the answer to that question; we’ve got you covered. Keep reading to find out more! 

Quality score

Quality Score is one of the first PPC KPIs you should start analyzing. It’s a Google Ads metric that measures the general quality of your ad campaigns. 

 

A high-quality score typically indicates a higher possibility of appearing in search results and reaching users.

 

Technically, Quality Score has no direct effect on whether your ads appear in search results; Ad Rank and bid amount, on the other hand, do. 

 

Google, uses the same set of factors to determine your Quality Score and Ad Rank.

 

That means that maintaining your Quality Score is still a good way to improve the positioning of your ad. Moreover, unlike Ad Rank, Google Ads will provide you with suggestions on how to improve your Quality Score.

 

By reoptimizing your ads and increasing your Quality Score, you can improve the chance of your ads appearing higher in search results.

Check your average position

Your ads will show up in search results along with many other ads. When this happens, ranking above those ads has an advantage, just as ranking at the top of organic results has an advantage.

 

The position of your ads in those rankings is referred to as position. You can use average position to see where your ads appear the most often. This will tell you how your ads rank in comparison to the other ads that appear alongside them.

 

If your average position is low, you may benefit from reoptimizing your ads to rank higher. Look at the ads that appear above yours to see what they’re doing differently.

Click-through rate

The click-through rate (CTR) is a Google AdWords KPI that shows the ratio of ad clicks to total Impressions. 

 

Marketers, in general, want to maximize their click-through rates with their AdWords campaigns, as this can, for example, improve ad position and have a positive effect on the quality score, and reduce click costs (CPC). 

 

Besides that, a high CTR initially reflects the user’s basic interest, which can be achieved, among other things, by incorporating call-to-actions and a clear Unique Selling Proposition (USP) in the advertisements.

 

A/B tests with different advertisements can help you improve your CTR. To be able to assign changes in performance without a doubt in your mind, make sure to test the smallest variations in the ads, such as various call-to-actions, against one another.

Conversion rate

When it comes to PPC campaigns, clicks aren’t the only thing that matters. That’s because even if a billion people clicked on your ads, none of them would become customers. That is why you should monitor the conversion rate as well.

 

Conversion rate is the percentage of clicks that result in a conversion. If ten people click on your ad and four of them convert, your conversion rate is 40%.

 

A low conversion rate indicates that people click on your ads but aren’t convinced to purchase by the ad copy. You could try making your landing pages more compelling to increase your conversion rate.

 

Begin by looking at your conversion rate at the campaign level to get an idea of how your campaigns are performing within your AdWords account. Then you can see ad groups or individual keywords with a large enough sample size.

Cost per click

You should keep track of your cost per click (CPC). This metric is exactly what it sounds like: it calculates how much money you spend for each click on your ads.

 

Divide your total costs by the total number of clicks to calculate CPC.

 

This PPC KPI is useful because it allows you to put your spending into perspective. When you look at the total cost alone, it’s difficult to see how much you get for your money.

 

Have a closer look at your keywords with the highest or lowest cost-per-click and the corresponding quality score. 

 

For important keywords with a high cost-per-click and/or low-quality score, check the relevance of the ads and landing pages.

Cost per acquisition

You should also keep track of both CPC and CPA (Cost Per Acquisition). In this context, “acquisition” and “conversion” are synonymous, so you’re essentially measuring your cost per conversion.

 

This metric is useful for the same reason that CPC is useful: it provides a clearer picture of your spending. You may have a high CPC but a low CPA at times.

 

The cost of each conversion varies by industry because paid search engine metrics such as competition, the average cost per click, and the conversion rate on the landing page influence the results.

 

However, you should consider how many relevant leads become customers and how much revenue a typical job generates. You can calculate your CPA using this information.

Return on ad spend

Finally, one of the most important PPC KPIs to monitor is the return on ad spend (ROAS). 

 

ROAS is essentially a profit metric; it measures how much money you make after marketing and acquiring customers.

 

Assume you spend $100 on paid advertising within a certain timeframe. You earn a total of $150 from those paid ads in the same timeframe. 

 

In that case, your ROAS would be $50 because that is how much profit you made in the end.

 

You want your ROAS to be bigger than a 1:1 ratio — a 1:1 ratio means you’re making $1 for every $1 spent. While the average ratio is around 2:1, a 4:1 ratio is ideal for maximizing your return.

Final Thoughts

Key performance indicators (KPIs) tell you when to reduce resources in a specific channel and when to increase them. You can also use KPIs to determine which areas are contributing to sales and which are not.

 

Create goals to adjust your strategy as the dynamics of an online advertising campaign change.

 

Setting key performance indicators (KPIs) for your Google AdWords account that align with the main goals of your business and how it operates is invaluable for performance measurement.

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