How To Measure PPC Ad Performance In Just 4 Steps

Parmvir Singh
Parmvir Singh
16 Jun, 2020

Without doubt the last few months have been tough for marketers. As soon as Coronavirus reared its ugly head, it was natural for businesses to cut advertising budgets. But for those organisations that have maintained active pay-per-click (PPC) campaigns throughout this period, it’s become more important than ever to understand which KPIs and metrics accurately analyse the success of your ads.

Major advertising platforms such as Google and Facebook provide a wealth of data, which can be a gift and a curse, as sometimes it feels like it’s easier to find a needle in a haystack than extract any meaningful insight from your PPC data.

The key is to identify what success looks like for your campaign. Is it an increase in website traffic? Is it an upturn in purchases? Or is it more enquiry form completions? Once you know the overall campaign objective, you can focus solely on the metrics that measure the success of your ads.

The importance of performance metrics will differ for each campaign, however, for the purpose of this blog, I’ll share four of the most common KPIs that will help you form initial conclusions and outline the next steps of your campaign.

#1 - Impressions

Impressions refer to the number of times your ad was displayed on the selected platform. Each time your ad was shown is counted as one impression. Although it’s a broad metric, that often doesn’t require further exploration, impressions are a great preliminary check to assess if your campaign has been set up correctly.

The popular phrase “you’ve got to be in it to win it” epitomises the importance of impressions.
If your ad isn’t showing to your target audience, you’re not going to receive any clicks, conversions or meaningful results.

If you’re happy with the number of impressions your ads are receiving you can move onto some of the more results-driven KPIs. However, if you’re left feeling a little underwhelmed, here are a couple of tips to help you improve your ads:

  • Budget - Consider increasing your budget to ensure you’re not limiting the number of times your ad is shown. Most platforms will stop displaying your ads as soon as you reach your daily budget cap, which can cause you to miss out on potential impressions.
  • Targeting - Whether you’re selling a niche product/service, or focusing on a particular demographic or geographic, it’s possible that your targeting might be restricting ad impressions. By increasing the scope of targeting you should see an uplift in the number of impressions.

#2 - Clicks & Click-Through-Rate

It’s worth remembering that every website visit, form completion and conversion starts with a click. With this in mind, tracking the number of clicks your ad receives is an early indicator of the success of your PPC campaign.

Click-through-rate, commonly abbreviated to CTR, measures the number of clicks your ads received vs the total number of impressions in a defined period. For example, let's say in one month your campaign received 1,000 impressions and your ads were clicked 10 times this would give you a CTR rate of 2%.

Collectively, clicks and CTR allow you to analyse how well your ads are resonating with your target audience. As well as gaining a holistic view of campaign performance, you can also track the CTR of specific ads to measure the relevance and effectiveness of your messaging.

Although benchmarks and best practice can vary based on your industry sector or location, a CTR of 2% is considered to be above average. Below are some tactics to help you improve your CTR:

  • Calls-to-action - Revisit your campaign and ensure each ad features a specific call-to-action (CTA). Try to use just one CTA per ad to improve effectiveness.
  • Create urgency - Use special offers or persuasive language in the headline of your ads to create a sense of urgency and incentivise your target audience to click on your ad, rather than your competitor’s.

#3 - Conversions

Conversion tracking is arguably the most important PPC performance metric as it enables you to align ad campaigns with overall business goals. Conversions refer to a specific consumer activity that’s valuable to your business - the most common examples are form completions, online purchases and phone calls.

In addition to identifying which keywords and ads are most effective at driving valuable customer activity, conversion tracking also provides greater visibility into how users interact with your website once they’ve clicked on an ad.

By keeping a close eye on the number of conversions your PPC campaign is delivering, you’ll gain a deeper understanding of the types of content and messaging that resonates with your target audience, which will allow you to optimise future marketing activity for the best possible results.

Before tweaking your ads, I recommend taking a look at Google’s conversion tracking guide. Once you’re happy everything is set up correctly, try the following techniques to increase your conversion rate:

  • Ad groups - Streamline your ad groups to ensure each group focuses on a single product, offer or service. By creating smaller ad groups you can focus on specific keywords and ensure your messaging is relevant to the target audience.
  • Remarketing campaigns - A remarketing campaign will allow you to serve ads to users that engaged with a specific landing page. You can use segmented lists to create and display ads that target a particular conversion action.

#4 - Cost-Per-Acquisition

Cost-per-acquisition, also known as cost-per-action and CPA, is a performance metric that measures the amount you have to spend in order to gain a conversion. CPA is determined by the number of ad clicks it takes before someone converts.

Typically CPA is much higher than cost-per-click, because not everyone who clicks on your ads will complete the desired conversion action (no matter how hard we try!). Reducing CPA can significantly improve your return on investment and help you control the costs of your campaign.

Here are some strategies to help you decrease your CPA:

  • Optimise landing pages- It’s vital that your ads refer to the most relevant landing page on your site. Consider the entire user journey and implement tactics like call-to-action buttons to make it as easy as possible for a visitor to complete the conversion action.
  • Custom ad scheduling - Analyse your historical PPC data to identify CPA performance by time of the day. With this insight you can create a custom ad schedule and improve the effectiveness of your ads.

How we can help

Our marketing team has extensive experience of planning, executing and managing high-performing PPC campaigns. Get in touch to discuss how we can help you improve your ROI from online ads.

How To Measure PPC Ad Performance In Just 4 Steps