Pay-per-click, better known as PPC, is a prime digital marketing channel that most industries can use to leverage growth and sales.
One of the good things about this channel, as opposed to some organic channels like SEO and social media, is that the success of a PPC campaign can be closely monitored.
But you need to know what PPC ad KPIs to look at – and these are some of them.
Impressions (Also Called Impression Share)
Impressions are easy enough – this is the number of views your ads get.
You need impressions to get clicks, that much is certain. But you don’t want a whole bunch of impressions without clicks.
So if you get a lot of impressions, but no clicks, you need to go back to the drawing board and refine your keyword strategy to bid on more lucrative keywords.
Clicks
Clicks refers to how many users are actually clicking on your ads, and like impressions is a fairly easy metric to track.
If you get clicks, it means you’re getting impressions (which means your bid strategy is working) and it also means your ad copy is doing something too.
However, you don’t want to get a lot of clicks without conversions, because in this marketing channel, you pay per click – hence the name.
Click-Through Rate
Click through rate is the percentage of impressions that actually click. The higher the better, as it means that you’re targeting highly relevant keywords that are actually implicated in the purchase cycle.
Ideally, you want a very high click-through rate, but the unfortunate truth is that most ad campaigns have very low CTR. Generally it hovers somewhere around 2%.
Ad Quality Score
Compared to other PPC KPIs, quality score is a little bit abstract. Whereas other metrics are easy to calculate, quality score is a little harder to determine. Google’s formula is not quite straightforward.
However, Google uses a combination of click-through rate, ad relevance, and the quality of your landing pages to assign a quality score to each ad.
It’s measured from 1 to 10, and the higher the better. If your quality score is below, say, 5, you should consider updating your ad copy or your landing page in order to improve performance.
Conversion Rate
Conversion rate is the percentage of those that click on your ads that take the desired action once on the landing page. In eCommerce PPC management, this generally means “what portion of people buy after clicking.”
A healthy conversion rate is the key to an effective, sustainable PPC strategy, because the higher the portion of people that contribute to the bottom line, the more profitable the campaign will be, and the more effectively it will cover its costs.
AOV
AOV stands for average order value, which refers to the average price per transaction. For obvious reasons, the higher the AOV, the better.
However, some industries may require you to get a lot of clicks before you get a single order, but orders could be huge. This will result in a relatively low average order value, which is something to be aware of and not necessarily a red flag.
ROI/ROAS
In the world of eCommerce PPC, return on investment (ROI) is usually referred to as ROAS, or return on ad spend.
This is arguably the most important KPI of all, as it will let you know if your campaign is paying for itself, and how profitable it is.
ROAS is determined by dividing the revenue that arises from PPC divided by total cost spent on the campaign. A ROAS greater than one indicates that the campaign is covering its costs.
A ROAS of 2 means the campaign earns 2 dollars for every dollar spent. The higher the better, of course.
Why Work with an eCommerce PPC Management Company?
The main reason that eCommerce merchants work with agencies for eCommerce PPC management is because their experts know what they are doing and are effective at maximizing ROAS.
If your campaign is struggling, consider making the switch to working with an agency partner yourself.
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