Key Performance Indicators For Google Ads Campaigns

Do you know which Key Performance Indicators (KPIs) to track for your Google Ads campaigns?

Running your own Google AdWords campaigns isn't always a straight forward process. With several ad formats, a wide range of features, and more data than you know what to do with, it doesn't take long to find yourself overwhelmed.

Like with any other type of PPC campaign, understanding which key performance indicators to track is an important first step when creating Google AdWords campaigns. Without choosing your KPIs it will become difficult to understand if your campaigns are achieving your marketing goals.

Don't allow your campaigns to waste any amount of your advertising budget. Decide what goals you have for your Google Ad campaigns, figure out which key indicators align with those goals, and monitor them from the very beginning.

Knowing which KPIs to use for each campaign will not only help you improve and optimize your campaigns over time, but they will also help you explain the campaign results to your clients or boss.

1. Clicks

Don't be fooled by a large impression number when it comes to Google AdWords. In fact, as long as you are getting impressions, you can go ahead an ignore the overall number of impressions your campaigns receive. What really matters is how many people click on your ads.

Without a click there cannot be a conversion. So before you worry about any other performance indicators the first KPI you should be concerned with is the number of clicks. Each click you receive is a potential customer visiting your website. But the overall number of clicks is only a pice of the AdWords puzzle.

2. Click-Through-Rate (CTR)

While the total number of clicks is important and the number of impressions is not, the relationship between the two indicators determines how successful your ads are at generating leads. So, your campaigns CTR is an important KPI to track the efficiency of your ads.

To get the CTR for a campaign the total number of clicks is divided by the total number of impressions. As an example, if your search campaign received 100 clicks on 1,000 impressions, then the CTR for the campaign was 10%.

Keep in mind that there is no standard Click-Through-Rate to aim for. The average CTR varies industry to industry and depends on your ad's copy, position, and relevance. Instead, focus on improving your CTR over time by testing different copy and ad features.

3. Cost-Per-Click (CPC)

One of the best benefits of advertising with Google Ads is that you don't pay every time your ad is shown. Instead, you only pay when someone clicks on your ad. So an important KPI to pay attention to is your average Cost-Per-Click

The average CPC depends on how much search demand there is and the number of competitors you are bidding against. One of my e-commerce clients in a less competitive niche had an avg. CPC of $0.13, whereas one of my home service clients had a $1.64 avg. CPC for their top performing keyword (other highly competitive industries, such as lawyers, can expect an avg. CPC of $100+).

The lower your CPC, the more leads you can generate within your budget. When setting up your campaign you choose your maximum CPC bid, which Google cannot exceed. So if you don't want to pay more than $0.50 per click and your campaign generates 100 clicks then the most you can be charged is $50.00. 

While you choose a maximum CPC, you will often find you are paying less for your avg. CPC than your max CPC bid. To learn more about the CPC bidding process and why you may pay less than your max CPC bid checkout this article written by Google.

4. Quality Score

Do you want to lower your avg. CPC and increase the number of clicks you receive? Of course you do! Then one of the most important KPIs to pay attention to is the Quality Score of your Google Ads.

Simply put, Quality Score measures the relevance of your ad copy and the website landing page compared to what the user is searching for. Using a range of KPIs (CTR, Landing Page Quality, etc.), Google scores your ad on a scale of 1 to 10. Ideally you want your ads to have a quality score between 7 and 10.

The higher your quality score, the less you will have to pay for each click. And as a result, the less you will have to pay for your ad to show higher in search results. Be sure to read what Google Support has to say about the factors Google uses to determine the Quality Score of your ads.

5. Average Position

Google doesn't show search ads every time a someone uses the search engine. However, when they do include ads in search results they appear at the top and bottom of each page.

It's important to note that Average Position is your ads position in relation to the other ads Google is showing and does not take the organic results into account. So an ad shown as the first result is in Position 1, however it would also be in position 1 if it was the 7th result behind 6 organic results.

Keep in mind that being in position 1 doesn't guarantee the best results. You may find that your campaigns are more profitable in position 2 or position 3. Read this article if you would like to see an example of how Google determines the Average Position of search ads.

6. Conversion Rate (CVR)

Previously we discussed how Click-Through-Rate measures the efficiency of your ad, as its the percentage clicks compared to impressions. Similarly, Conversion Rate is an important KPI that measures how efficiently you targeted an audience to generate conversions.

To get the CVR all you need to do is divide the number of conversion by the number of clicks in that campaign. For example, if your campaign generated 15 conversions on 60 clicks, then the CVR is 25%. Here is what Google recommends you do to improve your Conversion Rate.

7. Impression Share (IS)

While Impressions alone are not an important KPI, the Impression Share is an important performance indicator that lets you know if you are missing potential customers due to your Budget or Ad Rank.

Google calculates your Impression Share by dividing the number of impressions you received by the total amount of impressions your ad was eligible for. For example, say you wanted your search ad to show when anyone in New York City searched "Columbian Coffee Beans." If 100,000 people in New York City searched "Columbian Coffee Beans," but your ad only received 75,000 impressions, then your Impressions Share would be 75%.

Read this to see Google has to say about Impression Share.

Focus On Your Marketing Goals

In this article I have discussed just a few of the many Key Performance Indicators to pay special attention to when running Google Ads campaigns. However, they are far from the only ones to keep an eye on. You may find other KPIs that are more important to you depending on the type of campaign you are running and the marketing goals you have set for your company.

Don't spend too much time comparing your results to the results of other brands or marketers. Instead, focus on making incremental improvements across all of the KPIs you are monitoring.

Brad Imming