HOW TO EVALUATE YOUR PPC CAMPAIGN
I've seen a lot of pay-per-click (PPC) campaigns, and there are steps that every digital marketer should do when evaluating performance. Just like any other marketing deliverable, the return of investment (ROI) needs to be top of mind. The following includes five key performance indicators (KPIs) to help you to calculate ROI for your employer.
#1 – CLICKS
It is not wise to measure impressions and clicks alone. While it's important, it doesn't tell the entire story. Clicks and even impressions show you how much search demand there is for that search term. Metrics around conversion data show you how effective your ads and landing pages are for generating sales or leads. That's why you should be bidding on those keywords getting the most clicks. You need to get the clicks before you get the conversions.
#2 – CLICK-THROUGH RATE
Many marketers will look at the click-through rate (CTR) when determining the success of a campaign. However, the number of conversions need to be evaluated, as well. For example, you may get a lot of users clicking on your ad, but that user may not convert after landing on your website. I would look at this metric as a traffic-focused metric. It's great to get the traffic, but it means nothing without that lead or sale.
Improving the CTR is important not just to measure performance of an ad, but it also helps with your quality score. The metric tells Google if your ad is relevant. This isn't a straight forward metric because there is some theory. I believe that if your landing page isn't optimized to what you're bidding on in Adwords, it will impact your quality score. This is one of the reasons why your paid and organic efforts need to work together.
Basically, Google will look at your landing page and ad to determine your quality score. This score will determine how much money you'll spend for getting a good ad position
#3 – COST PER CLICK
While you can have a budget for your campaign, it doesn't always mean you have to use all of it. The cost that you'll spend on a search term is determined by your competition. The cost per click (CPC) is determined by how much you paid.
A way to improve this metric is to make smart decisions on the type of keywords you're going after in your campaign. The more generic, the more people will bid on it. Long-tail keywords tend to have a high quality score, which can lower your CPC.
#4 – COST PER CONVERSION
Conversions will tell you how many leads or sales your company got from the campaign. The cost per conversion or cost per acquisition (CPA) is also determined by your quality score. Nevertheless, there is more that goes into the CPA. You can actually change your bidding strategy to only pay for each conversion. This can help you to avoid spending money on search terms that may not be directly driving business.
When reporting on KPIs, it's important to show the entire story. For example, some metrics impact others. You wouldn't expect to have a high CTR and a low quality score. Therefore, look at the KPIs that show the big picture. At the end of the day, it's about sticking to what clearly indicates progress according to the goals while not overloading with metrics.
