Understanding the Metrics

05.05.2017 |

Episode #5 of the course The fundamentals of PPC by Jessie Leong


The data presented in each PPC platform can be a bit of a minefield, especially AdWords, and it can be difficult to understand their impact. Let’s run through the main metrics, since these are useful regardless of your business goals. Once you’ve got a grasp on these, you’ll be able to understand how your campaigns are performing.

Quality Score: This is AdWords’ way of making sure ads and landing pages are highly relevant. Since where you rank on AdWords is determined by your max CPC and your Quality Score (remember you only have to pay 1p more to be in one position above your competitor), it’s super important to nail your Quality Score. Making changes to improve the components that make up Quality Score could help you to pay less for a high position. Quality Score is based on these factors:

● Ad relevance

● Expected click-through rate

● Landing page relevance

Average Position: Used for search engine marketing, this is where your ad appears on the search results page for any auction you’re eligible to run in. This is determined by your max CPC as well as your Quality Score. On mobile devices where the screen is significantly smaller, it’s indeed beneficial to try to get into the first two ad spots, as these are the only ones above the fold.

Impressions/Reach: The number of people eligible to see your ad.

Click-Through Rate: Of all the people who were eligible to see your ad, how many of them clicked on it? Click-through rate is worked out as the number of clicks divided by impressions.

Conversion: A conversion might mean an online form completion, or it might count as the download of your company white paper, a purchase, or hitting the play button on a video you’ve embedded on your site. When you’re setting up your campaigns, you will determine which action or step of the customer journey counts as a conversion.

Cost Per Conversion: This refers to how much it costs you to acquire a conversion. This is calculated by taking your overall cost and dividing it by the number of conversions you’ve received in that time frame.

Looking at big sets of data can be overwhelming at times, but understanding these main metrics will give you a better basis for achieving results you’re happy with. Also think about what metrics are important to your business goals. If you’re creating a brand awareness campaign, then the reach of your ads will be more important than the number of conversions. If you’re more interested in generating leads from PPC, then the number of conversions and their cost will be your focus.

Tomorrow, we’ll be talking about how to optimize your campaigns for success. Until then….


Recommended book

Lean Analytics: Use Data to Build a Better Startup Faster by Alistair Croll, Benjamin Yoskovitz


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