Pay-Per-Click (PPC) campaigns are widely used by advertisers and marketers alike. The main reason is that paid ads can efficiently drive business goals because a data-driven approach is used to create such campaigns in the first place. Moreover, advertisers can leverage various metrics and KPIs (Key Performance Indicators) to measure every aspect of their campaign.
So, with so many metrics available, which ones should you track in 2021? The answer to that question varies based on the campaign itself and your goals. However, every PPC campaign has one thing in common, and that means that there are a few essential metrics that everyone should track regardless of the circumstances. With that in mind, here are a few PPC metrics to track in 2021.
Cost per Click
The purpose of most paid campaigns, aside from ones designed for brand awareness, is to help businesses gain a profit. These profits are gained through conversions, but first, you have to spend money to earn money. This is why the CPC (Cost per Click) metric is of vital importance.
As the name suggests, you pay every time someone clicks on your ad. The costs vary depending on many factors, such as the type of campaign, niche, keyword competitiveness, and so on. What matters is that this metric can help you determine how much you can pay per click and still make a profit in the process. In other words, this metric is essential for determining your PPC budget.
Customer Lifetime Value (CLV)
Another essential metric measured in various marketing campaigns, not just PPC, is CLV or Customer Lifetime Value. This metric helps you determine just how much your company earns from a single customer during their lifetime as a customer.
The longer a customer remains a customer, the more profit you gain from them. Financially speaking, this metric helps you rate the overall success of your PPC campaign. In addition, this metric helps you understand the customer so that you can adjust your bidding strategy accordingly.
This metric determines the relevance of your ad, as seen by Google. In the majority of PPC campaigns, the ultimate goal is to reduce expenses and increase profits. The best way to achieve this is to improve the overall quality score of your ads. Google takes a few factors into account when determining the quality score. For example:
- The past click-through rate of your keywords and your account, in general
- The relevance of your landing pages
- The relevance of your keywords and ad text in contrast to user search and intent
For instance, if Google rates your landing pages 1/10, which is the lowest score, they will increase your CPC by 400%, thus encouraging you to do something to make your landing pages more relevant. On the other hand, if you get a 10/10 score, you get a 50% discount for the CPC.
In any event, you have to measure not just the quality score but the factors that impact it as well. That’s why you should consider working with an AdWords agency to help you keep an eye on everything. They will help you track every detail and make the necessary improvements so that you can reach that 10/10 score more easily.
Click-Through Rate (CTR)
The purpose of ads is to encourage people to click on them and drive traffic to your website so that you can work on converting leads into customers. A lot of advertisers measure how many people have clicked on the ad, but clicks alone aren’t enough to paint the whole picture.
That’s why the CTR metric is more important to measure. You basically compare the number of people who have clicked on the ad with the number of people that have seen the ad. That said, CTR is measured by dividing the number of clicks the ad received by the number of impressions.
CTR directly influences your quality score and rank. Furthermore, a low CTR rate may show that your ad isn’t relevant or compelling enough to users, which means the ad requires modifications and improvements.
Conversions are the finish line of every PPC campaign. The more leads you have that have clicked on your ad and converted into customers, the better. It means more sales, revenue, and profits. However, measuring conversion rate is somewhat tricky. In other words, a lot of factors can influence conversion rate ranging from seasonality to the color of your CTA button.
Simply clicking on your ad doesn’t mean that the lead will convert, of course. But somewhere along the way, the lead bounced off, which means that something went wrong. This is why a lot of marketers constantly A/B test their landing pages and other factors. Naturally, you want as high a conversion rate as possible, which is why the entire sales funnel needs to be flawless.
PPC campaigns have proven to be more than effective at driving business goals time and again. Advertisers that rely on PPC know how powerful this marketing strategy can be, but they also know how complex the environment is as well. That’s why it’s vital that you track relevant metrics that can show how your campaign is performing in 2021.
About the Author:
Keith Coppersmith is a business and marketing expert who has experienced both the rise and fall of many businesses. As a regular contributor at BizzmarkBlog, he enjoys writing and providing insight of the industry based on both practice and theory.