Being able to understand and make informed decisions based on PPC analytics is vital to getting the highest return on investment from your ad spend. But are some analytics more important than others? And if so, which ones? In this guide we’ll take a closer look at the analytics metrics that warrant your attention — and which ones are only worth a passing glance.
How Do PPC Analytics Differ from Organic Traffic Analytics?
Organic traffic is traffic that comes from the search engine results pages that you don’t pay for. It’s traffic using keywords that you rank naturally for, and, depending on what those keywords are, as well as the competitiveness of the market, can be a very lucrative marketing strategy in and of itself.
But when you’re looking at PPC analytics, you can’t really do an apples-to-apples comparison against organic analytics — they’re two different things. Beyond paying for traffic versus getting it for free, there are some notable differences.
While all metrics are worth noting, things like time spent on page, number of pages viewed per visitor and so on, are vital to getting the most out of your organic traffic. You want to know for certain which pages are converting and how many visitors that found you through regular search engine results pages continue to navigate your site beyond the page they land on.
PPC analytics are more about getting the most out of every dollar you spend – while still focusing on the aforementioned metrics. It’s about finding the right balance between how much you spend acquiring those visitors, versus how much those visitors ultimately bring to your bottom line.
Understanding Key Performance Indicators – What They Do and Why They Matter
KPIs are one of the best ways to measure any type of business goal, but they are particularly useful in measuring the success (or lack thereof) of your PPC campaigns. KPI stands for Key Performance Indicator, and when dealing with PPC analytics, there are certain indicators that will give you an answer at-a-glance as to how well (or how poorly) a campaign is doing:
- Click-Through Rate (CTR)
- Cost Per Click (CPC)
- Cost Per Acquisition (CPA)
- Conversion Rate
ROAS and ROI
If the above wasn’t enough alphabet soup for you, there’s also ROAS (Return on Ad Spend) and ROI (Return on Investment). Normally, marketers look at ROI as (revenue / cost) but since there’s a cost in terms of the marketing itself, a more accurate formula would be (revenue – cost) / (cost).
In order to illustrate the difference between ROI and ROAS, let’s look at a simple example from Adalysis:
As this example illustrates, campaign 3 would need to lower its bids by 50% in order to break even. ROAS is always a positive number, so it’s the most often method used to set bids.
Are There Any Metrics that Aren’t Important?
Looking at your PPC metrics, you’ll find a lot more than just the categories noted above. There are referrals and traffic sources, regional metrics, technical details and a lot more. Simply looking at a PPC analytics report can be overwhelming if you’re not sure what you’re looking at. With that being said, you may ask — are there any metrics that really aren’t worth my time or consideration?
And, while all metrics are important, some carry more weight than others. The ones I’ve noted above carry the most rate, while impressions, another common metric, carries far less. While still worth noting, impressions can be incredibly misleading. In 2013, a study by ComScore showed that 54% of display ads are never seen.
The ads are in the system, to be sure, but the user could have an ad blocker up, the ads could be below the fold (below the first 1/3rd of screen space), didn’t finished loading yet, and a host of other issues. Of course, when you’re new to PPC advertising and you look at impressions, it can look impressive to see such a big number.
“Our ad got 1,000 impressions!” – It certainly looks good on paper. But that doesn’t directly translate into anything impactful in the grand scheme of things. 1,000 more people don’t know about your company. You didn’t get 1,000 more paying customers. You may not have even gotten 1,000 actual eyeballs on your ad. It’s just…there.
Even if you’re shooting for brand awareness, impressions or impression share is practically meaningless. It only tells you how many times your ad was shown. And at the heart of it — do you really care? Instead, you want to concentrate on the aforementioned metrics to truly demonstrate that your ads are resonating with your target audience. If you really want to measure brand awareness, look to social media — conversations, likes, shares and other metrics.
Conversion per Impression
Now that I’ve just finished telling you why looking at impressions is bad, I’m going to make one little exception – and that’s leveraging a little-known metric called conversion per impression or CPI. When you’re testing your ads, you may wonder if it’s better to get a lot of clicks (but few conversions) or not many clicks (but lots of conversions).
There’s no right answer as to which one is “better” since they’re both relying on two different metrics to create that final number. So instead, the two items can be combined into CPI. If you want the most conversions possible, you’d use this metric to measure your campaigns against. Clicking the link above will give you more information, as well as teach you how to pick winning CPI-based ads based on different criteria.
Improving Your PPC Quality Score
When it comes to Google Adwords, the largest PPC player, your Quality Score is a direct indicator of how much you’ll pay per click. But how is it calculated? There are several factors that go into what makes a site’s quality score, including:
- How well your chosen keyword or keywords have performed in the past given the ad’s position
- How relevant the ad is based on keywords and ad copy
- How relevant the landing page is — including its design, content, the information it provides, and so on.
To help you better untangle the confusion behind Quality Score as well as determine your own, we’ve created a helpful Quality Score template where you can track how your Quality Score has changed over time, how it compares to other metrics, and so on. You’ll also find several tips for improving your score, as well as helpful resources.
Google keeps its exact calculation methods as to how much each of the points above affects the score, a closely-guarded secret. But ad analysis gurus have done their detective work and have shared their results with the PPC community and you’ll find that information and much more by following the link above.
You’ll also be glad to know that SuperMetrics can help break down your Quality Score into three understandable components:
- Expected CTR
- Ad Relevance
- LP Experience
This helps make your analysis much more thorough and grounded on the right kinds of metrics, so that you can, in turn, make better data-backed decisions on your advertising.
The Bottom Line – Getting the Big Picture of Site Performance
As you can see, there’s no “one size fits all” approach when it comes to judging which metrics are best — since they vary depending on so many factors. However, by using the metrics above as a general guide, you’ll be able to better understand the big picture of your site’s performance, both from a technical, as well as a marketing standpoint.
How SuperMetrics Can Help You Get More from Your PPC Analytics
If you’re ready to go beyond simple reports and truly get meaningful data from your PPC analytics, it’s time to try SuperMetrics. From automating your reporting to turning your Google Drive into a complete web analytics business reporting system, SuperMetrics handles all the data crunching and functions to give you the kind of impactful data you crave. Even if you’re a PPC management pro, you’ll find SuperMetrics invaluable to help you save money, improve conversions and get more of what you really want out of every PPC campaign.