Google Ads is a well-established online advertising platform developed by none other than Google itself. Everyday when online users like you type in words at the search engine, you would have a high chance to come across relevant ads popping out on top of the results. If you are looking to start running Google Ads for your business, then let’s start by introducing you to the 5 Google Ads Metrics you should know!
Impressions is the frequency of your ads showing to others. In this case, this includes every time users searched on Google, the number of times your ads appeared on their result page.
In addition, your budget directly affects your impression metric, the more you invest in it, the more often the ads are shown.
Cost is the total amount of money you have invested in your ad campaign during the time period. Most importantly, it can be categorised to two main types: Cost Per Click (CPC) & Cost Per Action (CPA)
What are the 2 differences? Let’s check it out!
Cost Per Click (CPC)
This simply means that you pay a cost every time users click on your ads.
The formula will be: Average Cost Per Click Formula: Total Spent / Number of Clicks
Using two examples with the formula:
1. If you have spent RM500 and received 1000 clicks, you would get an average CPC of RM 0.5
(RM500 / 1000 = RM0.5)
2. If you have spent RM 500 and received 5000 clicks, you would get an average CPC of RM 0.1
(RM500 / 5000 = RM0.1)
Certainly, a well-optimized campaign ad should have a declining CPC overtime.
These are the 3 factors that may affect your CPC, as below:
- Ad Rank: How your ad is ranked on the Search Engine Result Page (SERP)
- Maximum Bid: The maximum amount set by you that you are willing to pay for every click
- Score Quality: A scale of 1 to 10 showing the quality of your ads, keyword and landing pages.
Cost Per Action (CPA)
Cost per action is also cost per acquisition. Meanwhile, this is the money needed for you to convert a user. The actions or acquisitions in this metric are set by you which is the desired goal you want.
- Users making a purchase on your website
- Users filling up the sign up form
- Users clicking on the contact link to reach you
How to calculate? The formulate is shown as below :
Average Cost Per Action Formula: Total Spent / Number of Actions
Using the previous example:
If you have spent RM 500 and received 1000 clicks, you would get an average CPC of RM 0.5
When 100 of the 1000 clicks made an action, you would get a CPA of RM5
(RM500 / 100 = RM5)
Conversions means the number of actions taken through ads. Well, the great thing about this is that you can have many options in customizing what you defined as conversion actions. Besides that, all these can be done through the conversion tracking tool in Google Ads.
Category of Conversion Actions include:
- Sign up
- View of a key page
From here, you can customize the transaction specific value (RM X) for tracking each conversion:
- Using same value for each conversion
- Using different value for each conversion
- Choose not to use value
In addition, you can choose how many conversions to count per click or interaction:
- Every (Eg: 5 purchases count as 5 conversions)
- One (Eg: A user download a brochure multiple times count as 1 conversion)
As the name suggests, this metric simply tells you how many clicks have been performed on your ads. However, this only tells you how many people have clicked on the link, without any other supporting information on desired actions taken or how often it is clicked. With this metric alone, it does not provide enough useful insights on the performance of your ads.
5. Click-through-rate (CTR)
Click through rate means the effectiveness of your ads by calculating how often the ads are clicked. The keyword here is “how often”.
Wondering how to calculate the formula? Let’s check this out!
CTR Formula = Number of Clicks / Number of Impressions x 100
*Times 100 is to show the percentage or rate
* Impressions: Number of times your ads have been shown and or seen by users.
Let’s say the number of impressions is 100, and the number of clicks performed is 8, you would get a CTR of 8%
In fact, the average click-through-rate (CTR) in Google Ads across all industries is around 5% on the search network. This means that you should aim for the scenario when every 100 people come across your ads on the search engine result page, there should be 5 of them who will click on your ads.
If you want to increase the CTR, without a doubt you would need to write creative and eye-catching copywriting for your ads in order to attract users to click on them.
Lastly, CTR can based on ad groups or campaign:
Ad group: Refer to the group of ads targeting with shared keywords
Campaign: Refer to the set of one or more ads groups.
We believe now you are the master of Google Ads Metrics. As a well-established digital marketing agency, of course the service from Cloudix includes running Google Ads to improve the sales and branding for your business. As mentioned earlier, the lower the Cost Per Click (CPC) and Cost Per Action (CPA), the better it benefits you, that’s why you need experts who can constantly monitor and optimise these metrics.
Last but not least, feel free to contact us for FREE consultation if this service has sparked your interest!