In any digital marketing campaign, measuring your success is the backbone of your digital presence. The way to do that is through your KPIs (Key Performance Indicators).

With such tools as Google Analytics or Bing Webmaster Tool, you can almost measure anything you want. So, it’s critical to know what you need to measure to improve your Google Ads campaign profitability. Here are 6 critical KPIs to help you do that!

Costs

When measuring your Google Ads campaign profitability, costs become an important factor for your campaign success.

There are different types of costs as far as digital marketing is concerned: Cost Per Acquisition, Cost Per Click, Click-Through Rate, Cost-Per-Click, Cost-Per-Conversion, Customer-Acquisition-Cost, and more.

However, we’re only going to focus on 2 types of costs: Cost-Per-Click and Click-Through Rate.

PPC marketers can estimate how much they can pay for a campaign ad since they work on a budget. This doesn’t mean they can predict how much they can bid exactly. Bidding is an arena where competitors try to outcompete each other.

Cost-per-click (or CPC) can help you measure how much you’ve paid for an ad. To measure your CPC, divide the total cost of your campaign by how many times the ad was clicked on in that campaign.

Click-Through Rate (CTR) is one of the most significant KPIs to use when you’re trying to evaluate your ad campaign profitability. The higher your clicks percentage, the more likely your campaign will generate more revenue.

To measure your CTR, divide the number of clicks your ad receives by the number of times your ad is shown (also known as impressions). So, if you had, for instance, 7 clicks and 100 impressions, your CTR would be 7%.

Conversions

One of the best advantages that digital marketing offers is the ability to measure conversions in exhaustive detail. A conversion is an event or goal that is tracked and stored when a goal is reached.

There are different types of conversions, but we’ll only focus on 2: conversion rates and conversion values.

Once you’ve set up your campaign, conversion rates can help you assess whether or not your business is on the right path. Using Google Analytics, for example, to analyze your reports can help you pinpoint what you’re doing that’s making the strongest conversions.

This way, you can relocate your budget towards that and see what you can do better in the parts which are performing less than what you’ve predicted.

Conversion value, on the other hand, is the amount of profit increase you assign to targeted conversions. This numerical value will help you translate the impact of those conversions on your business.

Conversion values are of prime significance because they help you track and optimize your return on ad spend to maximize conversions – and therefore ad campaign profitability.

Audience engagement

Businesses can’t ignore relationships with their customers anymore. It’s not an option. However, connecting with your customers in a meaningful and engaging way is no walk in the park.

Many businesses invest a lot of time and effort trying to provide the best experience for their audience making them more willing to engage with their content.

Audience engagement can provide a significant Return on Investment, because people buy on emotion, and justify it with logic.

This is important because when you track how your audience engages with your campaigns, you’ll get an idea of what they like, which in turn will help you present more similar content.

Bounce Rate

Bounce Rate is a metric that shows the number of people who arrived on your landing page and left without taking any reported action.

Tracking your bounce rate is especially cardinal because you want to know the reasons why someone left your site. Here are a few reasons to consider:

–   Poor page design: Clarity is a key component of any landing page design. Keep it simple and on-brand.

–   Misleading ad copy: A landing page that doesn’t match what the ad expressed results in confusion.

–   Unappealing CTAs: A call to action that doesn’t inspire your audience is a waste of real estate. Use words that present value to your audience, e.g. Get your free eBook, Download your report, and so on.

Keywords performance

Analysis is the cornerstone of marketing. Marketing performance helps your business optimize market reach and budget allocation.

Because keywords dictate the entirety of your search campaign, you should optimize and report on the performance of your keywords for maximum profitability.

Analyzing the performance of your keywords will help you:

–   Channel your budget towards more profitable keywords.

–   Gain insight on market behavior.

–   Discover new markets.

Return on Ad Spend

Return on Ad Spend (ROAS) is one of the most valuable metrics for PPC marketers. ROAS answers an essential marketing question: “What will I gain from putting X amount of money into Y marketing channel?”

This question is especially crucial because if a given marketing channel isn’t generating any revenues, then there’s no point in investing any more resources in it.

ROAS and ROI (Return on Investment) are similar on so many levels. However, while advertisers use ROI to measure the overall effectiveness of a marketing strategy, they use ROAS to measure the effectiveness of a specific campaign, ad group, or target keyword. So, how do you calculate your ROAS?

To determine your ROAS, there are 2 ways:

One way would be to divide the revenue you made from your ad campaign by the amount spent on the ad campaign.

Say, if you made $500 and spent $100, you’d be making $5 for every dollar you spent. While this brings some insight into how much you made, there might be other fees that took from your profit (e.g. product fulfillment)?

To get a fair assessment of how much you made, subtract what you paid to run your ads from your total revenue, before dividing it by cost.

Most people prefer the first option because it resembles the ROI equation, but they’re both available. My advice would be to try both and figure out what works best for you.

Conclusion

Measuring your KPIs is one of the most fundamental parts of every digital marketing strategy. Your KPIs will provide you with a map that not only improves your Google Ads campaign profitability but also have a huge impact on your business.