Understanding Your PPC Metrics - Part One

One of the questions we get asked quite often is how different metrics impact on a PPC account. So here is a quick guide to understanding the different ways you can measure your account's performance.

Costs – Using overall cost as a metric is a good indicator of how your budget is performing. A campaign that is continually overspending each month suggests that not enough money has been allocated to the marketing budget. On the other hand, if your overall costs are declining month on month, you could look at increasing your reach either by adding new products/services, expanding on to the content network or looking to see if you can increase your impressions share; this is of particular interest for campaigns that are already performing very well.

Bounce rate – This is a good way to measure the success or failure of a landing page, but more importantly the relation between keyword and landing page. If you find that you have a high bounce rate in some ad groups/campaigns, here are some things you may wish to look at in order to improve their performance:

1. Review all the keywords driving traffic to the page and make sure they are all relevant. You may find that you need to move some keywords into a different ad group in order to provide more relevant ad text and landing page, or just give that individual keyword its own destination URL.
2. It is also important that you carry out a negative keyword review. Depending on the size of the account you should be looking to complete this task at least once per month, but for bigger accounts this should be done weekly. By performing a search query report you will be able to highlight words that trigger your adverts, but are not quite relevant to your website. An example could be a product you promote using 'phrase match'; although you want to appear for related terms, you may not want to be found for longer-tail terms such as 'second hand' or 'hire'. By carrying out a search query report you can eliminate these searches, meaning that these visitors are not going to hit an advert and then bounce out.
3. Review your landing page and check for any problems. Make sure you have clear calls to action and the page is easy to understand and presented well. More importantly, check that your product is in stock.

Clicks are a good measurement of PPC success or failure. This is particularly relevant if you are running a branding campaign, are keeping within budget each month yet your clicks are growing month on month.

CTR (Click Though Rate) measures how visitors interact with your ad text. A high CTR could mean either a good advert or a keyword that is not very competitive. You'll also need to take into consideration the advert position, which we'll deal with next.

Ad Position is a guide to how your quality score is improving if your visits, costs and CPC (cost per click) remain the same, however different positions achieve different things within the SERP’s. An average position of 1 is good for branding as you do tend to get a higher click through rate, however the overall conversion rate is not as good as, say, position 3 through 5, where the CTR is lower.

CPC as a measurement on its own is flawed, as there are so many external factors that can impact it; mainly competition. However, as part of the bigger picture of your account, it is possible to reduce the overall CPC through advert positions, increasing CTR whilst lowering bounce rates to improve your quality score, and reviewing your current keyword list.

Finally, keywords are another metric that some clients like to use as a way to measure the success of a PPC campaign. Whilst some clients like to see their keyword lists grow month on month, using reports such as the search query report to identify new keywords driving traffic, other clients like the campaign to decrease the number of keywords driving traffic to just those that convert and drive good revenue.

Overall, these factors should work in conjunction with each other to achieve the marketing objective originally set up in the plan and, although all of these metrics are measurements of your PPC performance, none of these are a measurement of success! Part two coming soon!