PPC Advertising Metrics for Driving Performance

PPC focus should not be only ROI but also the factor influencing the growth of better performing campaign and optimizing the bad ones to make it profitable. There are various drivers involved in driving the pay per click –

  • Click Through Rate (CTR)
  • Average Position (Ad Rank)
  • Quality Score
  • Impression Share
  • Bounce Rate
  • Conversion Rate
These above metrics play are the most important part in improving campaign and its performance. As holiday season approaches we should expect more traffic. These traffic should be optimize so the overall KPI of the SEM is met. Measuring the success of online advertising is defended by the popularity of the ads being served to public which in return would deliver conversion.

Click Through Rate (CTR): Number of Clicks/Number of Impressions
To measure the performance of the adtext CTR plays the most important role. This metrics helps evaluate the interest of the person willing to buy the product. Having a lower CTR would help understand the importance message being delivered to the audience is not impressive to engage them to visit the website. Hence action should be taken to improve the Adtext.

Average Position (Ad Rank): CPC Bid * Quality Score
The actual position of the Ad being displayed in the search page.The position of the Ad is calculated based on Quality Score and the CPC bid which the advertiser is willing to pay. Total clicks accrued could vary by position. 

Quality Score: Average Position (Ad Rank)/CPC Bid ) + Other Factors
Computation of Quality Score involves various metrics and is a range between 1 to 10 where 1 being the poorest and 10 being the best. Higher the quality score lower the CPC. Factors involved in computing Quality score is mentioned below:
  • Historical Performance of CTR and Accounts
  • Click Through Rate (CTR)
  • URLS of the AdGroup
  • Ad Copy Relevance
  • Relevancy of the Keywords with the Ad Group
  • Relevancy of the Keyword matched with the Ad and the Search Query
  • Quality of the Landing Page
  • Loading Time of the Landing Page
  • Geographical Considerations where the Adwill be shown
  • Other Factors
Conversion Rate:Total Goals Met/Total Visitors
 An indication for the quality of the clicks being bought. Higher conversion rate indicates that the quality of the clicks are good and the right product is being offered to the visitors. A goal could vary from industry to industry, a registration could  be consider a conversion for one company while purchase could be goal for another. It should always be in the norms of advertisers to improve conversion rate.

Impression Share: Total  Market Impression - Total Impression where Ad participated
It indicates the share of voice in the category the competition where the auction participated. Once the account is set the category of arena to be competed is chosen, the ads are displayed in the same category and impression share indicates the lost of opportunity due to impressions share. These loss of opportunity could be due to budget limitation or could be due to poor quality score.

Bounce Rate: Total Visits on the Page - Total Visitors left without any activity on the Page
It is one of the most important metrics for any online business. It indicates the visitors interest over the page once he landed on it. If the user leaves without any activity or viewing any other pages of the site it would be an indication that the information which he was looking was not found on the page. Lower the bounce rate better the page would be.

All these above metrics are a proper way of evaluating the performance  the Campaign. The success, failure and the improvement of the campaign could be made if the above metrics are measured effectively. To measure the metrics properly it should always be considered with the industry specific benchmark. Nevertheless the trend over the period of time could also indicate the performance of the campaign.

    About this entry