If you are new to Google Ads and have been running Search campaigns for a while, you might start wondering how things are going performance-wise. There are lots of numbers and statistics in your ad account but what do they mean and how can you interpret them?
In this post, we put together the most important Google ads performance metrics, explain what they measure and why they are of interest. We also explain how to work out the most relevant metrics for your individual business situation. Since Google Search campaigns are the most popular campaign type for new Google Ads users, this post focuses only on search-related performance metrics.
10 Google Ads Metrics You Should Know
1) Impression: Every time your ad appears.
2) Click: Every time someone clicks on your ad.
3) Click-through rate (CTR): The number of clicks divided by the number of impressions. A high CTR indicates that many people who saw your ad ended up clicking on it. A low CTR means that your ad displays often but people rarely click on it. To fix a low CTR, check if your keywords are relevant and improve your ad copy (in other words, add more and/or different ad copy to your ads). A good CTR in Search campaigns should be 5% or higher.
4) Average Cost-per-Click (CPC): How much, on average, you pay when someone clicks on your ad. This is relevant because the lower your CPC is, the more clicks you can get for any given budget. Improving your ad quality, CTR and landing page experience can help lower your CPC. There is no generic benchmark for this metric as CPCs vary greatly from industry to industry, from a few cents per click up to a few dollars.
5) Conversion: Any action a user takes on your website that brings value to your business such as a sale, signup, download or lead. What exactly the conversion action is, depends on what is important to your business and what you consider valuable. Conversion tracking usually requires manual setup via a website tag or Google Analytics 4 and most actiosn won’t be tracked automatically by Google.
6) Conversion Rate (CVR): The number of conversions divided by the number of clicks. Similar to the CTR, the higher it is the better but ideally you should aim for a CVR of 3% or higher.
7) Conversion Value: How much a conversion is worth in numerical terms. This is mainly relevant for e-commerce businesses to track actual sales value rather than just the number of sales in a given period. This requires some extra setup but popular Content Management Systems like Shopify integrate easily with Google products and can transfer conversion value data into Google Ads.
8) Return on Ad Spend (ROAS): Another typical e-commerce metric, ROAS is calculated by dividing the total conversion value by the campaign cost (=the amount you spent on your campaigns). In other words, for every dollar spent - how much do you get in return? The result is usually displayed either as a ratio (e.g. 2:1) or percentage figure (200% ROAS). As a minimum requirement, your conversion value should always be higher than the campaign spend but your ideal target ROAS depends on your circumstances and may change depending on the season, promotions, product availability or other factors. Also, keep in mind to include other costs such as marketing costs, shipping costs etc. when working out your ideal ROAS.
9) Quality Score (QS): A number between 1-10 defining how relevant your ads, keywords and landing pages are for a user. A Quality Score is allocated to each keyword in your campaign and should be at least 5 or higher. A low QS results in your ad being shown less frequently and for a higher CPC while a high QS increases the chance of your ad being shown and can lower the CPC. If your QS is low, try optimising the ad message and improving or changing the landing page.
10) Ad Quality: Similar to the Quality Score, this is rather a ranking than a metric but still quite insightful. Each of your ads is ranked either ‘excellent’, ‘good’, ‘average’ or ‘poor’. ‘Excellent’ and ‘good’ rated ads are shown more often while ‘poor’ ads show rarely and should be updated and improved.
Identify The Most Relevant Metrics For Your Business
Certain metrics are relevant for every advertiser, for example, impressions, clicks, CTR, Quality Score or Ad Quality. You won’t get around these whether you run a service-based business, an ecommerce store or anything else.
Other metrics depend on your marketing goal so the first question to ask yourself is what your goal is and what kind of outcome you expect from your campaign. Is it online sales, customer enquiries, bookings, content engagement or something entirely different? An ecommerce store will heavily rely on Conversion Value and ROAS which would be of lesser importance for a campaign trying to generate leads or user engagement. On the other hand, a restaurant or hotel business will heavily rely on online bookings or phone calls and use these metrics to measure the success of their campaigns.
It is okay to have different campaigns with different goals as long as you focus on one goal only per campaign (in other words: don’t mix things up). For example, you can set up an upper-funnel campaign to acquire new website visitors and encourage content engagement plus another mid- or lower-funnel campaign to generate conversions like signups, contacts or sales.
While the above benchmarks are a good guideline, it is recommended to work out over time what ‘good performance’ means for your individual situation and what performance you expect to run a profitable business.
Conclusion
Your Google Ads account is full of tables and numbers but only a fraction of them will be relevant for your specific scenario. Take the time to define a clear campaign objective, set up relevant tracking and test and experiment with keywords, ad copy and landing pages to improve performance over time.
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