Online advertising plays a significant role in digital marketing. Without a doubt, a well-prepared marketing ad campaign can help you to reach your marketing goals such as gain awareness or increase the number of conversions in no time. According to statistics, about 75% of people claim that paid ads make it easier to find what they are looking for.
Investing in Online Advertising helps you to improve and easily boost your organic marketing efforts by promoting it on different channels and increasing your brand’s overall reach. And while for SEO it takes several months to see the result, with PPC ads, on the opposite, you see the outcome immediately. The majority of companies are successfully using online advertising tools in their businesses.
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Marketing KPI Handbook
✔ 17 Marketing KPIs explained
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Today we will focus on one of the most popular online advertising platforms – Google Ads!
In this article, we will cover such topics as main opportunities of online advertising with Google Ads, pros and cons of different Campaign types, and seven must-track marketing KPIs for Google Ads.
Structure of the article:
- Opportunities of online advertising with Google ads
- Campaign types on Google Ads: pros and cons
- Seven Marketing KPIs that are important to track in Google Ads
First of all, let us deep dive into the topic and uncover the main opportunities of this online advertising platform.
Opportunities of Online Advertising with Google ads
Google Ads, also known as Google Adwords, is an online advertising platform that was developed by Google two decades ago, in 2000.
Nowadays, the platform is widely popular and is used by many marketers worldwide. According to Ppcresellers, almost 80% of companies are using Google Ads for online advertising. Google Ads platform is using a pay-per-click (PPC) pricing model which implies that you pay only for the result, namely for a number of clicks you got. Some marketers also call it the cost-per-click (CPC) model.
One of the reasons why Google Ads is so popular is its ability to place your ad on both the results of search engines like Google Search (the Google Search Network) and non-search websites, mobile apps, and videos (the Google Display Network).
Let us have a look at some statistics regarding online advertising on Google Ads.
- Google Ads provides one of the best platforms for building brand awareness, increasing website traffic, and conversions.
- Search ads can increase brand awareness by 80%.
- According to emarketer, roughly 35% of users decide to buy a product within five days of searching for it by using Google.
Although Google Ads can allow you to achieve your goals very fast and immediately see the results, you might spend quite some money on them.
Therefore, for the sake of your marketing budget safety, it is important to understand how effective the campaign is as soon as possible. In the case of online advertising it is crucial to take actions well in time and optimize campaigns for better results early on.
First of all, it is important to choose the most suitable campaign type for your online advertising.
Campaign types on Google Ads: pros and cons
By selecting the campaign type you define where your target audience will be able to see your ad.
When setting up your campaign on Google Ads you can choose amongst one of these five campaign types:
1. Search campaign
Pros the Search campaign:
- Search campaign can help you to increase website traffic, get more leads and increase sales numbers
- This type of campaign implies targeting highly relevant and valuable audience: people who are searching for a specific service or a product
Cons of the Search campaign:
- High competition: competitive industries have a high cost per click
- High costs in the case of big audience reach
- Some keywords can be very expensive (depending on the industry)
- Easy to spend a lot of money at the beginning
2. Display campaign
Pros of the Display campaign:
- Visual ads attract more people: this ad type is especially great for promoting physical products
- Great potential for brand awareness
- Broader targeting potential
Cons of the Display campaign:
- Lower CTR
- Lower Conversion rate since people who see the ad is at the consideration stage and are not ready to buy yet.
3. Video campaign
Pros of the Video campaign:
- Video ads are powerful when it comes to catching audience attention
- Broad placement opportunities: video content can be placed on Youtube and across the Google Display Network
- Great targeting potential
- Possibility to learn more about your audience with Analytics: levels of engagement, comparing performance to similar videos, audience demographics, average video watch time
- Possibility to tell more about your product: story-telling
Cons of the Video campaign:
- High competition: some keywords are very expensive
- Irrelevant or random targeting: sometimes targeting can be random, and your video ad can appear within the
4. Shopping campaign
Pros of the Shopping campaign:
- Better qualified leads: ad shows the image of the product and the price (which means that the user when clicking on it has higher chances to convert – he is ready to make a decision)
- Broad Reach
Cons of the Shopping campaign:
- Less control
- Not possible to define negative keywords
- Not possible to change the targeting
5. App campaign
Pros of the App campaign:
- Great targeting potential
- Potentially higher conversion rate: in this case the target audience are more ready to buy
Cons of the App campaign:
- Less control over targeting
- High cost per conversion
- If the app is a free higher chance of impulse purchase: user download the app, use it once and delete it the next day
Often marketers tend to measure the effectiveness of their marketing campaign performance by only focusing on tracking the impressions and clicks. While tracking only these metrics will not help you to see the bigger picture.
So the question remains: what KPIs are important to track to measure the effectiveness of your ads on Google?
Seven Marketing KPIs that are important to track in Google Ads
1. Return on Ad Spend (ROAS)
One of the most important marketing KPIs to track in Google Ads is Return on Ad spend.
ROAS indicates how much revenue did you generate thanks to your Google Ads. It is a percentage of your total costs in Google Ads to the total revenue you earned.
Tracking Return on Ad Spend (ROAS) is crucial since it allows you to keep track of your results and the outcome of the Google ads. It’s one of the main KPI to measure campaign performance. To increase Return on Ad spend it is important to understand what channel will bring you the most profit in the end. Modern AI technologies help you to estimate how much money you should invest in each channel to maximize your result.
2. Impression share
Another important KPI to track is Impression share. This metric indicates the percentage of the impressions that you got with the Google Ads to the estimated number of impressions that your ad could bring.
The potential number of impressions that you could get is called eligible impressions on Google Ads. This metric is an estimation provided by Google and it is calculated using various factors such as targeting settings, ad quality, bids, and approval statuses.
This metric helps you to understand how your ad is performing.
You can follow these steps to improve your ad Impression Share:
- Improve ad quality
Make it as relevant as possible for your audience using the right keywords and relevant landing page.
- Broaden your targeting
Make sure that your focus is not too narrow, especially when it comes to geo-targeting. If you are focused only on one small area, your ad will appear only there. While the more places your ad appears the higher the number of eligible impressions. Therefore, in order to increase Impression share your goal should be to appear in more places. Keep in mind, that this depends highly on your industry and the product you promote. For some businesses narrow targeting is the way to go.
- Increase campaign budget
By expanding your campaign budget you grow your chances to be shown more often.
- Increase your bid
If your bid is too low it decreases the chances of your ad appearing in the ad auction. In other words, your ad will not be shown on the first page. However, it is important to understand that in case you have a low quality score, even the higher bid will not guarantee you that your ad will appear on the first page. It is a combination of both factors: the quality score and the bid strategy.
3. Click-through-rate (CTR)
By tracking click-through-rate (CTR) you can get valuable insights about how good your marketing campaign is performing. It indicates how many people who have seen your ad clicked on it.
As a digital marketer, you want to see your CTR growing, since it is a real indicator of your ad performance. High CTR means that your audience found your ad attractive and what is more importantly relevant.
If your CTR is too low you might need to modify your ad. Make sure you check the main tactics on improving your CTR.
Keep in mind that the average CTR varies significantly depending on the industry.
4. Cost per click (CPC)
Cost per click (CPC) indicates how much one click cost you in total. It is a percentage of your total cost on a specific campaign to the number of times the ad was clicked on.
Tracking this metric is really important for your campaign performance analysis and future budget planning.
On Google Ads, the average CPC equals $1-2 for the campaigns that are placed on Search Network and less than $1 for the Google Display Network.
Important that on Google Ads you can define the maximum CPC you are willing to pay for the click. This way you can control your average ad spend and assure that you will not go beyond the budget.
5. Cost per Acquisition (CPA)
The Cost per Acquisition goes one level deeper than CPC. This metric indicates how much you pay for customer acquisition.
Same as with CPC, the average CPA varies significantly depending on the industry. Knowing your industry benchmark will help you determine how successful your ad performance is.
It is crucial to track this KPI since it shows you what your acquisition costs are in Google ads and, therefore, helps you to get an idea about how effective your marketing campaign is.
Make sure you take this metric into account when presenting the results of your efforts in online advertising.
6. Conversion rate
When setting up your Google Ads one of the deepest desires you have is to increase your conversion rate.
Conversion action can be different depending on your goal. It can be template download, filling up a form, video view, subscribing to your newsletters, making an online purchase, scheduling a call, and so on. Important that you define what is a conversion action for you in the ad.
In Google Ads, the Conversion rate is an average number of conversions received per total number of ad interactions.
It is calculated as a total number of conversions divided by the number of ad interactions.
Important to understand that depending on the industry the average Conversion rate may vary. Therefore, before making any conclusions it is crucial to check what is the average conversion rate in your industry. This will give you an estimate of what result you might want to achieve with your ads.
Conversion rate depends on various factors such as ad quality, its relevance for the target audience, quality of your landing page. The latter plays a significant role in the converting process and, unfortunately, often is being ignored by marketers.
To ensure a high conversion rate you should pay attention to the following factors:
- Quality of your ad: especially it is related to the quality of the visual. Make sure it is original and has a high quality. It is often very powerful if you can show your target audience on the ad – so people can relate to it.
- The relevance of your content: the key to success here is to make your ad relevant for your target audience.
- Quality of your landing page: Make sure that it has a user-friendly design and is easy to navigate through your website to proceed with the conversion action for the user. Moreover, check the loading speed of your page. High CTR and low conversion rates can signify that your landing page needs improvement and optimization.
7. Quality score
The quality score plays a significant role in Google Ads, although often underestimated by some marketers.
This metric is defined by Google and represents an estimation of your ad relevance to your target audience. In other words, Google rates your ad on a scale from 0 to 10 based on its relevance to the target group. Scores above 7 are considered to be a good score. A lower score signifies that you need to improve your ad’s relevance for the audience.
The metric depends on several factors amongst those are landing page relevance, content, and keyword relevance. Important to mention that Google is continuously working on improving its quality score.
The higher the quality score you get the higher the chances that you get better results with Google Ads. Moreover, this metric has a great impact on your CPC. Higher quality scores can ensure you lower CPC, and therefore can guarantee better ROAS.
Therefore, it is crucial to monitor your Quality score and work on its improvement.
These were the 7 main KPIs that you need to track when running your campaigns in Google Ads.
Make sure you pay attention to these KPIs when planning your next campaigns. The more you analyze your current campaign performance the better you understand what works and what not.
Important to understand that when running your ads you need to make sure that your landing pages are perfectly optimized and relevant.
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