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Are You Focused on the Most Important PPC Metric?

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So, how’s your PPC campaign going?

How do you know?

What metrics are you using to gauge your campaign’s success?

There’s certainly no shortage of PPC metrics you can look at to try to measure the effectiveness of your campaigns. But what’s the MOST important metric to look at?

That’s exactly the question a small business owner asked me recently.

He’d been stressing out over the performance of his AdWords campaigns because his Clickthrough Rate (CTR) had dropped by 15%. However, he was getting more Clicks and Impressions than before the big drop in CTR.

He had no idea whether this was good or bad and that’s why he reached out to me.

My answer: “It depends.”

Okay, I know. That’s a cop out. But the most important PPC metric truly is dependent on the goals of your campaign.

If all you’re interested in is branding and getting your company’s name in front of as many prospects as possible, then the metrics you should really focus on are Impressions and the Average Position of your ads.

However, in most cases (including the small business owner who reached out to me), AdWords is not about branding.

It’s about sales…dollars…putting cash in the ‘ol bank account!

So if that’s the ultimate goal, then my vote for the most important metric you should be keeping an eye on in your PPC accounts is PROFIT (or, on a more granular level, Profit Per Impression.)

Why Profit Per Impression?

Well, because if you know that every Impression you get results in you making $0.05, $0.50 or $5.00, you wanna get as many of those profitable Impressions as you can (and when you’re in that type of situation, AdWords has become your personal license to print money)!

By calculating how much profit each Impression for your Campaigns/Ad Groups/Keywords generates, you can make smarter decisions about optimizing your campaign so it’s as profitable as possible for your business.

There are a lot of metrics we keep our eye on when managing a PPC campaign.

Some of the key ones we look at include…

Impressions so we know how many people are actually seeing our ads.

Clicks so we know how many people we’re getting to our website.

CTR so we can gauge how much our ads are resonating with the prospects who see them.

Cost Per Click (CPC) so we know how much we’re paying for a click.

Conversion Rate so we know how many people we get to a site are taking action.

Impression Share so we know what percentage of the time our ads are showing up in the auction.

There are other metrics we look at too, but at the end of the day, the success of most campaigns is gonna be measured by whether they’re turning a profit or not. End of story.

So that’s what my vote is to keep the closest eye on Profit Per Impression. It gives you a way of understanding what’s really bringing in the money that the other metrics, in and of themselves, can’t.

How can you measure the profitability of a campaign?

Well, if you’re selling directly online through an ecommerce site, it’s pretty easy. Between Google AdWords and Google Analytics, you should have all the data you need (and most of the calculations can be done for you right within AdWords itself!).

The only time you may want to do some additional calculations is if you want to figure out your Profit Per Impression.

To do this simply divide your Profit (Revenue – Cost) by Impressions and multiply by 1000.

But what if you’re selling offline and/or are a local business owner? Tracking results from a PPC campaign becomes a lot more challenging in those situations because often multiple phone calls, emails and/or in-person/store visits are involved.

Challenging…but not impossible!

And the good news is it’s gettin’ a whole lot easier! There are a number of new tools and technology that are availableand affordableso even small businesses can keep track of offline leads.

First, let’s start off with the obvious…you wanna track whatever you can on your website. Contact Form submissions, Request a Quote Form completions, Whitepaper downloads, etc. can be tracked using Conversion tracking code from AdWords, Bing Ads, etc.

True, it’s not easy to assign values to all of these things so you can use them to calculate the profits they generate so you’re just going to have to do the best they can (Hint: Marketing automation, which we’ll get to in a minute makes this much easier).

Even more important for many businesses is to set up call tracking. I can’t emphasize how important this is for businesses who get/want phone calls. Yet still so many are not doing it even though it’s fairly easy and cheap to implement.

In fact, this just got even easier and cheaper with Google’s recent announcement that they are now offering FREE website call conversion tracking within the AdWords interface. The way it works is you get a code snippet from Google that needs to be placed on your website in the areas your business phone number usually appears. The code will then dynamically insert a Google forwarding number on your website that allows you to track the calls generated from AdWords down to the keyword and ad level.

Pretty sweet, right?! Well, yes and no.

I haven’t tested this myself yet because I’ve heard enough from others who have that it’s not quite ready for prime time. It seems Google needs to work some kinks out of the system first. Hopefully they’ll do that soon and if/when that happens this will be a very good option for many AdWords advertisers.

Now even if/when Google does work that out, you may still want to consider using a 3rd party call tracking service instead.

Why? A few reasons.

First, the Google forwarding numbers are all toll free numbers (although in the UK you can get a local number). If you’re running a local business, having a local number on your site can help improve conversions by reinforcing to prospects that you’re a local company (I’ve tested this in the past and a local phone number DOES boost conversions for local businesses).

Second, the Google forwarding numbers give you information about calls from AdWords but not from other sources. Using a 3rd party call tracking option can give you a more complete picture about calls generated from Bing Ads, Facebook, LinkedIn, organic traffic, etc.

Also, 3rd party tracking can give you additional benefits like call recording that could very well be worth paying for (and these 3rd party call tracking services are not all that expensive to begin with!).

But if you really want to get your offline conversion tracking down to a science, then you should be looking at using a marketing automation system.

Marketing automation software will pull data about who’s coming to your site (and from what sources), what they do when they’re on the site, how many times they visit the site, etc. and marry it with your CRM (and call tracking) data so you have a very clear picture of what each lead is worth.

Well known marketing automation companies like HubSpot and Marketo may be out of the budget for many small businesses. However, there are more affordable options out there that will work quite well (I’ve used SharpSpring and think it’s a very strong and affordable option which lets you calculate your PPC profits down to the keyword level).

Impressions, Clicks, CTRS are nice and all, but at the end of the day you can’t deposit them in the bank. Keep your eye on profits first by using one or more of the tracking options described above and you’re well on your way to PPC success.

Over to You: Which metric(s) do you use to determine PPC campaign success? Leave a comment to let us know.

Author

Adam KreitmanAdam Kreitman coaches business owners on how to make their websites more compelling to their prospects…and to Google. He owns Words That Click, a firm specializing in Conversion Optimization and managing Google AdWords campaigns for small businesses. Follow him on Google+.

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