Understanding Google Ads Metrics
As a freelance web designer and marketing consultant based in Cairns, I know firsthand how powerful Google Ads can be for driving traffic and generating leads. Whether you’re a plumber bidding on competitive keywords or a tour operator looking to book their clients on tropical adventures, the Google Ads battlefield is full of fierce competition.
Being able to understand and analyse the key metrics behind your ads is where the real magic happens, enabling you to fine-tune both your ads and your landing pages for optimal performance. This knowledge might just be the key to making sure you don’t waste your Google Ads budget by catching potential issues early and optimising your ads to get better quality clicks and conversions.
Let’s dive into the essential Google Ads metrics that can help you transform your campaign performance. By mastering these metrics, you’ll be able to optimise your ad performance, make your own data-driven decisions, and ultimately maximise your marketing efforts. Whether you’re new to Google Ads or looking to refine your strategies, this guide will help you focus on the metrics that matter most for your campaign success.
Google Ads Metrics Overview
I’ve listed the top metrics I like to track and keep an eye on below. For each metric, you’ll find how to calculate it, whether the goal is to have a higher or lower value, and some important considerations to help you interpret the data effectively.
I have also included screenshots of one of my clients Google Ads campaigns to help you find the columns in your own Google Ads account. If you can’t see some of the columns, make sure to click on the ‘Modify Columns’ button in the example to add them in!
Click-Through Rate (CTR)
- Indicates ad relevancy and effectiveness.
- Note: Sometimes Click-Through Rate can be labelled as ‘Interaction Rate’ in your Google Ads Campaign.
- Measurement: (Clicks / Impressions) * 100.
- Goal = Higher: A higher CTR means your ads are more relevant and appealing to the audience.
- Considerations: If CTR is high but conversions are low, your keywords or ad copy might be attracting clicks from users who aren’t your target audience.
Cost Per Click (CPC)
- Average amount paid for each click on an ad.
- Measurement: Total Cost / Total Clicks.
- Goal = Lower: A lower CPC means you’re paying less for each click, which can improve your return on investment.
- Considerations: If CPC is unusually low, ensure that the quality of traffic isn’t compromised, as cheaper clicks might not always lead to valuable conversions. If CPC is high, it could mean you’re bidding on highly competitive keywords. Ensure these keywords are driving quality traffic and conversions.
Cost Per Conversion (CPA)
- Average cost to acquire a conversion.
- Measurement: Total Cost / Total Conversions.
- Goal = Lower: A lower CPA means you’re spending less per conversion, making it more cost-effective.
- Considerations: A high CPA can be acceptable if it still allows for profitability, especially for high-value or recurring services. Ensure your CPA aligns with your business model and profit margins.
Impression Share (IS)
- Percentage of total impressions your ads receive compared to the total available.
- Measurement: (Impressions / Total Eligible Impressions) * 100.
- Goal = Higher: A higher IS shows that your ads are capturing more of the potential impressions, indicating better visibility across Google.
- Considerations: High impression share is great, but if it’s accompanied by low CTR, your ads might not be engaging enough.
Return On Ad Spend (ROAS)
- Revenue generated for every dollar spent on ads.
- Measurement: Total Revenue / Total Ad Spend.
- Goal = Higher: A higher ROAS means you’re getting more revenue for each dollar spent, indicating a more profitable campaign.
- Considerations: A high ROAS is excellent, but make sure it’s sustainable and not due to an anomaly or a limited-time promotion.
Ad Rank & Quality Score
- Ad Rank determines ad position based on bid, ad quality, and competition.
- Quality Score rates ad quality and relevance.
- Measurement: Combination of CTR, ad relevance, and landing page experience calculated by Google.
- Goal = Higher: Higher ad rank and quality score can lead to better ad positions and lower CPCs.
- Considerations: While high-quality scores are beneficial, sometimes ads with lower scores can still be winners. If an ad with a lower quality score is converting well and driving profitable results, it can still be a valuable part of your campaign. Google’s rules are guidelines, but real-world performance should guide your decisions.
Conversion Rate
- Percentage of clicks that result in a conversion.
- Measurement: (Conversions / Clicks) * 100.
- Goal = Higher: A higher conversion rate indicates that more of your clicks are turning into conversions, which means your landing page and offer are effective.
- Considerations: If conversion rate spikes unexpectedly, verify that the conversions are legitimate and not fraudulent or accidental. Calls can be included in this metric, but I prefer to ignore call conversion actions in campaigns because they can be misleading. I use call tracking software to track lead quality separately and manually include relevant data in my reporting.
Bounce Rate
- Percentage of visitors who leave the site after viewing only one page.
- Measurement: (Single-Page Visits / Total Visits) * 100.
- Goal = Lower: A lower bounce rate means visitors are engaging more with your website, indicating a better user experience.
- Considerations: If bounce rate is low but conversion rate is also low, consider if users are exploring but not finding what they need to convert on your website.
Average Position
- Average position where your ad appears in search results.
- Measurement: Average of all ad positions in a given period.
- Goal = Lower: A lower average position number (e.g., 1.5) means your ads are appearing higher up in the search results.
- Considerations: Being in the top position is valuable, but ensure it’s not leading to high costs with a lack of conversions.
Impressions (Absolute Top) %
- Percentage of your impressions that are shown as the very first ad above the organic search results.
- Measurement: (Absolute Top Impressions / Total Impressions) * 100.
- Goal = Higher: A higher percentage indicates that your ads are frequently appearing in the most prominent position, which can increase visibility and clicks.
- Considerations: Top positions are great, but if the clicks aren’t converting, investigate your ad copy and landing page.
Impressions (Top) %
- Percentage of your impressions that are shown above the organic search results.
- Measurement: (Top Impressions / Total Impressions) * 100.
- Goal = Higher: A higher percentage means your ads are often appearing above the organic results, increasing the chances of getting clicked.
- Considerations: High top impressions are beneficial, but ensure they lead to meaningful interactions and conversions.
Search Lost IS (Rank)
- Percentage of impressions lost due to ad rank.
- Measurement: (Lost Impressions due to Rank / Total Eligible Impressions) * 100.
- Goal = Lower: A lower percentage means fewer impressions are being lost due to low ad rank, indicating better overall ad performance.
- Considerations: If this percentage is low but your ads aren’t converting, consider adjusting your ad strategy for better engagement.
Search Lost IS (Budget)
- Percentage of impressions lost due to budget constraints.
- Measurement: (Lost Impressions due to Budget / Total Eligible Impressions) * 100.
- Goal = Lower: A lower percentage indicates that your budget is sufficient to capture more impressions, ensuring better ad visibility.
- Considerations: If the percentage is low but performance isn’t improving, reallocate your budget to more effective campaigns or keywords.
Tracking ROAS
When You Can Track ROAS Natively:
ROAS can be tracked natively within Google Ads if you have proper conversion tracking set up and are tracking revenue from conversions directly. This involves setting up conversion tracking codes on your website that capture the purchase value of each conversion.
When You Can't Track ROAS Natively:
If your business model involves offline conversions or revenue not directly captured through your website, tracking ROAS natively might not be possible. For example, if you generate leads through your website but the actual sales happen offline, you will need to track these manually. This is usually the case for tradies and other service providers that don’t have e-commerce functionality on their website.
Calculating ROAS Manually
To understand how much money you’re making from your Google Ads, follow these steps:
Check Your Conversions in Google Ads:
Look at the number of conversions in your Google Ads account. This tells you how many times someone took an action you care about (like making a purchase or filling out a lead-gen form).Identify Which Leads Came from Those Conversions:
Use your CRM system or a manual method to track which leads came from your Google Ads. This might involve tagging leads or checking referral sources.Calculate the Revenue Generated:
Add up all the revenue from those leads. This could be the total sales amount or the value of each conversion if you offer a service based business model where prices can vary.Gather Your Ad Spend Data:
Find out how much you spent on Google Ads during the same period. This information is available in your Google Ads account under the “Cost” section. If you’re working with an agency or freelance Google Ads expert like me, you might want to look at this spend data including the account management fee.Calculate ROAS (Return On Ad Spend):
Use this simple formula: ROAS = Revenue / Ad Spend.
EG: If you spend $1000 on your Google Ads and generate $5000 in sales, your ROAS would be 5.
ROAS = $5000 / $1000 = $5 for every $1 you spend on your ads!
Measuring and Interpreting Metrics
Google Ads offers tools to help you track your campaign performance. You can see how your ads are doing through various reports and metrics on the platform and through third-party tools like Agency Analytics. These reports include how many people click on your ads (CTR), how much each click costs (CPC), and how many of those clicks turn into sales or leads (CPA).
To get useful data, run your ads for at least two to four weeks before making any changes. This gives enough time to see real patterns. For a good start, I usually aim to optimise ads to get around 30 conversions in a month before diving deep into the specific metrics like CPC and CPA, especially if the overall Return On Ad Spend (ROAS) profitability is at a sustainable level.
Understanding these metrics means looking at trends. For example, if lots of people click your ad but few actually buy or sign up, you might need to improve your landing page. If you’re paying too much for each click, refining your keyword choices can help. Use this information to make smart decisions, like shifting budget to better-performing ads or trying new campaign angles.
Regularly Review Your Google Ads Campaign Metrics
Metrics are invaluable tools that help you make your ads more effective. By adjusting your bids based on metrics like CPA and ROAS, you can achieve significantly better outcomes. It’s crucial to target the right audience and refine your ad content using data from CTR and conversion rates, as this ensures you’re reaching people who are most likely to be interested in your offerings.
Good budget management is essential for any successful campaign. Utilising metrics such as ROAS and CPA ensures that you are spending your money on ads that are truly effective. Regularly checking these metrics helps prevent wasting money on ads that don’t deliver results, ensuring that every dollar spent is working towards your goals.
Tracking performance means consistently monitoring and improving your ads. Setting goals for your key metrics and reviewing them regularly allows you to measure progress accurately. This approach enables you to quickly adapt to changes and continuously test different strategies to find what works best, leading to ongoing improvement and success.
What Are The First Metrics To Improve To Get Better Returns?
There is no one-size-fits-all answer here; it really depends on the specific account metrics and key performance indicators (KPIs) of your Google Ads campaign. It also depends on prioritising the most efficient and impactful areas for improvement. For example, split testing your landing pages might be more straightforward and faster to implement than testing new ad copy, leading to quicker improvements in conversion rates.
If you’re a small business owner running your own ads, one of the best ways to see better returns is by improving your Click-Through Rate (CTR). For example, if you double your CTR from 5% to 10%, you could potentially double your leads if your conversion rate remains the same.
Imagine you’re running a campaign for your fishing charter and currently get 50 clicks from 1,000 impressions, resulting in a 5% CTR. If you increase your CTR to 10%, you would get 100 clicks from the same 1,000 impressions. Assuming your conversion rate stays the same, this would effectively double the number of bookings your campaign generates.
Now, if you then focus on increasing your conversion rate, the results can be even more impressive. Suppose your current conversion rate is 10%, meaning 10 out of 100 clicks turn into bookings. By optimising your landing pages and improving your call-to-actions, you could increase this to 15%.
With your improved CTR generating 100 clicks, a 15% conversion rate would give you 15 bookings instead of the original 5 – tripling your bookings from your initial setup. This combined approach of boosting CTR and conversion rate can significantly enhance your campaign’s effectiveness and overall returns.
Google Ads KPI's
Understanding and effectively using Google Ads data is crucial for optimising your ad campaigns and improving your return on investment. Key performance indicators like CTR, CPC, CPA, and ROAS provide valuable insights into your campaign’s performance and highlight areas for improvement.
By focusing on these indicators, you can make informed decisions that enhance your ad effectiveness and budget efficiency. Regularly reviewing and adjusting your strategies based on this data ensures ongoing success.
Request A Free Google Ads Review Today!
Take advantage of my free marketing review service, which includes a detailed analysis of your Google Ads metrics. This review will provide you with valuable insights and recommendations to help you optimise your campaigns and achieve better results. Contact me today to schedule your free marketing review and start improving your ad performance!
