Sixty-five percent of all clicks made by users who intend to make a purchase go online and click on Google Ads. Google Ads drives leads and in today’s article, How To Measure Google Ads Performance, I am going to show you how to measure Google Ads performance.
Watch the video version of this article below:
How To Measure Google Ads Performance [TRACK PHONE CALLS]
You may be one of those people who run Google Ads and is worried about the lack of performance you get for your campaigns. There are a lot of numbers in the Google Ads dashboard that you can check for extensive reports.
While these numbers are good data for you, you can get hung up and get stuck on these information, which oftentimes leave you confused on what to track.
Like for example the click through rate and CPS. These are both important but they are also vanity numbers.
The bottom line of measuring Google Ads performance is what’s costing you to acquire a new customer and how much revenue you’re generating. Once you know these data, you can easily scale your campaign.
3 Google Ads data to watch for better campaign and conversion
There are 3 things that matter the most:
- conversion rate
- cost per conversion
Let me explain why:
You cannot measure the conversion number unless you’ve done a good setup of your goals and you told Google what a conversion means to you.
There are so many types of conversion. In Google, a conversion could mean a newsletter sign up, a phone call coming in from a Google ad, or it could be a form to fill-up.
When it comes to setting up your conversions, have a good and clean conversion methodologies, where you’re telling them specifically what a conversion is.
For example, your intent is leads, then the only conversions that should ever be measured under the conversion event actions should be form fills for example or phone calls or however you preferred they get in touch with you.
Let’s say that our conversions are actually leads. So if you had 500 visitors and then 25 of those contacted you, that’s a conversion. You would have a total of 25 conversions. If 500 visitors, 48 opted in that’s 48. If you had 500 visitors 89 called you that’s 89 conversions. All these depend on what your conversion measurement is.
The conversion rate is a number that we can test things in the account. We can see this start to increase, and you can make a huge difference in profitability by knowing this number.
To get the conversion rate, you divide the conversions by the number of visitors. Let’s say for example, you had 950 visitors 60 of them converted, so the conversion rate is 13. Once you understand your baseline, you can go in and you can start tweaking your ads.
By tweaking, I recommend you run an ad group, which targets a specific audience like in-market or intent-based audience. Then compare these to see how they’re converting against each other. Have a look at your ads and see if your headlines or calls to action converts well.
Make sure that you always separate the ad groups. You can’t test them if they’re bundled into one. For example, you want to test your targeting. What you do is if you’ve got one ad, which is a demographic and one ad, which is an interest. This are two separate ad groups that you run and you watch the conversion rates for these two ads.
It is always good to test one at a time and focus well on targeting. This will help you get your targeting number in line.
Once your targeting number is doing well and you got your winning campaign, you can then start to optimize, perform, and find which one performs well as far as your ads are converting.
CPA/Cost per conversion
Let us say, you’ve got a thousand clicks and your CPS (click per sale) is $2.50 and 45% confirmed, so you have a $50 CPA.
What I always do is I take a look at the lifetime value of a customer, and not the one time worth. For example, the lifetime value is say $600. This means, it’s costing you $50 to acquire lead and for every 4 leads, you’re able to convert these into a customer. That’s $220 to generate a $600 revenue on that customer.
Always know those numbers because when you keep an eye on your CPAs, you will have absolute success in monitoring and measuring the success of a campaign.
A lot of ad managers are watching the CPC (cost per click) and this is a mistake. For example a $10 CPC vs $40 CPC. You would think that the $40 is four times more expensive and you don’t want that. However, it’s a very good high-quality term. The conversion rate is high but your CPA is only $55.
On the other hand, the $10 CPC might have a much much lower conversion rate and it could cost you $80, for example.
These are 3 primary numbers that you should always keep an eye on when it comes to conversions. Keep an eye on your conversion, conversion rate and your CPA and optimize your ads based on these data. You should be able to run a successful campaign.