11 Important PPC KPIs You Should Be Tracking - AdMarketing Titan

Especially for PPC KPIs, it's important to track where the money is going and ensure that every penny counts for the campaign. 

PPC (Pay-Per-Click) is an advertising method where advertisers pay a fee only when one of their ads is clicked. 

Now, there is so much data available at our fingertips for optimizing the campaign but tracking the right PPC metrics is important for boosting the ad performance and getting the best results with the same budget.  


Important-PPC-KPIs


Following the right KPIs helps in making smarter decisions, improving ad performance, and getting the most out of your budget. 

In this article, we are going through 11 important KPIs that are worth tracking during a digital ad campaign. 


Conversion Rate %

Conversion Rate measures the percentage of users who complete the desired action after interacting with the ad. This action might vary from making a purchase to signing up for the newsletter or filling out a contact form. 

For PPC, the conversion rate directly indicates the effectiveness of the ad in catching the attention and persuading users to take the required action.  

A low conversion rate of the ad generally signifies that the ad and the landing page are not relevant and failed to be compelling to the intended audience. 

Calculate the conversion Rate 

Conversion Rate = (Number of Conversions/Number of Clicks) x 100 

For example, if the ad had 20 clicks and the number of conversions is 4, then 

Conversion Rate = (4/20) x 100 = 20% 

According to Highervisibility, the average conversion rate for paid landing pages across all industries is 2.35% in 2024 whereas an e-commerce conversion rate is 2.03%. 


Cost per Acquisition (CPA) 

CPA measures how much it costs, on average, to acquire a customer or lead. 

CPA helps in evaluating the efficiency of the advertising spend. Lower CPA shows that the cost of acquisition of customers is lower, which is profitable in most cases. 

CPA = Total cost divided by number of conversions = Total Cost/Number of Conversions 

For example,  

If the total cost of the campaign was $1000 and the number of conversions was 500. 

Then the CPA comes out to be 2. 

According to Storegrowers, the average CPA of search ads for e-commerce is $45.27. For display ads, the average CPA is $65.80. 


Revenue on Ad Spend (ROAS) 

ROAS measures the effectiveness of advertising by showing how much revenue you generate for every dollar spent on ads. In other words, how much revenue is generated for every dollar spent on advertising. It measures the profitability of the ad campaigns. ROAS provides insights and helps Understand the financial return of the campaigns and whether your advertising budget is being utilized effectively. A ROAS greater than 1 indicates that your advertising is generating more revenue than the cost, implying profitability. ROAS = (Revenue from Ads/Cost of Ads) For example, if the revenue from the ads is $1000 and the cost of ads is $100, then the ROAS comes to be 10. That means for every dollar spent, we got a return of $10. The benchmark for ROAS is set at about 200%. That means, for every dollar spent, $2 is earned.


Cost per Click (CPC) 

Cost per click (CPC) is the average amount of money to be spent each time someone clicks on the advertisement. It directly impacts on the advertising budget management. 

CPC is crucial to help advertisers understand how efficiently their budget is being utilized.  

Lower CPCs mean the advertiser is getting more clicks for the same budget, potentially leading to more conversions if the clicks are relevant. 

CPC = (Total Ad Spend/Number of Clicks) 

For example, if the total ad spend is $1000 and the number of clicks is 750, then the CPC is 1.33. 

Therefore, the cost is $1.33 per click.

According to Business of Apps, the average Google Ads CPC rate for search is $2.69, and for display is $0.63. 


Click-through Rate (CTR) 

Click-through rate (CTR) measures the percentage of users/people who click on the ad after seeing it. This indicates that the ad is relevant and has an appeal in front of your audience. 

A higher CTR means the advertisement resonates well with the audience that has been selected, resulting in driving traffic to the website or landing page.  

This possibly leads to increased conversions and better campaign performance and revenue. 

CTR = (Number of Clicks/Number of Impressions) x 100 

According to JanBask Digital Design, a good CTR typically ranges from 3% to 5% (top position) for search ads, whereas 1% to 2% for lower positions. 

In social ads, mainly spending in Meta platforms Facebook and Instagram has a CTR around 1.1-1.3%, according to Databox. 


Impression Share %

Impression Share represents the percentage of times the ads are displayed out of the total opportunities they had to appear in the search results or on a website. 

It helps in understanding how effectively the ads are performing relative to the potential reach.  

If impressions share is low, this could indicate there are missed opportunities to reach your target audience. Consider increasing the bids or budget. 

Also, these could show that there is high competition and may require more aggressive bidding strategies or budget allocation. 

Impression Share = (Actual Impressions/Total Eligible Impressions) x 100 

An impression share of 100% means the advertiser is getting the entire volume of traffic to see the advertisements. 


Quality Score 

Quality Score is Google’s rating that assesses the relevance and usefulness of the PPC ads as well as keywords. It is influenced by factors like keyword relevance, landing page quality, and CTR. 

To improve the Quality Score, it's important to refine the keyword selection, create relevant copy, optimize landing pages, and increase CTR through targeted ad campaigns. 

A higher Quality Score helps ads getting rank better and reduces CPC to achieve better ROI from your advertising budget. 

Read more about Quality Score on the SEMRush blog.


Clicks

Clicks refer to the number of times users have clicked on an advertiser’s ads after seeing them displayed. 

Clicks directly measure the engagement level of the ads. They indicate how effective the ad copy, targeting, and overall campaign strategy are in driving traffic to the website or landing page. 

Adding UTM parameters to the URLs can help in tracking clicks from various campaigns more effectively. UTM parameters capture details such as the source, medium, and specific campaign name. This allows for providing granular insights to analyze traffic from different ads more effectively. 


Source and Conversions 

Tracking the source of conversions involves identifying and measuring how effectively different channels, such as search engines, social media, email, and direct traffic, contribute to generating conversions.

Understanding the source of conversions helps marketers allocate resources effectively across different channels. It provides insights into which channels are driving the most valuable traffic and which ones may need optimization. 

Attribution models such as first click, and last click can help properly credit each channel’s contribution to conversions. 

Sources can also be used to optimize strategies, improve targeting, and enhance messaging to better resonate with the audience across channels. 


Average Position 

The average position of the advertisement in relation to other adverts on a webpage or in search engine results is shown as the Average Position. 

Understanding your average position is essential because ads at the top of the page get more clicks and impressions. A good placement means higher visibility, increased traffic, and better chances of converting clicks into customers. 

Average Position tells you how big an advertisement is in comparison to competitors. Better visibility and maybe greater click-through rates (CTRs) are often indicated by a higher average position. 


Impressions 

The quantity of times a user sees your advertisement on a website or in search engine results is measured in impressions. 

Impressions show how visible and effective the advertising campaigns are. They display the likelihood that the target demographic will view the advertisement, which is important for exposure and brand awareness. 

Impressions help in understanding the potential audience exposure and the effectiveness of the targeting. 

It also helps in comparing different results across different campaigns to identify the better-performing advertisement.


 

Conclusion 

Monitoring key performance indicators (KPIs) in your pay-per-click (PPC) campaigns is essential to optimizing their effectiveness and accomplishing your marketing objectives. Metrics like Quality Score, Click-through Rate (CTR), Conversion Rate, and Cost per Acquisition (CPA) can be used to optimize budget allocation, increase total ROI, and provide insightful information about campaign performance.  

Apart from this blog post, there is another important blog post you should read about 6 Most Important PPC KPIs You Should Be Tracking. 

 

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