Paid Search Monitoring Made Simple: 12 KPIs That Matter Most

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Pay-per-click advertising is a valuable investment. Experts predict ad spend in the U.S. will exceed $400 billion by 2028, growing nearly 10% annually. 

Your business can compete effectively in this market, but you need the tools to triumph. Paid search monitoring tracks key performance indicators in an ad campaign to optimize results.

Why Is Paid Search Monitoring Important for Your Ad Campaigns?

Tracking paid search metrics is like taking a blood test at the doctor’s office. What you learn can improve your PPC campaign’s “health” in many ways:

  • Improves ad effectiveness
  • Helps you prioritize keyword terms that deliver results
  • Makes paid search campaigns more flexible
  • Lowers advertising costs
  • Boosts your return on investment

When you have accurate information about how your ads are performing, you can make adjustments quickly or even completely shift gears.

Which Paid Search Metrics Should You Track?

There are dozens of helpful metrics you can track for PPC campaigns. We recommend monitoring the following KPIs. 

1. Quality Score

Quality Score uses a complex algorithm to evaluate how effective your landing pages, keywords, and ads are. A high score means your target audience is likely to click on ads. A low score means you need to improve campaign quality to catch up with competitors.

How can you boost the Quality Score for your ads? Here are a few suggestions:

  • Make your PPC campaign more relevant to users: Make sure the keywords you select and the content on your landing pages match your audience’s search intent.
  • Improve ad quality: Avoid bland, vague, or cookie-cutter ads and create valuable content that helps users, such as lists of features and benefits.
  • Use a CTA to show users where to click: Instead of crowding your landing pages with too much fluff, design them around a clear call to action, such as “Compare Pricing,” “Buy Now,” “Add to Cart,” or “Start Saving.”

The benefits of paid search monitoring are worth the time investment. A good Quality Score can improve your position on SERPs and lower the cost per click.

2. Ad Rank

Bidding for clicks doesn’t automatically mean your ads will show up for your chosen keyword. Google uses Ad Rank to determine which advertisers occupy the first position, second spot, and so on. 

This metric looks at:

  • Your Quality Score
  • Your maximum bid
  • The relevance of your ad to user needs (including the person’s location)

The higher your Ad Rank, the more impressions you get. Put simply, the best ads get even more “airtime” to capture leads, clicks, and sales.

3. Impressions

Impressions are the total number of times Google shows your ad in search results. The top impression rate narrows down this figure to the number of times your ads appeared near the top of the pack. Comparing ad views to clicks, website visits, conversions, and competitor figures gives you valuable insights into your campaign’s overall performance.

4. Click-Through Rate

Your click-through rate shows the percentage of people who click on your ad after seeing it. To calculate CTR, you divide clicks by impressions and multiply by 100. A CTR of 20% means that in the 100 times your ad appeared, it persuaded 20 people to click.

What is a good CTR for paid search monitoring? It depends on your industry, keywords, and audience (B2C or B2B). The average CTR for the travel industry is about 10%, whereas clothing retailers are doing well with 6% to 7%.

5. Conversion Rate

Your campaign’s conversion rate takes things a step further, showing the percentage of people who clicked on your ad and then took action. Common types of conversions include:

  • Filling out a lead form
  • Downloading a whitepaper or infographic
  • Calling or contacting your business
  • Purchasing a product
  • Signing up for a subscription or free trial

Keeping tabs on your conversion rate is vital for paid search monitoring. It helps you separate the results you hope for from the reality of how well your ads are performing.

6. Impression Share

Impression share reveals how often your ads appeared versus how many views they could have received. There are several types of IS:

  • Search impression share
  • Lost impression share (budget)
  • Lost impression share (rank)

Few campaigns have a perfect metric, but your ratio (total impressions divided by potential impressions times 100) helps you know where and how to optimize your ads. For example, a high lost impression share for a budget means you’ve missed valuable opportunities because your bid is too low or you have too much competition.

7. Cost Per Click

This metric shows how much you’re paying for each click in a PPC campaign. The main factors that affect your CPC for keywords are:

  • Your Quality Score
  • Your CTR for the keyword or ad
  • The amount of competition for the keyword

For competitive keywords and audiences, you must be prepared to spend more to grab clicks. In some industries, it’s worth investing in a few high-cost ads that drive the majority of your leads and conversions. For others, you get more overall value by targeting a large volume of niche terms.

8. Cost Per Conversion

Some agencies call this cost per acquisition, but we think cost per conversion is more accurate for paid search monitoring. This metric tells you how much every conversion, sale, or lead costs you with the current campaign. It’s a valuable way to calculate how effective your PPC advertising is and how it stacks up against other digital marketing avenues you’re using.

To find your cost per conversion, divide the total cost of the advertising campaign by the number of conversions it leads to. For example, if you pay $5,000 for a PPC ad and get 250 leads, the cost per conversion is $20.

9. Conversion Value

Another important metric related to conversions is conversion value. This figure is closely related to return on investment. It’s about getting the most bang for your buck in terms of conversions.

Google Ads has a “Maximize conversion value” setting for paid search campaigns. This option adjusts bids automatically to optimize the value of conversions per click.

Cost per conversion and conversion value are two of the most essential paid search metrics for B2B companies. When you compare campaign costs against the customer lifetime value, it’s easier to decide how much your business can afford to spend on client acquisition.

10. Return on Ad Spend

Return on ad spend (ROAS) is a crucial metric for paid search analytics in e-commerce sales. It is the total revenue from advertising minus the cost of your campaign. ROAS helps you create profitable and successful PPC campaigns.

You may discover that certain ads or customer groups generate more revenue than others. It makes sense to shift your advertising strategy to prioritize these profitable opportunities.

11. UTM Tracking Signals

UTM tags can help you improve paid search monitoring significantly. These snippets tell you where your web traffic is coming from:

  • Paid search campaigns
  • Social media ads
  • Social media posts
  • Organic search results
  • Sponsored posts

Keep in mind that managing UTM snippets requires website development experience. Our team can set up performance tracking for landing pages, SEO content, and web pages.

12. Conversion Tracking

Google Ads offers conversion tracking tools that detail the actions a converting user takes. For example, you can see the percentage of people who add items to their carts but leave before checking out. This type of tracking lets you set the parameters to look for, including phone calls, app downloads, subscriptions, and follow-up sales.

How Can You Manage an Effective PPC Campaign?

Paid search campaigns require careful planning and ongoing management to maximize your results and ROI. They’re not something you can “set and forget.” Pay special attention to several factors:

  • Cost and ad spend: Set a realistic budget for PPC ads that take into account CLV (customer lifetime value), competition, and sales opportunities.
  • Conversion goals: Be specific about the results you want from your campaign, such as a 10% increase in landing page lead generation or X amount of sales revenue.
  • Other marketing channels: Balance paid search with other advertising channels, such as SEO and social media.

Our experienced team can help you set targets for your PPC advertising objectives and reach them.

What Are Your KPIs for Paid Search Telling You?

PPC monitoring should be an active process, not a passive one. Watch out for common warning signs:

  • Many clicks but few conversions: Check landing pages for quality issues, such as bland content, long loading times, or layouts that aren’t mobile-friendly.
  • High cost per click: Select less competitive search terms with a precise audience focus, such as long-tail keywords.
  • Good conversion rate but poor sales: Make sure your ads have the right target audience, appeal to the user’s search intent, and include energetic CTAs. 

Use what you learn from A/B testing and paid search analytics to make changes quickly when problems arise.

How Can We Help with Paid Search Monitoring?

At Digital Neighbor, we’re experts in all types of digital marketing, including paid search advertising. Our team can help you find your target audience, set the right goals for your PPC campaign, and keep tabs on the results with paid search monitoring. Contact us to learn more about our world-class services.

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