PPC Google Adwords Metrics

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Top Pay Per Click Metrics to understand, remember and expertise in Account Optimization

Top Pay Per Click Metrics to understand, remember and expertise in Account Optimization

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  • 1. PPC Metrics Let us look at the definitions for the major PPC metrics that are different from Google Analytics metrics.  Click  Impression  Cost  Click Through Rate (CTR)  Maximum Cost-per-click (Max. CPC)  Average Cost-per-click (Avg. CPC)  Actual Cost-per-click (Actual CPC)  Cost-per-thousand-impressions (CPM)  Impression Share  Conversion  Conversion Rate  Cost-per-action (CPA)  Earnings Per Click (EPC)  Profit  Return on Investment (ROI)  Keyword Match Type  Quality Score Click A Click is a user action when the user clicks on a PPC ad. Impression Impression is the number of times your ad is displayed to the target audience. When your PPC ad is shown, an impression is counted. Impressions are measured differently for Google Instant. Cost Cost is the actual advertising amount that you spend on your PPC campaigns or ad groups or ads or keywords. In PPC (pay-per-click) auction systems, cost is incurred when a user clicks on an advertiser’s ad. Click Through Rate (CTR) Click through rate (CTR) is the number of clicks your ad receives over the number of impressions within a specific period of time. CTR (%) = Clicks / Impressions
  • 2. Maximum Cost-per-click (Max. CPC) Maximum CPC bid is the highest bidding amount you set at the keyword level or ad group level for the keyword or ad that you are willing to pay for a click on your ad. Average Cost-per-click (Avg. CPC) Average cost-per-click is the cost of all clicks over the number of clicks received by your ad. Average CPC is different to maximum CPC. Actual Cost-per-click (Actual CPC) Actual CPC is the minimum required bid for your ad to stay one position above the ad immediately below in a PPC search ad auction and is how much you actually pay for your ad’s click (with no more than the maximum bid you specify for your ad group or keyword). Actual cost-per-click is determined by this formula: Actual CPC = (Ad Rank to beat / Quality Score) + USD 0.01 Cost-per-thousand-impressions (CPM) CPM means cost-per-thousand-impressions which is an advertising metric mostly used in display ad campaigns. Impression Share Impression share is a metric that represents the share of all impressions an ad acquired against other ads that are competing for the impressions. Conversion A conversion is a user action that takes place on your website, including a purchase, sign- up, lead or pageview. PPC auction systems offers tools to measure conversions:  Adwords conversion tracking – Default conversion tracking tool in Adwords  Adcenter conversion tracking – Bing Adcenter’s built-in conversion tracking tool  Yahoo Search Marketing conversion tracking – Built-in conversion tracking feature for Yahoo PPC  Baidu PPC conversion tracking – Baidu Phoenix Nest’s official conversion tracking tool Google Analytics allows you to track your site’s conversions with this basic Google Analytics PPC Conversion tracking Conversion Rate Conversion rate is the number of conversions through your ad over the number of times that your ad is clicked. Conversion Rate (%) = Conversions x Click
  • 3. Cost-per-action (CPA) Cost-per-action (CPA) measures the effectiveness of your ad based on actions taken by your site’s visitors. An action on a site can be defined as a purchase, sign-up, lead or pageview. CPA = Cost / Action Action = purchase or sign-up or lead or pageview or any other pre-defined action Earnings Per Click (EPC) EPC is the amount your PPC advertising earns from each click. EPC = Revenue / Click Profit Profit refers to the dollar amount earned after taking cost into account or is revenue less cost. Profit = Revenue - Cost Return on Investment (ROI) ROI measures how much profit you make from each marketing dollar you spend on your PPC ads. ROI (%) = (Revenue / Cost) - 1 Keyword Match Type PPC auction systems allow you to control who sees your search ads with keyword match types:  Broad match  Phrase match  Exact match  Negative match Quality Score Quality score is a factor that determines your ad’s ranking in the PPC search ad auction systems. For example, Google Adwords Quality Score is calculated by factors including CTR of keywords, ads and PPC account.