Measuring your paid search performance is critical to business success. Paid search enables you to capture demand for your products or services via high-intent searches. Knowing whether your campaigns are performing well is key to ongoing success. However, many factors must be considered to decide where to allocate your budget and whether you can efficiently scale your campaigns further. This blog will take you through the metrics that help you understand whether your campaigns meet your KPIs.
Beyond Clicks and CTRs: The Paid Media KPIs That Actually Matter
Impression Share
This metric will help you better understand the size of the market you operate in. It enables you to understand how much your campaigns can scale and the intensity of the competition on your chosen keywords.
Impression share is calculated as a percentage and showcases the share of the impressions you appeared for versus the total number of impressions that took place for which you were eligible to appear. There are two other supporting metrics to impression share:
- Impression share lost due to insufficient budget
- Impression share lost due to poor rank.
Impression share lost due to insufficient budget is self-explanatory whereas, impression share lost due to poor rank is related to many factors, including:
- Ad relevance,
- Expected CTR,
- Landing page experience and
- Your bid
Your impression share lost to rank can be overcome by improving your quality score. This can be done by improving the relevancy of your ad copy, adding relevant ad assets (f.k.a. Ad extensions) or making your bids more aggressive. Improving the web experience can be achieved by testing different landing pages and working through Google’s PageSpeed Insights audit results for your website.
It should be noted that due to competition and Google’s algorithm, it is unlikely you’ll be able to obtain 100% impression share whilst remaining profitable.
If you only appear for a small number of searches, your impression share may appear as <9.99%. To get a greater representation of your impression share, you can use the following formula to create a custom column:
1 – (impression share lost to rank + impression share lost to budget)
Creating a custom column for estimated search volume is useful. As it allows you to:
- Get a sense of how big your market is
- Understand whether the search volume is growing or shrinking over time
- Better understand any seasonality in the search behaviour
This custom column uses your impressions and impression share data to estimate the number of searches that took place during a given time. It should be noted that this only applies at the campaign level, and any changes in keyword match type will affect how the data appears.
Impressions / (1 – (impression share lost to rank + impression share lost to budget))
Click-Through Rate (CTR)
and Click Share
Historically, advertisers used to assume that the bigger the CTR, the better the ad was performing. However, looking at CTR in isolation is misleading, as it doesn’t consider the propensity of a particular audience to click on an ad.
Furthermore, it doesn’t consider differences between brand versus generic searches. For example, brand searches typically result in higher CTRs than generic searches. To get a greater sense of how well your ads resonate with your audience, you need to use impression share and click share alongside Click-Through rate.
Click share is the percentage of clicks your ad received from the number of clicks it was eligible for. If the click share of the ad is roughly in line with the impression share, it indicates that your ad is resonating well with your audience, regardless of its CTR.
The table below shows what conclusions you can draw by comparing CTR and click share:
High CTR | Low CTR | |
Click Share In-line/Above Impression Share | High audience propensity to click on an ad / ad copy resonating well | Low audience propensity to click on an ad / high competition |
Click Share Below Impression Share | High competition & audience propensity to click on an ad | High competition / poor ad copy |
It is also important to cross-reference the above table with where your ads appear in the search engine results page (SERP) by looking at your impression share absolute top and top rates. Your impression share absolute top rate is the rate at which your ad appeared in the first position of the results, and the impression share top rate is the rate at which your ad appeared above the organic listings on the results page.
If your impression share absolute top rate or impression share top rate is low, that indicates you’re not appearing in premium positions on the results pages, which will negatively impact CTR and click share. To combat poor positions in the SERP, test different bid strategies to improve your position on the results page, alongside improving your quality score.
Return On Ad Spend (ROAS)/Customer Acquisition Cost (CAC)
Whilst optimising towards ROAS or CAC is usual, it is key to fully interrogate your average customer lifetime value based on demographic information or products bought to understand what’s profitable to you.
Optimising towards an initial profitable sale seems logical if you have strong customer retention and repeat purchases. However, you can scale more quickly and be more aggressive by dropping your ROAS targets or increasing your Cost Per Conversion targets. This will help you to increase your market share and grow your customer base.
The other element to consider is that ROAS and CAC aren’t necessarily the holy grail, and understanding your customers is key. Furthermore, bottom-of-the-funnel activity such as paid search and shopping, will eventually reach diminishing returns due to limited demand and prior brand familiarity. Eventually, you’re going to have to introduce more brand awareness tactics to build the trust, familiarity and salience of your brand to potential customers.
Conclusion
If you’re looking at PPC KPIs in isolation, you’re missing the bigger picture of your activity. However, by understanding your marketplace and your customers in more detail by analysing multiple KPIs in unison, you gain a better understanding of how you’re performing against your competition and you can, in turn, make more proactive and informed decisions on your PPC activity.
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