How to define KPI’s for Google AdWords
Google AdWords (now Google Ads) is a powerful tool to give a boost to your business. By using this tool effectively, you can generate immense traffic to your website. To do so you need to choose the keywords smartly and use them for giving a kick start to your business.
One of the factors that play a vital role in the successful advertising of your business is Key Performance Indicator abbreviated as KPI. KPI measures the growth or checks if the set agenda has been met. KPIs are used in organizations to evaluate the performance but in digital marketing strategy, it is the most important term.
Advertisers need to evaluate if their money spent is justifying the cause. They need to set a goal and then see if it’s been met within a stipulated time. To serve this purpose, they need to use KPIs in Google AdWords. Now the question arises how can they define KPIs for Google AdWords? Here are some ways to do this:
This metrics translate into the number of people targeted by your ad. It also shows the reach your ad has among masses. To manage the set agenda for KPI you need to keep an eye on impressions. The more people get to see the ad more are the chances of success.
Click-through Rate (CTR)
Click-Through Rate is necessary to track how well your campaign performed. It indicates the number of clicks your website gets after being shown to the audience. Not only does it keep track of your campaigns, but it also increases quality score. It is measured by dividing the total number of clicks by ad impressions. Higher CTR signifies higher performance of your ad.
Quality Score (QS)
The Quality Score of a keyword is its relevance of your ad to a category. It determines your cost per click, an average position as it is the grading criteria set by Google. A higher QS both reduces cost per click and raises the position. Quality score can be improved by improving landing page quality, keyword relevance, and landing page relevance.
Your Google ads require you to have a sound understanding regarding comprehensive keyword search and search intent. That’s how you regulate the keyword performance of your site. Metrics that need your regulation include the quality score of your keywords, CTR, and clicks. You can set up a negative keyword list to avoid any glitches because of irrelevant keywords. You have many ways to control your audience.
Cost per Click (CPC)
Cost per click is also known as cost per conversion. It gives you an estimate of the price you need to spend on PPC campaigns. It is calculated by dividing the total payment of campaign by the total number of clicks. It determines the budget that the marketing department needs to allocate for the campaign.
The conversion rate is the number of persons converting to customers after visiting the page. This is where the companies earn money from. It is such a crucial step as the advertisers have a few seconds to grab the attention of the visitor. This can be increased by setting up appropriate goals depending on the industry and targeted audience. An efficient website that lands to the relevant page also increases the conversion rate.
Cost per Acquisition (CPA)
The price paid as a result of each acquisition is termed as Price per Acquisition. Out of all, this is the most important Google Ads metrics. It is calculated as cost of conversion divided by the total number of conversions. This KPI is indicative of the ROI generated by your campaigns but it varies across different niches.
The average position shows that at what position does your ad lies when it is triggered. A higher position indicated by a smaller digit signifies its top position and vice versa. A higher position simply means greater traffic generated to your website.
The above mentioned KPIs defined for Google AdWords, lead to effective and strategic digital marketing.