How PPC performance metrics are analyzed

Discover how to properly analyze PPC data to match advertising results with corporate goals and open up new business prospects.

Success with PPC requires more than just starting campaigns; it also requires knowing and evaluating the appropriate performance indicators.

You may make well-informed decisions that improve outcomes and support your corporate objectives by understanding which data pieces to prioritize and how to interpret them.

From basic to complex, this article explains the essential metrics you should track and demonstrates how to utilize them to gauge and enhance your PPC success.

How PPC changed the analytics of advertising

One of the most intriguing aspects of digital advertising at the outset was its capacity to provide accurate data measurement, which was absent from traditional marketing. PPC allows you to monitor everything:

• The number of visitors to your website.
• How many clicked on or watched your advertisement?
• Even the precise search phrases they employed to locate it.

This was groundbreaking because it provided advertisers with previously unheard-of insights into the behaviour of their audience.

PPC went beyond simple analytics by introducing conversion tracking, which gave marketers the ability to know the precise return on investment for every ad. This degree of reporting and attribution was revolutionary when contrasted with early banner ads or traditional advertising.

In addition to providing data, PPC made it possible to delve deeply into audience demographics, ad performance, and the customer experience in ways that had never been possible before. Advertisers might predict more accurately, identify trends early, and learn a lot about their rivals. Similar to AI today, PPC upended the market and had advertisers adjust to this new data-driven environment.

But simply having access to all of this information is insufficient. Effective comprehension and interpretation are essential for success. Knowing what to search for and why is just as important as obtaining the facts.

Having all the knowledge in the world is meaningless without the background and ability to understand it, much like the Three-Eyed Raven in “Game of Thrones.” Only then can you transform ideas into tactics that are both meaningful and practical.

Reporting

Because it frequently connects to the main business and account objectives, context is essential.

PPC data reporting on a weekly, monthly, and quarterly basis should be in line with the objectives of each client. Although it can appear apparent, this isn’t always the case.

Establishing a reporting system that is suited to various stakeholders is crucial because the term “performance metrics” might change greatly among clients.

Whether using a reporting template from Swydo or Report Garden, this guarantees you have the analytical basis required to satisfy customer expectations.

A real-time Looker Studio performance dashboard (or other real-time dashboards) that allows clients to modify date ranges and view their own reporting without having to wait for predetermined intervals is what I personally like.

In addition to offering instant insights, this method enables the integration of data from platforms other than PPC, like Shopify, Magento, WooCommerce, and GA4.

By doing this, you may produce a more thorough perspective that provides more context than merely advertising effectiveness.

Essential PPC metrics

The bread-and-butter metrics must be taken into consideration before moving on to more complex indicators. These form the basis of any performance analysis and are the main data points you examine during your daily checks.

Since these indicators are simple to understand and have more characteristics with traditional metrics than the more sophisticated data, many clients give them priority—some may even obsess over them. Furthermore, the advanced measures you look at later will be built upon these foundational indicators.

A brief illustration of basic metrics would be:

•  Impressions: The number of individuals who have seen your advertisements.
• Clicks: The number of individuals that have clicked on your advertisement.
• CPC, or average cost per click, is Clicks per cost.
• Clicks divided by impressions are the click-through rate or CTR.
• The number of people that have visited your website in a unique session.
• The amount of money made from a sale is known as the conversion value.

The majority of the simple PPC reports I’ve seen are based on the aforementioned criteria.

With just a small amount of coding required to provide conversion monitoring for conversion value, Google usually offers these data natively. Since it is crucial for performance analysis, I continue to think of this as fundamental.

To increase campaign effectiveness, your advertising goal should be to increase the click-through rate of your advertisements and make them more interesting.

You may then scale performance by increasing the quantity of impressions and clicks. Additionally, try to lower the average cost per click (CPC), which should allow you to get more traffic for your money, especially if you’re using display advertisements.

They have a function and should be examined first, particularly when determining if a campaign is disrupted. Here are a few instances:

• Every day clicks on Performance Max advertising are down 75%—feed problems.
• Every day clicks on Performance Max advertisements are 100% up. Increase in the dispersion of display channels.
• Does the brand campaign’s average CPC increase by 25% per month? a few recently entered rivals vying for your brand’s keywords.
• CTR declining by 20% per month? The new keywords don’t have enough relevance.

Ultimately, however, it will be impossible to determine whether your key objectives are being accomplished by analyzing all the basic data separately.

Just keep in mind that the next time a client asks why clicks are down 10% year over year or why CTR is down 15%, they should emphasize that POAS is up 25% and LTV to 15%.

These measures have a direct connection to the company’s goals, including saving money on advertising during a year with more difficult market circumstances and fewer prospects for expansion. Advanced metrics for PPC
A couple of the advanced metrics I mentioned above are as follows:

• Advertising cost divided by conversion value is known as return on ad spend, or ROAS.
• Gross profit: The sum of your earnings from every sale.
• Advertising expenses divided by gross profit are known as profit on ad spend or POAS.
• Lifetime value (LTV): The mean worth of every user who buys something.
• Acquisition of new users: The number of new clients attracted.
• Returning user percentage: The percentage of people who visit your website again.
• Brand recall is the percentage of respondents to a survey who can recall your brand.

All of the aforementioned points can be connected to a single company goal, which can subsequently be converted into advertising objectives.

Some metrics are harder to get than others. For example, Google’s brand lift measurement demands a minimum of $5,000 spent on YouTube advertising over 10 days merely to ask one question.

However, for pertinent performance analysis, only the right measures are required.

You must move from using only Google platform data to using a variety of other platforms for a more comprehensive perspective to improve your performance analysis.

Google Analytics 4 is an additional tool, but for more in-depth information, you may also employ third-party attribution or management software such as Triple Whale, Profit Metrics, SMEC, and Optmyzr.

Although not always required, this becomes a useful choice if your account is sizable and performance analysis is a frequent and cooperative activity that the client values, particularly if Google data isn’t reliable.

For example, Google now keeps track of the account’s lifetime worth. It might take some time to develop precise customer value data, though, if tracking was just recently implemented. In these situations, more comprehensive and mature data from other platforms might be used in its place.

Advertising goal = business goal

Finding and assessing LTV and acquiring new users will be crucial if growing the clientele is one of the advertising goals.

Since precise data is essential, many people explore beyond Google tracking. When your data is reliable, whether for reporting or optimization, it performs analysis in the context it needs.

Metrics like conversion value and ROAS lose significance, for instance, if a customer’s LTV is approximately $5,000 and the focus is on gaining new clients.

A campaign that solely focuses on acquiring new users may have a 100% return on investment (ROAS), which seems unimpressive at first since you’ve only made the same amount of money as you spent.

However, when calculating the customer’s future purchases, your actual ROAS is closer to 1,000% with an average order value of $500 and an LTV of $5,000.

Together with exact new user acquisition statistics, an accurate LTV evaluation aids in the accomplishment of your campaign’s goals. It also aids in determining a target “New User ROAS” that you can evaluate and improve at the campaign level regularly.

Metrics like conversion value and ROAS lose significance during performance assessments if the client’s top goal is profit.

The client’s margins are extremely low, and they lose money with a 75% POAS (where 100% is break-even), even though your campaign produced a 1,000% ROAS (as in the case above). On the other hand, a different campaign might provide a 500% ROAS, but the POAS is only 150% because the products have higher margins.

Without context, an account analysis would suggest giving the first campaign a larger budget because it doubled the return on assets.

Given its twofold POAS, the second campaign would be deemed to have the biggest growth potential when considering the business purpose.

Increase the significance of your PPC performance analysis.

The goals must always be the primary focus of PPC performance analysis and reporting.

Although foundational metrics are crucial, companies and clients frequently obsess over them when having performance conversations. Advanced measures that more clearly demonstrate if the advertising channel is accomplishing its objectives should take centre stage instead.

Clicks, impressions, and average CPC take too much attention away from what counts. Campaign management may also be impacted, running the risk of priorities becoming out of alignment and performance slipping.

The account manager is in charge of directing clients toward the important KPIs.

Create dashboards and reports based on pertinent KPIs that help with in-depth analysis of the account, campaigns, goods, and services and reinforce the performance story.

This strategy will assist you in identifying patterns, problems, chances, and insights that will set you up for long-term success.