paid advertising metrics

When you do paid advertising, a lot of emphasis is on the results. Clicks, conversions, sales, revenue, and profits. Focusing only on those primary numbers tends to blind you to many other paid advertising metrics that you’ll probably not consider as much.

Narrow focus of any sort, on any set of metrics, is a bad idea.

Whether you use Facebook ads or Google Adwords or other paid advertising methods (such as banner ads on Google Display Network, retargeting on GDN, or mobile advertising), there are only a few numbers that matter.

paid advertising metrics

The metrics you pay attention to will force you make certain decisions which will inturn affect your campaigns.

What kind of paid advertising metrics that you track to will also depend on objectives. As Caroline of Retargeter writes, when your objective is purely branding and reach, any number of clicks on a regular display ad (or lack of clicks) won’t matter.

Pay attention to the wrong numbers and you’d be wasting time or there’s an opportunity cost for that.

In paid advertising, you have support metrics and you have “conversion-centric” metrics. Support metrics give you a wealth of information about a wide variety of things but they are all like signposts trying to guide you towards even more relevant conversion metrics – the final set of numbers that show you actual results.

Most businesses end up looking at all kinds of “support” metrics leaving conversion metrics aside. Or they end up watching only the numbers that matter and not pay attention to support metrics which help you make better decisions overall.

Here are some important metrics that you should be looking at then make the right decisions:

Traffic-focused Metrics

Traffic metricsPlatforms like Google Adwords are especially terrific since they have all the data on traffic-focused metrics when you run your ad campaigns. Such metrics are…

  • Impressions,
  • Clicks,
  • CTR (Click through rate),
  • Average CTR (Average Click through rate),
  • …and others.

These metrics give you a holistic view of how your campaigns are performing, how attractive and relevant your ads are, how many clicks your ads get, what’s the ratio of how many times your ad appears on search versus how many people click, and more.

Some businesses are ultra-focused on traffic metrics to the point that all that they care about is about visitors.

Traffic has no relevance to your campaigns if it’s not targeted traffic (thankfully, if you target your ads well enough, Google AdWords does a fairly good job of showing ads only to those who are potentially interested in your products or service).

To bridge the gap between complex tools and your need to know what your marketing data really means we created Statly. Statly is an easy-to-install tool that will track important traffic data and produce reports with strategic insight. What’s more, Statly, which is free to try, gives you the ability to visualize complete sales funnels, so you you know which campaigns convert better, i.e. bring in sales.

Beyond getting people to arrive on your landing page, these metrics don’t completely help. Once your ads are clicked on, other sets of metrics take over.

Cost-based metrics

Advertising cost metricsSince a startling 98% of all ad spend is a colossal waste of money, it only makes sense to watch out for your campaign costs.

Rising campaign costs are not always a result of bad paid ads management – you can also expect certain external factors (which you have no control over) such as increasing competition, higher cost per click for given keywords in certain markets, whether or not your products are seasonal, etc.

Cost-based metrics in AdWords are usually…

  • CPC (Cost per click),
  • CPM (cost per thousand impressions),
  • Average Cost Per Click,
  • Cost per conversions,
  • Average Cost per Conversion,
  • Target cost per acquisition,
  • …and others.

Looking at cost trends over time helps you get a better idea of how your money is being spent. It also gives you a more realistic base to calculate your ROI too.

With Google Adwords, however, cost isn’t the only thing you’d worry about. Just focusing on “how much you spend” is only half the story.

Performance metrics

Advertising performance metrics Are you making money off your campaigns or not? The answers to this question depend on your performance metrics.

Starting with platform-specific metrics (such as Quality Score for Adwords), performance metrics are usually…

  • Conversions,
  • Sales,
  • CPA (Cost per acquisition or sale),
  • Marketing ROI, and
  • Revenue.

Your conversion “count” marks the number of leads you get off your campaigns, for instance. If you mark only “sales‘ as conversions and not leads, then conversions can also carry the average sale amount showing you accurate numbers on sales and more.

Conversion-focused metrics are right up there in the hierarchy of importance while traffic-focused metrics and cost-focused metrics are the “supporting” metrics.

But performance doesn’t just end with the conversion numbers coming in, as Jacob Baadsgaard writes.

Keeping an eye on these paid advertising metrics let you know how relevant, attractive, attention-grabbing, and profit-pulling your ads are.

When you are working with metrics for your paid advertising, don’t focus completely on one set of metrics only to ignore the others. You’d need to focus on all the metrics to make sure your paid campaigns deliver.

What are you paying attention to when you run your paid campaigns?

Join us for a free online workshop, where we discuss:

  • How to use website data to make the right decisions.
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  • How to make the most out of your current traffic, without increasing paid advertising.
  • How to find and focus on the content that is influencing conversions.
  • …and so much more!

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