Key Performance Indicators (KPI)

Key Performance Indicators, also known as KPI represent the tool for evaluation of the performance for an ad campaign.

In PPC Campaigns you can use KPIs to determine the success of the campaign.

1. Click-through rate (CTR)

Click-through rate is a report that shows the frequency with which the user clicked on an ad after seeing it.

Click-through rate is calculated by dividing the number of clicks received by an ad by the number of times it is displayed. For example, if you had 7 clicks per 1000 impressions, the CTR is 0.7%.

The performance of PPC campaigns varies by industry.

For example, WordStream analyzed PPC’s performance in over 2,000 US businesses and found that the CTR in search was 2.14% in the automotive industry and 3.40% in the dating industry.

Measuring and improving click-through rate (CTR) is very important not only to measure the success of a campaign but because CTR can affect other KPIs.

2. Clicks

All conversions start with a click and for this reason clicks are a key success story of PPC campaigns.

This performance indicator measures how many people clicked on your ad.

Clicks are an indicator for mid-month verification of campaign status by campaign managers.

3. Quality Score

Quality score is the most difficult to spot KPI among PPC campaigns.

Quality Score gives you an overview of the quality of your ads. This score has values from 1 to 10.

The Quality Score is based on 3 factors:

  • relevance of ads
  • estimated click-through rate
  • landing page experience

A good quality score is between 7 and 10 and means you will pay less for AdWords ads. A poor quality score is less than 6 and brings with it the rising cost of the campaign to get the desired result.

Pay Per Click campaign managers are very interested in this quality score because it determines how much they pay for each click.

4.  Cost Per Click (CPC)

PPC advertisers know from the very beginning what the budget is. However, even if they have a set budget and a set-up budget set in the beginning, this does not necessarily mean that they will pay for the results in exactly that way.

The cost per click measures how much an advertiser will pay. The CPC can be measured by dividing the total cost of the campaign by the number of times the ad was clicked.

5. Cost Per Acquisition (CPA)

Google defines the average CPA as the amount paid by advertisers for each newly acquired customer. This cost is calculated by dividing the total cost of conversions by the number of conversions. Click on the creative.

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