Marketing - 8 min read

Google Ads reporting & performance metrics for better ROI

Posted  |  Written by David Ligtenberg

Are Your Google Ads Campaigns Achieving Results… Really???

With so many websites out there all competing for the same traffic. This is where Google Ads can become an invaluable tool. That said, a tool is only as good as the person controlling it. When it comes to digital marketing, there is a lot of misinformation out there which has led to a lot of people believing that they are getting some great results.

“If you build it… you may still need Google AdWords.”
– Jennifer Mesenbrink

This is particularly true because Google Ads provides one of the most measurable channels of marketing available. We need to understand how to interpret the information Google Ads provides to see how well our campaigns are performing. However, looking at your online ads performance alone can be a little deceptive, it needs to be measured against an external metric, like the cost of a single conversion.

Before we discuss how to measure the cost of conversion if you're not getting enough leads then our free swipe file - The Lead Generation Black Book, will show the tactics you need to use to improve your conversion rates. 

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For easy measurability, calculate what a single conversion is worth in terms of cost and profitability. This ascertains if the Cost Per Acquisition (CPA) in Google Ads is of value, or if it is eating too much into profit margins.

When it comes to Google Ads, there are a number of metrics to consider. These measurements will help you as the business owner or marketing manager determine how the overall campaign is going and how to improve the cost per acquisition.

Utilising the Google Ads metrics shows current and past performance. This data can highlight improvements to be implemented in the following areas;

  1. Increase traffic to the website
  2. Optimise the landing pages
  3. Improve the conversion rate
  4. Reduce spend waste

Doing the above will reduce the CPA, which in turn improves Return On Investment (ROI).

1. Increase Traffic to the Website

If you were advertising on a billboard, where would you want the billboard positioned, close to the CBD or out on some back road? The answer is simple, close to the CBD so that the billboard is viewed by more people - it’s a numbers game. The same applies to your website, getting more traffic to the site is a vital aspect to enhancing results. To achieve this there are several measurements that should be reviewed. These are:

Keywords: Keyword research is fundamental to ensure that our ads display when someone does a Google search for our product or service. Do keyword research, see what keywords competitors are using and start planning from there. Please note, the Google Ads structure employed is significant and can influence results, but that is another article entirely.

Ads: There are a number of ad formats available. The most commonly used is the text ad, which has 2 headlines at 30 characters each, and a description of 80 characters. Ads have a number of variables and extensions that also come into play.

Google recommends having at least 3 ads in place. There is good reason for this, it allows for ads to be compared and tested against each other. Always look to tweak and improve the poorest performing ad regularly. The important thing is that our Ad Copy includes the keywords in the headline and a strong call to action to encourage the audience to take the next step. Ad extensions can assist ads in standing out and provides other channels for interaction, including phone numbers - which trackable.

Please note that keywords and ads are not major metrics, but are the basic building blocks of any Google Ads campaign. Getting this aspect of Google Ads right is imperative if the following metrics are to have any real value.

Clicks and CTR: Clicks are exactly that, how many times an ad or keyword have been clicked. This can be a great indicator of which keywords or ads are the better performers and which are poor performers and budgets can be adjusted as necessary. It is important to note that this should only be acted on after a solid timeframe of data collection and evidence.

Clicks are good, but they should really be looked at according to the Click Through Rate or CTR. The CTR is the percentage based on the number of times an ad or keyword is clicked compared to the number of times the ad has been seen.

In addition to this, Google Ads includes metrics on Phone Calls, Phone Number Clicks (mainly for mobile devices) and Phone Through Rates (PTR). This is for when people make contact via phone rather than clicking to get to a website. Clicks, CTR, Phone Calls and PTR are all about how keywords and ads are performing at a rudimentary level.

The following metrics are linked to the costs associated and performance of Ads campaign/s.

Bids in the most basic sense are the maximum we are willing to pay to have our ad displayed. There are several variations of bidding options available, each with its own set of pros and cons. However, the fact remains, this sets some budgetary limits on what we are willing to invest to get interested parties to show interest in our website. It is important to note that some of these variations give Google the ability to control how budgets are utilised, so always be sure to understand what control is handed over.

Cost Per Click or CPC is an average of what we actually pay per click (based on the timeframe being reviewed). Google has a system that ranks how our ads perform compared to competitors. This system rewards or penalises costs based on the bid and quality score (discussed shortly). If we were to be rewarded, our CPC would become cheaper than the maximum bid set.

Average position (Avg Pos) provides an indication of ad position. Results from a Google search, display 4 ads in the top position above the organic results. There are usually a further 3 ads displayed at the bottom of the page. Ad position is important because the better the position the better the results. An ad in the first position should receive approximately 35% of the clicks. Ads in position 2 to 4 will receive about 20% of the clicks. Ads appearing at the bottom of page one will receive just under 10% of clicks. Ads displayed on page two will get under 2% of the clicks.

Average position can be increased 2 ways. Firstly, increasing the bid will have immediate effect. However, this can create a price war with competitors. One business owner placed ridiculously high bids on a few on his main keywords and owned position 1 for several months while competitors worked feverishly improving Quality Score and incrementally increasing bids. However, once competitors realised this simple and effective game plan, the price war blew out. This was an expensive exercise, thankfully things eventually settled down and returned to more of a ‘norm’. This is not a recommended approach, as it burns through budget and blows out ROI. However, this incident illustrates the power of bids on average positions, particularly when position 1 is worth more than a third of traffic.

2. Optimise the landing pages

Having a billboard close to the CBD is always going to perform better than a billboard on the back roads. In the same way, a well-designed billboard that grabs attention and includes a call to action will always outperform an amateur design or no call to action. Your website landing page holds this same importance.

The above section looks at driving traffic to site. We need traffic to build awareness. This section looks at interacting and engaging that traffic. If the website does not engage website visitors, AdWords budget is being wasted. This is why Google developed the Quality Score, so that advertisers could not rely on bids alone.

Landing Pages are the website destination when an ad is clicked. This is about having a page that is engaging and includes a call to action. These can be normal pages appearing on a website, or they can be specifically designed to be both engaging for the visitors and improving the relevance for Quality Score. The other benefit is that by optimising a landing page, the inclusion of strong calls to action can help lift conversions.

Quality Score was originally displayed as a single score out of 10. It is now made up of the following elements; landing page experience, ad relevance and expected CTR. Each of these contributes to the overall Quality Score. The higher the score out of 10, the better the Google Ads performance. This is why the earlier section is of such importance; ad copy is used to determine relevance as CTR performance. It is important to note that Quality Score is a historical value and not used during the auction time in determining Ad rank.

3. Improve the conversion rate

These are some of the most important metrics available on Google Ads when it comes to performance and results. Conversions, Conversion Rates and Cost Per Conversion give a strong indication of how the overall campaign is performing.

Conversions are the recordable actions that are the objectives of any Google Ads campaigns. A conversion may be obtaining a lead, an online sale, or downloading a file. These can also be given a dollar value to help with calculating ROI.

Conversion Rates, similar to Click Through Rate, provides a percentage result on how many people that clicked on an ad actually converted. This provides useful feedback on the performance of ad copy and calls to action.

Cost Per Conversion divides the ad spend by the number of conversions. This is vital information that also helps in determining the Return On Investment.

This can be further improved through Google Ads Audiences and Remarketing.

Audiences are the grouping of people based on a common factor. Examples include;

  • visitors to the website
  • visitors to the site who do not complete an action
  • existing customers that have been uploaded into AdWords.

Audiences are important for several reasons, however, they can also be specifically targeted for special offers or campaigns, right down to demographics, income brackets and more.

Remarketing goes hand in hand with audiences. This provides the opportunity to re-engage people with your website. Remarketing campaigns are used to target set audiences. In fact, it is possible to exclude audiences as well, so that remarketing is not used on existing customers, saving ad spend. Remarketing uses images and banners to help with its success.

4. Reduce spend waste

There are a lot of things that can be actively done to improve the performance of Google Ads, and monitoring the above metrics is all about that. Reducing ad spend is another indirect way to improve results. There are several ways that ad spend can be wasted.

Search Terms and Negative Keywords: It is important to regularly review the search terms. Search terms are the words typed into a Google Search and related to that specific adgroup. When reviewing these search terms, you will see how popular the term is, how it performed based on some of the above metrics. The great thing is that there is also the option of selecting a search term to add it to the keyword list or add it to the negative keyword list.

Negative keywords are those keywords that are not relevant to the campaign. By excluding these keywords, it effectively stops ads from showing whenever that term is typed into a Google search. Utilising negative keywords is a great way to remove any common words that are not related, for example, someone marketing women’s shoes would exclude any male focussed keywords. In excluding these terms, ads are not shown unnecessarily, saving budget for more relevant searches.

Impression Share is an indication of how campaigns, adgroups and keywords are performing in comparison to competitors. This is displayed as a percentage. This metric is a performance indicator. In addition to this, there are metrics that show the loss of impression share in either budget or in ad rank. This shows where the ground is being lost to competitors, either due to budgetary restrictions or due to ad rank and relevance.

These metrics and aspects of Google Ads give an overview of important factors. However, it is important to note that there is no magic formula, no ‘one-size-fits-all’ approach to Ads. There are too many variables including the competition found within the industry and the region, budget and bidding competition, supply and demand, and more. However, that does not place Ads in the ‘Too-hard-basket’. Due to the quicker traction achieved by Ads, it should be included alongside any good digital marketing strategy.

It’s all about where your billboard is located and how well it is designed. If your Google Ads campaigns are not achieving as well as you would like or you would like assistance, contact Itag Media today and find out how we can help you!

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David Ligtenberg Post written by
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