Do you have a pay-per-click (PPC) campaign for your online business? If you do, then you should know that there is more to PPC management than just measuring your “return on ad spend” or ROAS. To maximize revenue and profitability, you need to be familiar with other metrics that will guarantee the success of your pay-per-click campaign. In an article for Practical Ecommerce, pay-per-click advertising contributor and expert Scott Smigler shares six other metrics that will help e-commerce merchants “scale up your best performing campaigns” and “transform many of your worst performing campaigns into profitable new sources of growth.”
1. Click Thru Rate (CTR). According to Smigler, CTR determines if your ad copy relates well to your target market. For example, if your CTR is 3%, it means that for every 100 times that your ad is displayed, there are three people who click on it. A “healthy” click thru rate would be from 1 to 3%. To boost CTR, Smigler recommends creating ad copies that have relevant keywords, communicating meaningful value propositions, begging for the click and always testing.
2. Average Position. In PPC management lingo, average position refers to how high or how low your ad normally shows up in the search results page. In this case, number one is not always the ideal spot to be in. Based on the writer’s experience, online retailers will most likely prefer to be in the top two to five spots.
3. Quality Score. This is an independent performance metric conducted by Google. It “measures how well your keyword, landing page, and ad relates to a specific search, taking into account past performance.” Smigler notes that this is, in a way, an equalizer between small brands and big brands because it allows small businesses who deliver topnotch customer service to appear above bigger brands after they click, even while paying less per click.
4. Impression Share. This is measured at the campaign level and determines how often your ads show depending on the total number of queries available for your relevant keywords. For example, an impression of 40% means that your ad shows 40 times for every 100 searches relevant to your keyword. A healthy figure for this performance metric is 80% and above. Additionally, impression share can be broken into two components: budget and rank. These components let you know how you can improve visibility and search exposure.
5. Bounce Rate. A 50% bounce rate means that half of the people who click on your ad leave before visiting a second page on your website. Therefore, the lower the bounce rate, the better. A healthy bounce rate should be at about 40% and below. To improve your bounce rate, Smigler suggests “comparing your bounce rate for a particular keyword to your average bounce rate for its landing page.”
6. Conversion Rate. All of your Internet marketing efforts boil down to your conversion rate. According to Smigler, it is inclusive but no exclusive to how you manage your PPC campaign, how well your website is optimized for conversions and how more appealing and more competitive your offering is. A healthy range for conversion rates could be at about 1.25%.