Launching a pay-per-click campaign comes with a risk. Unlike other online marketing strategies, pay-per-click marketing comes with a price. If not used correctly, it can throw the efforts to waste. While this strategy helps boost online visibility, there’s no assurance that it will happen. The business still needs to do a few more things to increase potential customers. There are key performance indicators (KPIs) that determine if the efforts are heading in the right direction. Understanding the results of these strategies will aid in identifying the next steps to move forward.
Below are the most vital KPIs to look into.
- Clicks. The first aspect to check is the number of people who clicked on the ad. It somehow provides a picture of how successful the campaign is. When more people click on the ad, it shows the effectiveness of the ad campaign. While this KPI doesn’t give a complete picture, it’s an excellent start. It also helps marketers determine which keywords don’t receive any click at all. It might be time to stop bidding on those ads and focus more on keywords that receive heavy traffic.
- Click-through rate. This indicator determines the number of clicks received relative to the number of impressions. For instance, if the ad received 1,000 impressions and 100 users clicked the ad, it’s a 10% click-through rate. In a way, it’s an excellent measure of success. There are no clear standards on what qualifies as a successful click-through rate. It depends on the industry. In the personal industries, it’s a 3.40% rate while it’s only 2.14% in the auto industry. The point is that the business should set standards to gauge the success level. It should also be a realistic figure.
- Quality score. This KPI is quite challenging to understand. It determines how relevant the ad content is. However, there’s no clear way of judging it. Despite that, marketers should still pay attention to this indicator. If the website has a quality score between 7-10, it means that the advertiser will pay less. A low-quality score requires advertisers to pay more. The standards change all the time. The point is that marketers should always make the ad relevant to the content.
- Cost per click. Advertisers already know how much they’re going to spend for PPC each month. Most of them already have a predetermined budget. However, the actual amount paid depends on the competitors. The cost changes depending on how much the competitors bid. If the business needs to spend more on keywords that aren’t too impactful, it doesn’t make sense. Cheaper ads with a more significant impact are worth pursuing. The point is that marketers have to be smart in determining when and where to spend money.
- Conversion rate. The ultimate goal of the PPC campaign is an increase in the conversion rate. It refers to the number of people who decided to purchase the products and services after seeing the ad. A low percentage might already mean a lot in most instances. For instance, of the 100 people who viewed the ad, a 5% conversion rate is already good enough. It means that five people decided to spend money to patronize the brand. Sometimes, this percentage is enough to cover the marketing cost and earn some profits. Usually, PPC campaigns aren’t designed to focus on conversions but clicks. Eventually, though, if the ads gained enough appeal, the business can start focusing on the conversion rate.
- Impression share. The impression refers to the number of people who saw the ad. It doesn’t mean that they clicked it. It’s not necessarily the best indicator. It might even give a false narrative about the success level of the marketing campaign. Despite not giving a full picture, it still helps to know what the impression share is. If the company gets 50% of the share, it means that the competitors get the rest. It’s crucial to find ways to increase the share so that it gets reduced for other businesses.
- Average position. This indicator determines the average in which the ad appeared on search engines. The top spot usually goes to the highest bidder. However, Google can’t give the top spot to the highest bidder all the time. There are changes in the position depending on Google. The good thing is that the average doesn’t matter much. An average position of 3 doesn’t mean that the ad appeared third all the time. It might mean that it was on top for some searches but fifth on the others. Besides, the average position doesn’t necessarily equate to conversion rate. Some businesses have a high conversion rate despite having an average position of three. This KPI provides context to better understand other indicators, but shouldn’t be the target indicator for pay-per-click marketing.
- Budget attainment. This indicator refers to how close the company is to reach the budget. It’s not necessarily an indicator of anything essential, but it helps determine how to spend wisely. Sometimes, businesses underspend or overspend in PPC campaigns due to the lack of focus on this factor. Bidding practices might also get affected.
Understanding how the KPIs affect the pay-per-click marketing campaign
These performance indicators are essential in determining if the business is heading in the right direction. Not all of them are useful, and some of them don’t even provide an exact context. Therefore, it’s important to look at different indicators before taking the next step.
After determining the progress of the PPC campaigns, there should be an effort to improve the ads. While indicators like clicks and impressions don’t give a full picture, they still provide information about people’s responses. If these indicators are lagging, they need drastic changes.
The company needs to pay to be more visible online. Pay-per-click marketing cuts the line and provides an opportunity to rank on the first page, it’s a strategy worth pursuing. If done correctly, it will increase visibility. It will also offer small businesses a chance to compete with more prominent companies.
What is Pay Per Click Marketing?
Pay-per-click marketing is one of the many business platforms for advertising products and services. If you’re a regular internet user and online shopper, you’ve likely seen and clicked on these ads. These types of ads can be found almost anywhere on the web, from search engines to social media sites. Do you have the option to click? Many marketers pay per click because they are a lucrative business. Advertisers will only pay for every conversion that occurs. At the same time, publishers are paid for the simple task of strategically placing pay-per-click ads on their site or content.
What is Pay Per Click Marketing?
Pay-per-click marketing is an advertising platform where advertisers pay their publishers for every click on the ad on their website. Guests of websites, forums, and social media sites click on ads and advertisers and publishers to generate income. This kind of advertising platform still requires some investment. It’s a very cost-effective form of advertising compared to other formats, but if you use it incorrectly, you may spend more than your return on investment.
How does Pay Per Click marketing work?
In pay-per-click marketing, advertisers bid for keywords on Google or on the search engine of their choice. These keywords are based on the target audience of the advertiser. They choose keywords that are related to their business and are more likely to be entered by the public when using search engines to find them. Keyword selection is just one part of the job. They have to bid higher than other advertisers to be eligible for pay-per-click marketing keywords. Every time an internet user enters a keyword in a search box, pay-per-click ads will appear at the top or next to the search results as part of the sponsored results for easy viewing.
The keyword rate depends on the keyword requirements. If a keyword is very popular, you can expect many competitors to bid on the same keyword. This keyword is likely to get a high rating. If a keyword is used less quickly, you can bid on it at a very low rate. The equivalent bid will be returned to you for each click of your ad.
Why use pay-per-click marketing?
Pay-per-click marketing is one of the many ways to drive traffic to your business website. Your ad is placed in a sponsored ad in a highly strategic position on the page of popular websites with thousands of Internet users. They are more likely to be noticed and clicked. Every time an internet user clicks on an ad, they will be redirected to a website selling your products and services. Your pay-per-click ad is like a referral. Pay-per-click marketing in general also increases your chances of making a sale.
Since 1996, Rob Fore has been building five, six, and even six-figure businesses online in their spare time. Now it’s your turn, My Lead System Pro – is the program Rob has used to generate over 18,000 leads and support 1,000 new team members.