Analytics and Metrics Part Three: Pay Per Click (PPC)
Now that you’ve mastered Search Engine Optimization in Part Two of our Internet Marketing Analytics blog it’s time to tackle Part Three – Pay Per Click (PPC) – Enjoy!
Paid Search or Pay Per Click (PPC) Metric
PPC stands for Pay-Per-Click and is a model of internet marketing in which advertisers pay a fee each time one of their ads is clicked. Think of it as a way of buying visits to your website.
You want to make sure you know how to track your paid search campaigns as, of all of the metrics out there, learning the ins and outs of paid search analytics is one of the most important. Why? Because PPC can dramatically affect your budget and, in general, not positively!
Here is a rundown of the most important PPC metrics:
- PPC Visits – If you are a subscriber to one of the PPC campaigns, the statistics on how well your campaign is doing will appear here.
It is important to remember that PPC visitors are “suspects” initially, and through lead nurturing, a certain percentage may be converted into actual “Leads”.
- Click-through-rate (CTR) – The CTR is calculated by dividing the number of people that actually clicked on your advertisement by the number of impressions, the total number of people who saw your ad – whether they clicked or not. Evaluating your CTR can help you fine-tune your sponsored ads in order to find the most effective headlines, copy, and landing page URLs.
- Cost-per-click (CPC) – Your average CPC per keyword tells you how much you are paying for a specific keyword. Monitoring your CPC, especially in relation to your conversion rates, will help you budget your paid search campaigns and help you determine your return on investment (ROI).
- Conversion rate – Your conversion rate is how many people are clicking on your ad vs. how many people are completing your call to action by filling out contact information, signing up for a newsletter, or making a purchase.
- Cost per Acquisition (CPA) – Your CPA tells you how much you are spending on paid search advertising in return for a conversion. This also helps you determine your budget and your ROI.
- Return on Ad Spend (ROAS) – ROAS is calculated by dividing your total ad spend by the total amount of revenue that is generated from your paid-search conversions. Your ROAS helps you determine whether or not the money you invest into paid search actually pays off in the long run. You want to make sure that you are bringing in more money than you are putting into advertising.
These are just a few of the most important metrics you need in order to make sure that you are running an effective paid marketing campaign. Without analytics, it’s difficult to really determine which actions are helping and which actions are hurting.