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How to Measure Google Ads Performance?

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how to measure google ads performance

Google Ads (formerly Google AdWords) is  a powerful marketing tool for all businesses. One of the best aspects of using Google Ads is the ease with which one can measure success as well as understand the performance of each ad. It assists businesses in continuously evaluating their campaigns and improving their digital marketing strategy.

In this blog, we will explore what Google Ads are and which metrics are most critical for measuring the success of any online ad.

1] What are Google Ads?

Google Ads operates on a pay-per-click model. Advertisers pay Google when a user clicks on their ads. These ads are visible at the top of the Google search result.

But how does Google decide on which ads to show when and where?

Every time a user submits a query in Google’s search engine, in about 0.8 seconds, Google scrutinises its massive database of ads and decides which ad to show on the page.

By using keywords, semantics and various algorithms, Google recognises every single available ad that is fit to be shown based on the user query. The next step, is for the auction to take place. The ad auction helps Google determine which ads to show and at what position. Here, the ad rank is calculated from every ad in the auction. The Ad rank is calculated by:

  • The bid amount
  • Auction-time ad quality
  • Competitiveness of auction
  • Context of a user’s search
  • Expected impact of extensions and other ad formats

Google displays ads across the web on multiple sites that a user browses daily. Today, around 2 million sites use Google’s Display Network platform. With users spending a lot of their daily time browsing or reading a blog, often a display ad may pop-up about ‘shoes’ they might be interested in.

2] Which Google ads metrics matter the most?

When discussing online ad performance, it is important to talk about two key Google Ad metrics: Return on investment (ROI) and Cost-per-click (CPC).

  • Return on investment/ROI

Return on investment is a simple measurement to understand how much businesses spend versus how much profit they make. It is calculated as a percentage.

To calculate ROI, simply take (sales revenue – the ad costs)/ the ad costs and multiply by 100.

A positive ROI means that the ads are bringing in more money than what is being spent; meaning it is generating profit. But if the ROI is negative, businesses should focus on changing the ad, refreshing the copy or targeting other keywords.

  • Cost-per-click/CPC

CPC assists in measuring how much a business is spending for each ad click by using a basic ratio. It is an important measurement as it helps quantify and put a price tag on the brand exposure the ads are generating for the business.

To calculate CPC, take the total amount spent on the ads and divide it by the number of clicks; those ads drove to the targeted website.

Google Ads Smart campaigns also assist in showing the CPC per ad in the campaign dashboard.

3] Steps to analyse Google ads metrics

From setting up conversion tracking to estimating the ad performance corresponding to different characteristics, Google Ads help to gain insights into the consumer, no matter the size of the business.

A thorough analysis can assist businesses to boost their online marketing efforts. To analyse Google Ads data, the following tips would be most useful.

  • Set up and monitor conversion tracking
  • Measure the ROI or return on investment
  • Discover the most productive keywords related to the brand
  • Check and analyse the quality score
  • Use reports

4] Ways to make Google Ads work for you

Smart campaign insights help businesses to learn and explore the best ways to connect with their audience and measure the performance of their ads to improve them over time. To optimise ad campaigns effectively, businesses can employ the following tactics:

  • Confirm the keyword themes as well as search phrases

When setting up an ad, choose 7-10 keyword themes. These themes will be used to show the ad when a person searches certain terms in Google. With smart campaigns, businesses can create a list of search terms that result in their ads. However, they should ensure these search terms are a good match for the types of products/services they offer.

  • Review the locations where the ads are running

People across the globe use Google, but businesses may only want to reach people in the area they serve. If a business only delivers or provides services locally, for example: digital agency in Surrey, they should spend money on displaying their ads to customers in the same locality/area. Businesses should check their smart campaign settings to ensure their ads only appear to people in and around the areas they serve.

  • Check the times the ads are running

The internet is on 24/7, but it can not be the case for many businesses. Businesses should be aware of the times of day or days of the week when most of their potential buyers are  online, looking for their services. They can utilise the ad scheduling feature to adjust when their ads show up to make the most of those clicks.

  • Make the ads attractive and eye-catching with interesting copy or visuals

To ensure your ads rise above the general online noise, it is important to catch the eye of your target audience with interesting designs. By testing different combinations of texts and images, businesses can check which ones work best for them.

  • Make sure the website to which the traffic will be directed is up-to-date and easy to navigate

When someone clicks on the ad, it will automatically take them to the business website or a landing page. It is therefore important that the website is up-to-date and makes it as easy as possible for users to complete the purchase or take the required action. The website should convey exactly what it offers and how the consumer can connect to learn more or make a purchase. The website should also be easy to navigate, mobile-friendly, and load quickly. Businesses should update the business hours along with the contact information on their website.

Key Takeaways

To measure the success rate of any Google Ads campaign as well as to calculate the Return on investment (ROI) and Cost per click (CPC) along with tracking the numbers, businesses can implement the following tips to optimise their ads further.

  • Confirm the keyword themes as well as search phrases
  • Review the locations where the ads are running
  • Check the times the ads are running
  • Make the ads attractive as well as eye-catching with interesting copy or visuals
  • Make sure the website to which the traffic will be directed is up-to-date and easy to navigate.

In Conclusion

Google Ads are a great way for any business to reach out to more people and attract more customers. However, it is important to ensure that the ad copy is compelling and relevant to improve conversions.

One of the vital parts of managing a successful Google ads campaign is to consistently monitor & analyse the ads performance. This helps businesses to optimise them for conversion. While it is easy to feel overwhelmed when it comes to analysing Google Ads, multiple tools are available that can come in handy at every step, such as

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