Pay-per-click advertising (PPC) is an internet marketing model in which you pay a fee each time your ad is clicked. It’s a paid method of driving traffic to your website, rather than trying to draw in visitors organically.
PPC offers a range of benefits including the fact that it can have an instant impact, and that it works well with other marketing channels. Another benefit is that it is highly measurable.
What metrics are you able to measure, exactly? And how best should you report those findings?
Read on as we take a look at creating a PPC report and the key metrics it should include.
What Is a PPC Report?
A PPC report is exactly what it sounds like. It’s a report that is used to demonstrate the results of your PPC campaign.
This is done by taking a look at some key metrics that can help to show how effective your PPC campaign has been. By examining these metrics you can see how well the PPC campaign is meeting your goals and what you can do to improve it. For a PPC report to be of any use, however, it needs to be well structured and use the correct metrics.
How to Structure a PPC Report
When analyzing PPC campaigns it’s possible to break things down to a granular level. It’s all too easy to create a PPC report that leaves the reader overwhelmed with the sheer mass of data.
The best advice is to structure your PPC report so that it starts with the general and moves to the specific. That way, anyone reading the report can get a basic understanding of what the report is showing, even if they don’t dive into the details. Those that want to take a more thorough look under the hood can examine the metrics in full.
You also need to consider who the report is for. If it’s for a client, then they are probably more interested in return on investment than impression share. Make sure that your PPC report meets the purpose it is intended for.
The Key Metrics to Include
There is a huge number of metrics that you could include in a PPC report, but some are more important than others. We’ll take a look at some of the metrics you should always include.
One of the most important things you need to know is how many people are clicking on your ad. That’s what clicks measure.
It’s a count of how many times people have clicked on the ad and been directed to your landing page.
Cost per Click
CPC calculates how much it has cost you in advertising spend on average for each click that you gain.
What determines a “good” cost per click will depend on other factors such as conversion rate, which we will come to below.
CTR is a measure of how many people have clicked on your ad out of the total number of people who have seen it.
A high click-through rate means that your ad is doing its job and many people are persuaded to click on it. A low click-through rate means that your ad may not be compelling enough, or it might be targeting the wrong keywords.
Conversion rate is the number of conversions divided by the total number of clicks.
A conversion is when someone performs the action that you are targeting. That action could be calling you, filling in a contact form, subscribing, or even making a purchase. The conversion rate isn’t a measure of the ad itself, but rather how effective your landing page is at converting people who have clicked through to it.
Cost per Conversion
This measures how much it has cost you for each conversion you have achieved. The better your conversion rate, the lower this will be.
How to Analyze Each Metric
We now know the key metrics. Let’s take a quick look at how to analyze them.
Clicks is a useful general metric, but it doesn’t tell you as much as some of the other metrics do.
Although it doesn’t tell you much about your return on investment, it’s still important to ensure that this number isn’t too low. If you’re not getting enough clicks, then it doesn’t matter how good your conversion rate is.
Cost per Click
What defines a good cost per click will depend on how much you make from each conversion.
If your cost per click is high, but you have a good conversion rate, and each conversion equates to a large purchase, then despite a high cost per click your campaign will still be giving you a good return on investment.
Click-through rate can be affected by the quality of your ads, but also the keywords that you’re bidding on.
If you’re not sure which is the issue, try A/B testing some ads for the same keywords to see if there is any impact. If the click-through rate stays the same, then the keywords may be the bigger problem.
Conversion rate isn’t really a measure of the success of your PPC campaign at all. It’s more a measure of how effective your website is at converting visitors.
That doesn’t mean that this isn’t an important metric. It will help you to make changes to your site that will improve the success of your PPC campaigns.
Cost per Conversion
This really is the bottom line. How much has it cost you to generate a conversion?
You can then compare this to the amount that you make from each conversion, and be able to get a very clear picture of whether or not your PPC campaign is cost-effective. Remember that even an effective campaign can be improved upon.
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