Google Ads Metrics Overview

Jun 8, 2023PPC

Unlocking the potential of Google Ads requires more than just a basic understanding of its features and functionalities. As a SEM Analyst, having a deep-rooted comfort level with the platform’s metrics is paramount to achieving success in this dynamic field. Not only does it enable you to flawlessly execute tasks within client accounts, but it also empowers you to effectively communicate with clients, bridging the gap between their goals and the strategic marketing tactics necessary to achieve them. In this blog post, we will explore the significance of developing a strong understanding of Google Ads metrics and delve into the invaluable role they play in driving results and fostering meaningful client relationships.

After reading this blog post and exploring these metrics on your own, you will be able to:

  1. Define the core metrics that are relevant to every account/campaign
  2. Understand how metrics relate to each other
  3. Select the right metrics to answer common client questions
  4. Define the bid strategies available in Google Ads and what metrics are the major criteria for them
  5. Select the right bid strategy for common client goals

Performance Metrics

Available Performance Metrics

These metrics track your ad appearing as well as the primary action taken on an ad.

We primarily care about five of these metrics.

Formulas for Performance Metrics

Clickthrough Rate (CTR) = clicks / impressions

Avg. CPC = cost / clicks

Additional Notes

  • CTR is a measure of relevance (your message and targeting) but influenced by rank.
  • CPC is a measure of competitiveness and aggressiveness

Performance Metrics vs. The Auction

  1. When someone searches, the Google Ads system finds all ads whose keywords match that search.
  2. From those ads, the system ignores any that aren’t eligible, like ads that target a different country or are disapproved based on a policy violation.
  3. Of the remaining ads, only those with a sufficiently high Ad Rank may show. Ad Rank is a combination of your bid, ad quality, the Ad Rank thresholds, the context of the person’s search, and the expected impact of extensions and other ad formats.

Step 3 = where CPC is determined and impressions happen

Cost only accrues if your ad is clicked

The Auction: In Detail

There are 5 main factors in the ad auction that determine which ads appear, and in what order:

  1. Your bid: When you set your bid, you’re telling Google Ads the maximum amount you’re willing to pay for a click on your ad. How much you actually end up paying is often less, and you can change your bid at any time.
  2. The quality of your ads: Google Ads also looks at how relevant and useful your ad and the website it links to are to the person who’ll see it. Our assessment of the quality of your ad is summarized in your Quality Score, which you can monitor and work to improve in your Google Ads account.
  3. The expected impact from your ad assets and other ad formats: When you create your ad, you’ve the option to add additional information to your ad, such as a phone number, or more links to specific pages on your site. These additions are called ad assets. Google Ads estimates how assets and other ad formats you use will impact your ad’s performance. So even if your competition has higher bids, you can still win a higher position at a lower price by using highly relevant keywords, ads, and assets.
  4. Your Ad Rank: To help ensure high-quality ads, we set minimum quality thresholds that an ad must achieve in order to show in a particular ad position.
  5. The context of your ad: With the ad auction, context matters. When calculating Ad Rank, we look at the search terms the person has entered, the person’s location at the time of the search, the type of device they’re using (for example, mobile or desktop), the time of the search, the nature of the search terms, other ads and search results that show on the page, and other user signals and attributes.

Source: google.com

Much More Detail – Further Reading

Conversion Metrics

Available Conversion Metrics

Conversions = The primary goals we count as conversions

All conversions = every available conversion being tracked

View-Through = ad was seen but not clicked

Formulas for Conversion Metrics

CPA = Cost / Conv

Conv Rate = Conv / Clicks

ROAS = Conv Value / Cost

Additional Notes

  • The best way to influence conversion performance is being selective about who sees ads.
  • We can influence value/conv (aka AOV) by sending traffic to higher dollar products

Example Scenarios

Competitive Metrics

Available Competitive Metrics

Impression Share = % of times your ad served vs how many times it could have been served

Lost IS Rank = your bid was too low

Lost IS Budget = your budget was too low

Lost Impression Share Diagram

Reasons for Lost IS

  • Budget
    • Your daily budget is too low. Auctions happen where you do not have budget to show.
  • Rank
    • Your bid is too low
    • Your bid strategy is set too aggressively compared to your results
    • Your ad quality is too low
    • Your targeting is too broad

Interpreting Competitive Metrics

Additional Notes

  • There’s no perfect value for impression share
  • But the lower it gets, the less opportunity we have
  • Campaigns that perform the best should get the most attention for increasing impression share

Impression Share vs Top vs Abs Top

Top Impressions = above organic

Absolute Top Impressions = top search ad

Bid Strategies

Smart vs Automated Bidding

Smart bidding uses signals from the audience, the auction and your website to determine bids in real time.

Further reading: https://services.google.com/fh/files/misc/setting_smarter_search_bids_2021.pdf

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