7 PPC KPIs You Should Be Tracking & Monitoring

In pay-per-click (PPC), key performance indicators play a fundamental role. They let you track the performance of your paid search ads and improve your marketing campaigns through data-driven monitoring. Here are some of the KPIs your should track and why.

• How to choose the most important PPC KPIs to monitor
• The Top PPC advertising KPIs to track
• 1. The Average Click-Through Rate
• 2. The Quality Score
• 3. The Impression Share
• 4. The Average Cost Per Click
• 5. The Conversion Rate
• 6. The Cost Per Action/ Cost Per Conversion
• 7. The Average Position
• Track all these PPC KPIs

How to choose the most important PPC KPIs to monitor

There is not a definitive list of PPC metrics every business should track, as they depend on both your industry benchmarks and your specific marketing campaign goals. Effective campaign management requires careful consideration - if not chosen strategically, vanity metrics may distract you from reaching your desired return on ad spend (ROAS).

Given these facts, you need to set clear marketing goals during your budget allocation and campaign planning phase and choose the key metrics that match these goals. Only this way will you ensure satisfactory campaign results and increase your ROI, whether you're running ecommerce initiatives or B2B campaigns.

If you’re not sure what PPC metrics there are and which ones to measure, here are a few ideas that may help you.

The Top PPC advertising KPIs to track

You can track these KPIs with Google Ads and Google Analytics, and of course, you can create a report with all of them, automatically updated, with DashThis. 

Try this PPC report template with your own data

You can even combine this PPC data with search engine optimization (SEO) data, brand awareness data, or your other ad campaigns.

1. The Average Click-Through Rate

Clicks are a vital indicator of your PPC campaign’s success. Simply put, people click on your ad if they consider them relevant and valuable. Based on ad clicks, many marketers decide whether to pause their campaigns or boost their bids.

However, clicks alone don’t provide you with a full insight into your campaign’s performance. That’s why measuring your Google Ads click-through rate is important. This vital PPC metric shows you how many users clicked on your ad after seeing it. Make sure you optimize for it on the ad, keyword, ad group and on the campaign level. You can also use a/b testing to find wich copy performs the best, the best CTR will probably be your best best to measure this.

How do you calculate your CTR?

Logically, the CTR is calculated by dividing the number of clicks in a reporting period by total impressions. For example, if your ad got 1000 impressions and was clicked 150 times, then your CTR would be: (150/1000) x 100= 15%.

What's a good CTR?

Now, what do we consider a high click-through rate? Well, this depends on your industry. According to the 2018 WordStream research, the average PPC click-through rate stands at 3.17%. If we dig a bit deeper, we will see that the highest CTR belongs to dating and personal services, while technology, B2B, and consumer services have the lowest CTR.

2. The Quality Score

Compared to other PPC metrics, the quality score is a bit abstract. This KPI was created by Google to know the quality and relevance of your ad content. Your quality score impacts everything from your bidding strategies to budget allocation. When running campaigns on Google Ads (or other advertising platforms like Microsoft Advertising) maintaining a high quality score becomes even more crucial as it affects your ad spend and your ability to improve your PPC performance.

How do you calculate the quality score?

Now, to calculate the value of your ad, the quality score uses multiple PPC metrics, including:

• Your click-through rate - it takes your average CTR and account history into account.
• Your ad relevance - Google checks the relevance of keywords and your ad text to the query.
• Your landing page quality - Google calculates your page speed and its user-friendliness, as well as ensures that your landing page content matches the ad message.

What's a good quality score?

Now, the quality score is measured on a 0-10 scale, where 5 is believed to be the golden mean. A good quality score is between 7 and 10, and means that you will pay less for your AdWords campaign. If your score is lower than that, you should work on improving the quality of your ad copy and landing page.

Luckily, Google has recently updated the way they measure the quality score, letting us see our historical quality score data in AdWords (Google ads). This makes it easier for PPC marketers to understand this elusive PPC metric and track their ad performance successfully.

3. The Impression Share

Impression share is a crucial PPC metric that shows what percentage of the total available impressions your ads actually received. For example, if there were 1,000 opportunities for your ad to appear based on your targeting settings, and your ad showed up 600 times, your impression share would be 60%. This PPC performance indicator helps you understand if you're missing out on potential visibility due to factors like budget constraints or poor ad rank.

Through proper campaign management, you can use impression share data to understand your market position and optimize your ad spend accordingly. You can also use this data to boost your impressions and minimize the chances of your rivals’ ads being seen.

How is the impression share calculated?

This metric is calculated by taking the number of impressions your ad received divided by the total number of impressions your ad was eligible to receive.

What's a good impression share?

Ideally, it should be as close to 100% as possible. A good impression share might be between 70% to 100%, but unless you are at 100%, you can always improve it. 

4. The Average Cost Per Click

The CTR cannot be observed in an isolation. Namely, if earning a single link costs you a lot, then it doesn’t pay off.

That is why calculating the cost-per-click (CPC) is critical.

You can use this PPC metric to determine how much you expect to spend each time a user clicks on your ad.

How is CPC calculated?

It's one of the easiest to calculate, quite simply put: Average cost-per-click (avg. CPC) is calculated by dividing the total cost of your clicks by the total number of clicks.

What's a good CPC?

Digital marketing stats suggest that the average CPC for Google Ads across all industries stands at $2.69. Sure, how much you will pay for a single click depends on numerous factors, such as the competitiveness of a keyword, or your ad’s quality score.

Legal industries have the highest cost per click of over $6.75, followed by consumer services sitting at $6.75. While marketers in the majority of sectors pay between $2 and $3 per click, there are also those industries that have a CPC that barely exceeds $1.

5. The Conversion Rate

The conversion rate is one of the most significant digital marketing metrics you should track to measure the effectiveness of your ads. Namely, attracting visitors to your site is just half the job done. The other half is, however, converting those potential customers into paying customers.

Unsurprisingly, this PPC metric depends on a wide array of factors. Does your ad title stand out and grab people’s attention? Is your ad copy informative and relevant to your target audience? What about your landing page experience? Are they user-friendly, optimized to generate your desired user behavior and create outstanding user experiences?

How to calculate conversion rate?

It’s important to mention that the mere notion of conversion data varies across industries. For example, for online retailers, conversions equal sales. For some other businesses interested in lead generation, these could be booked appointments or phone calls. So, to calculate the conversion rate, you first need to understand what the term “conversion” means in your industry. If you’re investing in outside PPC services, it’s important to choose an agency that understands your industry and that can tailor their marketing strategies your specific business needs.

What's a good conversion rate?

Now, the average conversion rate in Google Ads is 3.75%. The highest one belongs to dating and personal services, while advocacy groups have the lowest CPA that sits below 2%.

Note that understanding your conversion rate also requires careful consideration of attribution. Different attribution models can show you different conversion rates - for example, a last-click model might show lower conversion rates than a first-click or linear attribution model. This is particularly important when running multiple campaigns across different channels, as users often interact with several of your ads before converting. Choose an attribution model that aligns with your marketing goals and campaign objectives to ensure you're accurately measuring your conversion success.

6. The Cost Per Acquisition / Cost Per Conversion

Also known as Cost per Action, This PPC metric indicates the success of your PPC campaigns and tells you whether they’re cost-effective or not. According to Google, the average cost per action is the price you pay for your to acquire a new customer via your ad. It is in other words, your customer acquisition cost.

And, they measure it based on your quality score.

How do you calculate the CPA?

Effective PPC management requires careful attention to CPA. The good news is that it is relatively easy to measure. Namely, all you need to do is divide the total cost of your conversions by the number of conversions. Many PPC monitoring tools can help you track this KPI over time, giving you a good idea of your progression.

What's a good CPA?

Your target CPA also depends on your industry; the average CPA across different industries is $48.96, while the highest CPA goes to technology industries, hitting $133.52.

Now, the average cost per action is a simple concept. However, there is a bit more to it. Namely, apart from calculating the average CPA, you can also leverage the so-called targeted CPA when creating your campaigns. This metric lets you set bids automatically to increase your conversions, based on the CPA budget you set.

However, getting the most out of the targeted CPA is not that easy. To use it, you first need to understand different bidding tactics and set up conversion tracking.

7. The Average Position

Google has made numerous changes to its SERPs and, today, they’re not all about organic and paid results. When conducting a search, you first see ads relevant to it, then some related questions, and then the organic results.

How do you calculate the average position?

It’s also important to understand that marketers that offer the highest bid don’t always receive the top ad position. Instead, Google calculates the position of your ad based on your ad rank. And, the way you measure your ad rank is simple- by multiplying your quality score by the maximum cost per impression.

What's a good average position?

Tracking your average ad position helps you understand what the most usual position of your ads is in the SERPs. But, keep in mind that just calculating the average ad position is not enough. You need to contextualize this PPC metric and use it to improve your PPC campaigns. Namely, some marketers earn more conversions by appealing in third or even fourth position than on the first one.

Time to track these KPIs!

What you can conclude by observing these key metrics is that they cannot be observed in a vacuum. They’re constantly intertwining. For example, the quality score impacts your ad position, while your ad position further impacts your clicks and conversions. On the other hand, without getting people to take the desired action, your impressive impression share is pointless.

That’s exactly why you shouldn’t focus on improving just one metric. Instead, you need to track your metrics regularly and improve them accordingly. A good rule of thumb should be that the number of times you check these metrics should align with your campaign optimization schedule.

Above all, when setting your PPC goals, you should remind yourself that there are no uniform rules to follow. Instead, you need to set realistic goals for your business and choose the most important KPIs that will help you achieve these goals. 

There are numerous KPIs we didn't include in our list but could be beneficial to measure your ad campaign success and overall business performance, such as ROI (return on investment) Customer lifetime value (CLV), CPM, Total number of clicks, number of impressions, etc. Make sure to choose the ones that align with your business goals, and PPC ad campaigns. 

Gather all these KPIs in one PPC report

Now, all that’s left to do is to create an automated PPC report that will help you keep track of all these important KPIs! You’re in luck because PPC tracking tools like DashThis make it super easy to do this.