Is My Search Campaign Working? 7 Metrics To Watch
July 7, 2015 · Campaign Management and Optimization
At the end of the day, every business that spends money on search marketing needs to answer the same question: Is my search campaign working?
The ultimate assessment, of course, is whether search advertising is making money for the business. For ecommerce businesses that sell products or services online, it’s easy to link a user’s click to purchase, even if that purchase happens hours, days or weeks later.
But for many local businesses it’s hard to draw a straight line between a click on an ad and new revenue. A plumber can see how many phone calls his search campaign generated last month, but without sophisticated CRM (customer relationship management) software or painstaking human record-keeping, he’s unlikely to know exactly how many of those phone calls led to new jobs.
In addition to any available data linking search ads to revenue, all businesses will get a good sense for the health of their search campaigns by monitoring these seven common metrics on a weekly or monthly basis. (Note that different search advertising platforms may have slightly different names for each metric.)
- Cost per conversion: The total amount spent on search advertising divided by the total number of conversions (where “conversion” is defined as the action the campaign is trying to drive, usually phone calls, completed lead forms, or online purchase). Large businesses with sophisticated marketing departments know down to the cent how much they’re willing to spend to acquire a new customer based on average lifetime value; small businesses usually go with their gut. Lower is better.
- Conversion rate: The percentage of ad clicks that result in phone calls, completed lead forms, online purchases, or other defined conversion events. Higher is better – it means your ads are reaching the right people. For search campaigns specifically geared toward driving phone calls, this might also be called call percentage.
- Cost per lead (CPL): The total amount spent on search advertising divided by the total number of leads generated, usually specific to phone calls or completed lead forms. Lower is better. For search campaigns specifically geared toward driving phone calls, this might also be called cost per call.
- Cost per click (CPC): The total amount spent on search advertising divided by the total number of ad clicks. A less-than-perfect measure of true ROI, but still a good first indicator of whether ads are reaching the right users. Lower is generally better, although if good conversion data is available it’s acceptable to have a higher CPC for clicks that are more likely to convert.
- Click-through rate (CTR): The total number of times an ad is shown divided by the total number of clicks on that ad. This number relates to the strength (or not) of the ad copy – if CTR is low, it means the ads aren’t compelling users to learn more. Higher is better.
- Quality score: Search engines assign this to each keyword in your campaign as a marker of how closely your keywords and landing pages match users’ queries. A high quality score means users get what they’re looking for, and it can help boost campaign performance. Higher is better.
- Impression share: The percentage of times your ad shows up for a specific search query. If this number is low for the keywords that matter most to your business, it’s a signal to raise your bids. Higher is better, especially for your most important search terms.