The 5 KPIs Every Entrepreneur Should Track on Google Ads
Posted: Tue Dec 03, 2024 7:02 am
Google Ads represents an extraordinary opportunity for businesses that wish to promote uk phone number list their products and services online. However, to obtain significant results, it is essential to have a well-defined strategy and carefully monitor the KPIs (Key Performance Indicators).
Entrepreneurs and Creating a Google Ads Strategy
In the initial phase of working with a consultant or marketing agency, the entrepreneur actively participates in developing an effective Google Ads strategy. This involves clearly communicating business goals and cost factors . The entrepreneur should define the specific goals he or she wants to achieve with advertising campaigns, such as increasing sales, generating qualified leads, or expanding the market. These goals allow the marketing agency to tailor the strategy appropriately to maximize the desired results.
Among the most important tasks that company management must perform is the one related to the indication of the cost factors that the agency will have to take into account in managing the campaigns. Among these, there will certainly be the advertising budget, the COGS (cost of goods sold) in the case of an e-commerce or the closing rate and profitability factors in the case of lead generation. By collaborating with the agency specialized in performance marketing, the entrepreneur can discuss the available financial resources and establish an advertising plan that is sustainable and in line with the business objectives.
The marketing agency on the other hand, with its experience and expertise in the sector, will provide valuable strategic inputs and suggestions to create effective assets , such as engaging ad copy, keyword selection, audience segmentation and choosing the best targeting options. Collaboration between the entrepreneur and the agency is essential to develop a winning advertising strategy on Google Ads.
Performance Monitoring: The 5 KPIs to Always Monitor
Once the campaigns are active, it is essential that the entrepreneur can constantly monitor the KPIs to evaluate the effectiveness and success of the advertising initiatives. Every manager of a company, net of the specifics of their business model, should understand the meaning of at least 5 metrics and as many KPIs to always keep under observation in order to then discuss them with consultants to understand the trends:
CTR (Click-Through Rate) : Click-Through Rate measures the percentage of users who click on your ad compared to the number of times it is displayed. This KPI is an indicator of the relevance and interest generated by the ad. You should regularly check the CTR to evaluate whether the ad is attracting the attention of the target audience and ask the agency to make changes if necessary.
CPA (Cost per Acquisition) : Cost per Acquisition represents the average cost incurred to acquire a customer, a lead or a conversion. This KPI helps you understand the efficiency of your advertising campaigns and the return on your investment. Monitoring the CPA allows you to optimize the budget and ask the consultant to make any changes to reduce costs and maximize ROI.
Conversion Rate : Conversion Rate measures the percentage of users who take a desired action , such as a purchase or registration, after clicking on your ad. This KPI reflects the effectiveness of your campaigns in generating conversions . You should monitor Conversion Rate to identify whether users are responding positively to the ad and involve the agency in creating keyword, ad and CPC tests to try to improve this very important metric.
ROAS (Return on Advertising Spend) : Return on Advertising Spend measures the ratio of revenue generated to the money spent on advertising. This KPI provides you with a clear assessment of the return on your advertising investment. By monitoring ROAS, you can assess whether you are getting a positive return on your advertising budget and make strategic changes if necessary.
Impression Share : Impression Share indicates the percentage of times your ad is shown compared to the total number of possible impressions. This KPI helps you evaluate whether you are effectively reaching your target audience . Monitoring Impression Share allows you to identify whether the ad is getting adequate visibility and whether it is necessary to make adjustments to the budget made available to the agency to improve exposure.
How often and for what purpose should KPIs be monitored?
How often you should check your data depends on the complexity of your campaigns and business goals – although it should never become an obsessive, daily practice. In general, it is true that KPI monitoring should be done regularly, at least weekly or monthly , to get a clear view of campaign performance.
To evaluate the effectiveness of the work done by the agency, it is important to use contextual data such as YtD (Year-to-Date) and YoY (Year-over-Year). This data allows you to compare the performance of your campaigns with previous periods in the same year or previous years. For example, if the campaigns are exceeding the results obtained in the same period of the previous year, it could indicate a good job done by the agency. On the contrary, if the performance is not meeting expectations or is decreasing compared to the previous year, it may be necessary to make changes or request a more in-depth analysis by the consultants, to understand if there is room for optimization or if from one year to the next there were market factors that influenced the performance.
Entrepreneurs and Creating a Google Ads Strategy
In the initial phase of working with a consultant or marketing agency, the entrepreneur actively participates in developing an effective Google Ads strategy. This involves clearly communicating business goals and cost factors . The entrepreneur should define the specific goals he or she wants to achieve with advertising campaigns, such as increasing sales, generating qualified leads, or expanding the market. These goals allow the marketing agency to tailor the strategy appropriately to maximize the desired results.
Among the most important tasks that company management must perform is the one related to the indication of the cost factors that the agency will have to take into account in managing the campaigns. Among these, there will certainly be the advertising budget, the COGS (cost of goods sold) in the case of an e-commerce or the closing rate and profitability factors in the case of lead generation. By collaborating with the agency specialized in performance marketing, the entrepreneur can discuss the available financial resources and establish an advertising plan that is sustainable and in line with the business objectives.
The marketing agency on the other hand, with its experience and expertise in the sector, will provide valuable strategic inputs and suggestions to create effective assets , such as engaging ad copy, keyword selection, audience segmentation and choosing the best targeting options. Collaboration between the entrepreneur and the agency is essential to develop a winning advertising strategy on Google Ads.
Performance Monitoring: The 5 KPIs to Always Monitor
Once the campaigns are active, it is essential that the entrepreneur can constantly monitor the KPIs to evaluate the effectiveness and success of the advertising initiatives. Every manager of a company, net of the specifics of their business model, should understand the meaning of at least 5 metrics and as many KPIs to always keep under observation in order to then discuss them with consultants to understand the trends:
CTR (Click-Through Rate) : Click-Through Rate measures the percentage of users who click on your ad compared to the number of times it is displayed. This KPI is an indicator of the relevance and interest generated by the ad. You should regularly check the CTR to evaluate whether the ad is attracting the attention of the target audience and ask the agency to make changes if necessary.
CPA (Cost per Acquisition) : Cost per Acquisition represents the average cost incurred to acquire a customer, a lead or a conversion. This KPI helps you understand the efficiency of your advertising campaigns and the return on your investment. Monitoring the CPA allows you to optimize the budget and ask the consultant to make any changes to reduce costs and maximize ROI.
Conversion Rate : Conversion Rate measures the percentage of users who take a desired action , such as a purchase or registration, after clicking on your ad. This KPI reflects the effectiveness of your campaigns in generating conversions . You should monitor Conversion Rate to identify whether users are responding positively to the ad and involve the agency in creating keyword, ad and CPC tests to try to improve this very important metric.
ROAS (Return on Advertising Spend) : Return on Advertising Spend measures the ratio of revenue generated to the money spent on advertising. This KPI provides you with a clear assessment of the return on your advertising investment. By monitoring ROAS, you can assess whether you are getting a positive return on your advertising budget and make strategic changes if necessary.
Impression Share : Impression Share indicates the percentage of times your ad is shown compared to the total number of possible impressions. This KPI helps you evaluate whether you are effectively reaching your target audience . Monitoring Impression Share allows you to identify whether the ad is getting adequate visibility and whether it is necessary to make adjustments to the budget made available to the agency to improve exposure.
How often and for what purpose should KPIs be monitored?
How often you should check your data depends on the complexity of your campaigns and business goals – although it should never become an obsessive, daily practice. In general, it is true that KPI monitoring should be done regularly, at least weekly or monthly , to get a clear view of campaign performance.
To evaluate the effectiveness of the work done by the agency, it is important to use contextual data such as YtD (Year-to-Date) and YoY (Year-over-Year). This data allows you to compare the performance of your campaigns with previous periods in the same year or previous years. For example, if the campaigns are exceeding the results obtained in the same period of the previous year, it could indicate a good job done by the agency. On the contrary, if the performance is not meeting expectations or is decreasing compared to the previous year, it may be necessary to make changes or request a more in-depth analysis by the consultants, to understand if there is room for optimization or if from one year to the next there were market factors that influenced the performance.