PPC advertising for ecommerce is a means to market your business and reach new customers. It is a way to improve visibility and boost revenue. Still, PPC service requires your budget and time investments. Want to assess the performance of every cent you spend on PPC advertising for ecommerce? Not sure which PPC metric to focus on?
Indeed, there’s a vast number of metrics to track and compare, which may seem confusing. But we’ve got you covered. This article will look at ten crucial metrics, following which you can draw valuable conclusions about your business.
- Clicks. Well, it all starts with clicks. They mean the number of people who clicked on your business ad. This is one of the essential metrics for measuring your campaign’s success. You see at once whether the ad works or not.
Rises or falls in click amount may demonstrate opportunities or problems with your ecommerce campaign. If on the rise, it may be the right moment to capitalize on increased search volume by increasing your budget and getting more competitive with keyword bids.
- Average Order Value (AOV)
The average order value is the sum of your profit divided by the number of sales.
This metric’s importance is that it demonstrates your customers’ behavior and the level of benefit from your advertising investments. Ideally, this indicator should be as high as possible.
For this, you should resort to great offers and promotions that motivate the client to spend more money on your site. When you plan to raise prices, check your revenue per user before and after. If the number of users hasn’t changed significantly during this time, and the AOV has dropped, then the price increase was not a good idea.
- Impression Share
This metric shows the number of impressions divided by the number of impressions received.
This metric is very relevant if your goal is to increase brand awareness. Google Ads helps you see data on the number of missed impressions, based on the reason for their loss, which can be in the campaign budget or ad ranking.
Considering this metric, you can change the parameters of your campaign and achieve a better result.
- Customer Lifetime Value (CLV)
LTV is the profit that you receive from a client for the entire time of cooperation with him. This metric can be actual (the total of all the profits from purchases made by the customer) or projected (the total income you expect to receive from that customer).
Why is CLV so important? Because the longer people stay with your company, the higher your income will be. This ads management metric also helps you understand if the current cost per acquisition is too high or too low and set the optimal budget.
- Conversion Rate
The conversion rate is the percentage of users who completed the targeted action. For example, they made a purchase, downloaded an application, filled out a contact form, etc. One of the simplest but no less critical indicators. You can count it by dividing the number of conversions by the number of ad clicks.
Undoubtedly, high conversion rates are the goal of any campaign, as potential buyers taking action are potential profits. Low scores on this metric indicate problems at some stage of the sale that stops buyers from purchase. The problem can be in any area, from the price to the landing page’s quality, and finding and solving these problems is one of the main tasks of an ecommerce PPC ads expert.
- Cost Per Acquisition (CPA)
CPA is the money an ecommerce business pays when the customer makes the targeted action. This simple metric is the basis for CPA marketing, where you pay for every conversion an affiliate source brings.
Analyzing this metric, coupled with customer lifetime value and CPC, you get a comprehensive insight into campaign earnings. Keep in mind that low cost per action is often associated with low conversions. It’s a good idea to consider this when planning optimal metrics.
- Cost Per Click
CPC is the amount you pay to the ad site for each click on your ad. You can easily calculate it by dividing your campaign’s total cost by the number of clicks it got. This metric will help you gauge your paid ad campaigns’ cost-effectiveness and calculate what CPC limit to set not to lose profit, taking into account other metrics, such as CPA and the percentage of users’ conversion.
- Quality Score
This metric measures how relevant your PPC ads are to the specific keywords on Google Ads. When managing a PPC campaign, a PPC expert always aims to reduce its costs.
Working with Google Ads, one of the easiest ways to reduce your cost per click is to increase its Quality Score. The higher Google evaluates your relevance in points, the lower price for cost per click it sets. With low relevance, on the contrary, encouraging you to improve, it will be overpriced.
- Click-through Rate
In fact, just the number of clicks is not very informative compared to other metrics. To make sure your business ad is relevant to users, you should calculate CTR Rate. It is the number of clicks divided by the number of impressions.
This indicator affects your CPC in Google Ads on many resources and the quality score and ad rank. A low CPR indicates that potential customers are not very interested in your ad. To tackle this issue, you may consider the ad’s relevance and attractiveness and make the modifications.
- Return on Ad Spend (ROAS)
Return on Ad Spend is revenue from an ad campaign a business receive after spending a certain amount. Whatever advertising campaign you run and whatever goals you set for yourself, its main point is financial profit. Return on Ad Spend (ROAS) gives you a high-level vision. It shows whether you are losing money on your PPC campaign or making them.
If the rate is unstable, this allows you to track the situation in perspective. If the company consistently keeps a loss from contextual advertising, it should either completely redesign the campaign or invest in other advertising channels. A ROAS stable rise is essential for a company’s success and its image among potential investors and other interested parties.
Of course, the list of PPC advertising metrics for ecommerce is not limited to this list. Each campaign, depending on its goals, should have its own set of data tracking. Putting together a campaign for your business and optimizing it can be a tricky endeavor. Hiring an ecommerce PPC ads expert could save time and money.
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