Choosing Which Key Metrics to Track for Paid Media

So, How Do I Decide on What to Track?

Simple — you’ll first need to decide what matters to your business or the brand you’re working with. It’s important to align the metrics you’ll be observing with your overall campaign goals. 

For example, if your goal is brand awareness, you'll focus on metrics like reach and impressions, whereas, if you're aiming for lead generation, conversion rate (CVR) and cost per acquisition (CPA) become more relevant. 

By aligning these metrics with your goals, you can ensure that what you’re tracking directly contributes to achieving the best outcomes for your business. 

There can be an overwhelming amount of data to work with, not all relevant or useful for every campaign, so I’ve outlined a few key metrics worth tracking for most—if not all—paid media campaigns. I’ll briefly touch upon what they are, why they’re important, and what can affect them. Examples given will mostly be in rererence to Google Ads, but can easily be applied to other channels. 

Engagement Metrics 

Impressions

‘Impressions’ refer to the number of times an ad is displayed on a user's screen. Each time your ad shows up, whether or not it's clicked on, it counts as one impression. This metric is a basic indicator of your ad’s reach, and is a key metric to observe when measuring brand awareness. Impressions are important because they give you a sense of the visibility your ad is getting. 

Higher impressions mean your ad is being seen more frequently. High levels of exposure to ads can contribute to brand familiarity, meaning that even if users don't immediately engage, they’ll still likely be primed for future interactions, making them more likely to click on an ad or engage with a brand later on. This can be a subtle way of influencing your audience’s decision-making process.

On the other hand, too many impressions can lead to ad blindness, where users start ignoring repetitive ads, either consciously or subconsciously. This is often the case with paid social campaigns, in which you need to ensure you’re cycling through fresh ad creatives to avoid ad fatigue. 

What can affect impressions:

• Your budget is a primary factor — more budget typically leads to more impressions. 
• Targeting settings, such as audience demographics, interests, and behaviors —  ads that are narrowly targeted might generate fewer impressions because they’re shown to a smaller, more specific group. On the other hand, broad targeting can increase impressions but might reduce relevance to your audiences.

It’s important to note that impressions alone don’t tell the whole story; they need to be considered alongside other metrics like click-through rates (CTR) or conversions to get a more holistic evaluation of how your campaigns are doing.

Clicks

A ‘Click’ represents the moment a user interacts with an ad by—as the name suggests—clicking on it. After which, said user is directed to a landing page or another designated online destination. This metric is important as it directly measures user engagement, it indicates the ad’s effectiveness in drawing attention and prompting desired actions (more clicks!). Clicks are important because they help you gauge the relevance and appeal of your ads. A higher number of clicks typically suggests that the ad or ad copy resonates well with its audience. This can lead to increased traffic, conversions, and ultimately, a better return on investment.

What can affect clicks:

• The ad's design (ad creatives) or ad copy.
• The clarity of the ad’s call-to-action.
• The ad’s relevance to the target audience.
• The ad’s placement. 

Ads that are visually appealing, have a clear and compelling message that incorporates behavioural nudges, and are strategically placed when or where the intended audience is most active, are more likely to attract clicks. Some behavioural nudges that we’ve seen have a huge impact on user engagement, and that you might consider incorporating into your next optimisations, are:

• Scarcity and urgency with limited-time offers — “Act fast, 50% mega-sale now live”, “Limited time only - order now”.
• Social proof with testimonials and review — “4.8/5 Product rating on Feefo”, “Buy Griselinia hedging online with us & join 9,734 happy buyers rating our products 4.8/5”.
• Value proposition framing — “Save 20% on your first order”.
• Loss aversion with FOMO messaging — “Opportunity closing soon”, “This may be your last chance to be part of something bigger”.

Clicks should be observed in tandem with other metrics, particularly impressions. A large number of impressions with relatively few clicks might indicate that your ads are being seen but that they may not be engaging enough to prompt interaction. This could suggest issues with the ad's content, targeting, or even the platform where it's being displayed.

CTR

Similar to Clicks, CTR measures how often people who see your ads end up clicking on them. It answers the question of, “What percentage of the users who are shown your ads actually click through to a landing page?”. The CTR of a campaign gives you a clear sense of how well your ads are catching the attention of your target audience. The average CTR for Google Ads across all industries is 3.17% for Search ads and 0.46% for Display ads (Wordstream, 2024). If your ads are hitting or exceeding these benchmarks, then your ads are performing to industry standards. 

What can affect CTR:

• The ad's design (ad creatives) or ad copy.
• The clarity of the ad’s call-to-action.
• The ad’s relevance to the target audience.
• The ad’s placement.

Conversion Metrics

Conversions

‘Conversions’ are the specific actions that users take after they’ve interacted with your ads, such as making a purchase, submitting a lead form, signing up for a newsletter, placing a phone call, or downloading an app. Most PPC platforms allow you the option to set conversion actions and conversion goals. Google describes a conversion action as, ‘a specific customer action that you’ve defined as valuable to your business.’ This metric is important as it directly ties the success of your campaign to tangible business outcomes. 

What can affect Conversions:

• The content of your ads — whether or not the content within your ad copy is consistent with the product or service being offered. 
• Landing page design — if your ad is engaging but leads to a poorly optimised landing page, you may see plenty of clicks at a high CTR, but very few conversions overall.
• Landing page experience — slow page loading speed, confusing layouts, or having too many steps in the check-out process can discourage users from completing the desired action.
• Audience targeting — if you’re not targeting the right audience, even a well-designed landing page and expertly optimised ad copy won’t lead to a conversion. If your ads are shown to people who are not interested in or that don’t need your product or service, the conversion rate will suffer, even if your ad and landing page are well-designed.

Conversion Rate 

‘Conversion Rate’ (CVR) is a measure of the percentage of users who complete a conversion action after clicking on your ad. A higher CVR suggests that your ad content, targeting, and landing page are well-aligned with what the audience wants or needs. A lower rate could mean there's a disconnect somewhere in this chain. According to WordStream (2024), ‘the average conversion rate in Google Ads across all industries is 3.75% for search and 0.77% for display.’

What can affect CVR:

• The content of your ads. 
• Landing page design.
• Landing page experience.
• Audience targeting.

When analysing CVR, it’s important to keep an eye on any anomalies that might crop up. Sudden drops could signal issues with the ad platform, technical problems on the landing page, or changes in audience behaviour. On the flip side, sudden spikes might be due to external factors like promotions or seasonal demand rather than improvements in the campaign itself.

Conversion Value 

‘Conversion Values’ are monetary figures assigned to the conversion actions users take. This metric ties the performance of your campaigns to your revenue goals. It’s essentially a metric that lets you know how much money you’ve made from your campaign. By looking at Conversion Value, you can gauge the financial impact of your campaigns and evaluate whether you’re making a good return on investment.

What can affect Conversion Value:

• The quality of your targeting — better (keyword, location, and audience) targeting usually leads to higher-value conversions. 
• The nature of your product or service — some industries naturally have higher conversion values due to the price point of their products or services, as well as the lifetime value of a customer.
• The time of year — seasonal brands experience patterns of highs and lows throughout the year due to shifts in demand for products and services. During these periods they may see a spike or drop in conversion value. 
• Promotions, discounts, and deals.

Cost-efficiency Metrics

CPC

‘Cost Per Click’ (CPC) refers to how much you (and other advertisers within ad auctions) pay for each click on your ads. A lower CPC means you can get more clicks for the same amount of money, while a higher CPC means you’ll get fewer clicks for the same amount of money. 

What can affect CPC:

• The competitiveness of the keywords you’re bidding on — popular keywords with high commercial intent are usually more expensive.
• Ad Relevance.
• Quality Score.
• Time of day.
• Geographic location.
• The type of device being used. 

When monitoring CPC, it’s important that you consider both the short and long-term causes. A sudden spike could indicate increased competition in the ad auction, changes in user behaviour, or an issue with ad relevance. On the flip side, a consistently low CPC might suggest that your ads are highly relevant or that you've found a niche keyword set that isn't saturated (yet).

CPA

‘Cost-Per-Acquisition’ (CPA) is a measure of how much it costs to get a conversion. Essentially, this metric tells you how much you’re spending to achieve a specific conversion action, such as a sale or sign-up.  A lower CPA means that you’re acquiring customers at a lower cost, while a higher CPA means that you’re acquiring customers at a higher cost — the former is better than the latter. 

What can affect CPA:

• Competitiveness of the market — if the competition for ad placements is high, you might end up paying more per acquisition.
• The quality of your ad creatives and ad copy.
• Audience targeting.
• The campaign’s bidding strategy.

ROAS

‘Return on Ad Spend’ (ROAS) is a calculation of the revenue earned from advertising relative to the amount spent on advertising. For example, a ROAS of 5 means that, for every pound invested into your campaign, five pounds in revenue is generated. This metric linked the cost of running a campaign to the campaign’s effectiveness in generating revenue and thus provides a straightforward way to assess whether the money put into running a campaign is yielding profitable returns. 

What can affect ROAS:

• Ad (keyword, location, audience) targeting.
• Seasonal trends.
• Competition within the market.
• Economic conditions.
• Any conditions that impact consumer behaviour, really. 

Key Takeaways: 

• Measuring the effectiveness of paid media campaigns is essential for making the most out of marketing budgets and ensuring campaigns run successfully. 
• To accurately assess campaign performance, it’s important to choose metrics that align with your specific business goals, whether it's brand awareness, lead generation, or revenue growth.
• Not all data is equally relevant. Concentrate on key metrics like impressions, clicks, CTR, conversions, and cost-efficiency metrics (CPC, CPA, ROAS) that provide insights into the performance and impact of your campaigns.
• A data-driven approach enables continuous refinement of strategies, ensuring that each campaign is more successful than the last by learning from past performance.

This isn’t everything — if you’d like to find out more, speak to a member of our Paid Media team to find out how you can effectively run a successful PPC campaign. We’d love to hear from you!