What you see below is the PPC dashboard of an example resort chain. As part of their SEM activities they allocate some budget for PPC with Google AdWords.
There are two possible conversion points from the Google AdWords buy:
- The property search page, where the consumer can search for a resort property. A consumer clicking on the Google Ad and executing a property search is seen as a conversion
- The registration page, where a consumer’s registration after clicking through the Google Ad is counted as a conversion
The SEM team runs 3 campaign and produces the following report.
| Campaign | Impressions | Clicks | CTR | CPC | Cost | Property Search | Property Search Conv. Rate | Registration | Registration Conv. Rate | Pages/Visit | Avg Time on Site | % New Visits | Bounce Rate |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| C3 | 15,000 | 900 | 6.0% | $1.80 | $1,623.91 | 300 | 33.3% | 0 | 0.0% | 5.35 | 0:05:37 | 60.0% | 32.0% |
| C2 | 1,000 | 30 | 3.0% | $1.65 | $49.49 | 1 | 3.3% | 0 | 0.0% | 1.26 | 0:00:23 | 90.0% | 70.0% |
| C1 | 10,000 | 1,500 | 15.0% | $0.60 | $900.00 | 700 | 46.7% | 0 | 0.0% | 6.29 | 0:06:36 | 50.0% | 20.0% |
I have seen companies spend hundreds of thousands of dollars on PPC campaigns just relying on these metrics. If these are the only PPC metrics the Marketing team sees, then they are in trouble because this is insufficient to base any reasonable marketing decisions.
Let us see what questions this report answers by looking at each column:
Impressions
This metric tells you how many times Google showed your ad when someone searched your keyword. What that this perhaps shows is how popular the keyword you picked might be, but you kind of knew that already when you were setting up your keywords in AdWord. So independently this is not too useful unless used to compute a metric of a higher value. Usefulness rating: D
Clicks
Now this might feel valuable and a high number of clicks might get people excited. But lets say you end up with a 1000 clicks after you spend a million dollars and 10 clicks after you spend a 1000. In that case, is a larger number of clicks good or bad? Additionally, more clicks means more traffic to your site, but unless the value of more traffic is measured somehow, this metric independently isn’t as useful as it might seem. Usefulness rating: C
Click Through Rate
I have seen marketers think that a high CTR means their campaign is ‘working’. This metric is basically the number of clicks divided by the number of impressions, and it gives you a measure of effectiveness of your Ad. A higher CTR means your Ad is resonating better with your audience. A better Ad doesn’t necessarily mean a better campaign. This metric alone can’t tell you if a campaign was successful because it doesn’t tell how much of the clicks coming in are actually converting, impacting your top line or affecting your bottom line. Usefulness rating: B
Cost per click
This tells you how much AdWords charged per click. One might think this could be useful because you could estimate your spend with this and helps you set budget limits, right? So would you set your budget based on the number of clicks you want? Or is it a predetermined decision that the quarterly allocation for PPC is $X? If you had a fixed budget then, is a low CPC good? What if you put your $ on keywords with low CPC and you ended up with an overall lesser number of clicks than an keyword with a high CPC? All of these open questions make CPC a weak independent metric Usefulness rating: C
Cost
This tells you the total spend on the campaign. One might think this could be useful because you could estimate your spend with this and helps you set budget limits, right? But is your budget a predetermined decision that the quarterly allocation for PPC is $X? If you had a fixed budget then, is a low cost good? What if you put your $ on keywords with low CPC and you ended up with an overall low cost but also a much lesser number of clicks than an keyword with a high CPC? All of these open questions make CPC a weak independent metric Usefulness rating: C
And what is that number based on? . Now this might feel valuable and a high number of clicks might get people excited. But if you think about it what does it really tell you? Okay, it tells you how many people clicked on your ad, but lets you end up with a 1000 clicks when you spend a million dollars and 10 clicks when you spend a 1000, is a larger number of clicks good or bad in that case? Again, this metric independently isn’t very useful. Usefulness rating: D
1. What is the cost per campaign? This report answers this question well based on the cost column
2. What’s the conversion rate per campagin? This is also answered with the conversion rates shown
3.
Disagree with me?
Go on, post your thoughts!