7 Paid Ads Metrics to Track for Effective Campaigns

Paid Ads are faster to get started with, and they have a wider potential reach than any other lead generation strategy. When it comes to paid media, Google Ads, Facebook Ads, and LinkedIn Ads are the biggest players in the market.

According to Internet Live Stats, the latest data shows that Google processes over 99,000 searches every single second and more than 8.5 billion searches a day.

Despite the IOS updates, Facebook stays a viable platform for engaging with the consumer audience, with 2.963 billion users in January 2023. LinkedIn continues to be a lucrative platform, especially for B2B, with 900 million members and 58 million companies.

If you are contemplating whether your business should start capitalizing using Paid Ads, here are the top seven metrics to track.

1. Total Cost

Total cost refers to the entire cost of your ad campaign. It’s important to track the total cost of your ad campaign so you don’t go over budget. The overall cost depends on the ad host you use, how often you advertise, and the effectiveness of your advertisements. Knowing what you spent is good to know, but comparing your return on investment by ads channel is even more important.

2. Click Through Rate (CTR)

The CTR tracks how many people see your ad and the number of people that click on your ad. Click-through rates measure the effectiveness of your ad by dividing the number of clicks your ad gets by the number of times your ad is shown. This calculation results in a percentage that represents your click-through rate. For example, if you get ten clicks and 1,000 impressions, then your CTR is 1%.

Click-through rates depend on the type of industry you are in and the ad you are running. For example, the average Google Search click-through rate falls at 1.91%, while the average Google Display ad click-through rate falls at 0.35%. With click-through rates, higher percentages indicate that buyers find your advertisements relevant, so they get more attention. The CTR is a valuable metric that informs you what ads encourage people to engage with your content and at what ad cost you get the highest click-through rates.

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3. Impressions

Impressions refer to how many times your ad is shown on a search result page or website. Served impressions are the most common impression metric used. Served impressions count how many people saw your ad. Viewable impressions are another method of measuring impressions and offer more valuable data because it collects user behavior to optimize shown ads. However, most platforms use a served impressions model.

Impressions use CPM (cost per mille) to calculate how much you spend on each set of 1,000 impressions, which helps you understand how cost-effective different ad campaigns are. Impressions are valuable to know when calculating other metrics, like engagement rates. You can use impressions to compare how many people click (CTR) versus how many customers you acquire (CPA) through your advertisement. Overall, impressions are practical for brand awareness and measuring the effectiveness of your ad campaigns.

4. Conversions

Conversions are two-step progress measured with conversion tracking. First, someone has to interact with your ad (ex. clicking on a text ad). Then, the person has to take an action you have defined as beneficial for your business, like a purchase or item download.

Conversions are an effective method of measuring customer acquisition from your ads. Conversions reveal which platforms are the most effective for your ad campaigns. Additionally, conversions help estimate how many potential leads you have obtained after consumers interact with ads.

5. Cost-Per-Click (CPC)

Cost-per-click refers to how much you pay the ad host for each click your ad receives. The pay structure for cost-per-click is easy to implement and understand, as you only pay for each click your ad receives. CPC prices vary depending on the platform you use to host your ads. For example, Google Ads will use factors like quality score and ad rank to calculate the CPC of your ad.

CPC is an important metric to understand because you are not always in control of the price of your ad. To calculate your CPC, divide the total cost of your clicks by the total number of clicks.

While a lower CPC means you spend less for each potential customer, it also means there is a likelihood that your ad may not rank as high on search results. CPC uses your ad’s quality and ranking factor when recommending it to users. If you are starting to launch ads online, CPC is a beginner-friendly method for distributing and paying for your ads.

CPC is a crucial metric to consider when thinking about ad budget. CPC can get costly quickly, so you need to understand how many customers or conversions you can get with your budget to try and maximize your spending.

6. Cost-Per-Lead (CPL)

CPL refers to the cost of bringing in any lead. A qualified lead is someone who takes action that shows interest in your product, like downloading a whitepaper. CPL is an important metric because it shows how much it costs to get a lead who is genuinely interested in your product rather than someone with no intention of becoming a customer.

To calculate your CPL, take your total marketing spend and divide it by the total number of new leads. This will give you your cost per lead (CPL). For example, if you spend $1,000 on Google Ads and you get ten qualified leads, the cost per lead is $100.

7. Cost-Per-Acquisition (CPA)

CPA determines how much it costs, on average, for your business to acquire a customer. CPA is a crucial financial planning metric because it has a direct influence on revenue. Your primary goal is to lower your CPA, which will increase revenue. CPA indicates how efficient your ad strategy is and how much this design affects your bottom line.

The CPA is calculated by dividing your marketing cost spent by the number of new customers acquired. For example, if your marketing cost is $1,000 and your number of customers is ten, your customer acquisition cost would be $100.

How do you plan paid ad campaigns?

You have a team of experts behind you who can ensure the paid ads part of your funnel is optimized and brings in qualified leads and customers. The Rutkin Marketing team is ready to help you set up an ad campaign and track these metrics for you. Schedule a free 30-minute consultation today.