Monitor Your Google AdWords Performance

To realize the greatest return on investment (ROI) with Google AdWords, you must regularly review how your campaigns are performing and optimize your conversion rate (CRO). Optimizing AdWords campaigns is a constant practice.

Maximizing ROI by Understanding Performance and Refining Campaigns

In order to maximize your ROI on any Google AdWords campaign, you must understand it and be able to compare its performance with your initial goals for this campaign. Once you have compared a campaign’s actual performance with the pre-defined goals that were set for it, will you be able to refine the it and maximize the ROI. To do this, you will need to use key performance indicators (KPIs).

– Defined KPI’s Monitoring & Reporting

Key performance indicators (KPIs) are quantitative measurements that show how well a campaign is performing. These can easily be compared with pre-defined goals, to see whether a campaign is meeting expectations.

Because different types of websites have different goals, KPIs differ from one website to another. For instance, an ecommerce website’s KPIs may focus on how many products are purchased, how many items people place in their shopping cart and the average value of a purchase, while a content-oriented site’s KPIs may measure how many subscribers there are, how many people have watched a video and how many players have tried a game.

Depending on what type of website you run, you may find some of these KPIs insightful:

  • Spend: your budget for ads
  • Quality score: a scorecard from Google for both ads and landings pages that shows how relevant and useful Google thinks these are to people
  • Click-through rate (CTR): the number of clicks divided by the number of impressions, expressed as a percentage
  • Conversion rate: the number of leads or sales (conversions) divided by the number of visitors generated through PPC, expressed as a percentage
  • Conversion rate per medium: each medium’s own conversion rate
  • Return on ad spend: the ROI of your advertising budget
  • Cost per lead: how much each quality lead generated by a campaign costs (quality leads are not sales but promising prospects)
  • Profit: revenue less expenses, including advertising and product costs, and overhead
  • Lifetime value: the value of a customer’s sales over your business’ lifetime
  • Cost per transaction: the cost incurred per transactions of specific campaigns (e.g. newsletters, AdWords, banners, etc.)
  • Average transaction value: the average value of each individual transaction
  • Average items in basket: the average number of items purchased in a transaction

KPIs take the guess work out of managing advertising budgets. Because these are all quantitative measurements, they make comparing different marketing strategies simple. Placing campaigns side-by-side lets everyone see which campaigns are more profitable and which are less profitable. Adjustments can then be made accordingly.

– Adjusting a Campaign to Meet Goals

After analyzing all relevant KPIs, adjustments can be made to a campaign to improve its performance. Adjustments may include improving banners or ads in hopes of improving the CTR, adjusting budgets and bids to maximize on a campaign with a high ROI, redesigning a landing page for a better user experience, or focusing on specific mediums. These are only a few adjustments that can be done. The adjustments that should be made vary from situation to situation, which is why the KPIs must first be examined to understand your specific situation.

While the solution varies from situation to situation, it is important for every company to monitor how their campaigns are performing. This will help you eliminate ineffective campaigns and capitalize on the most effective ones. In short, it will help improve your advertising’s ROI, increase conversion rates, see more sales and achieve a higher revenue and profit.

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