How to track and measure Google Ads performance success?

Running Google Ads alone isn’t enough in today’s competitive digital battlefield. With every click carrying a cost, how do you ensure your campaign is not just seen, but driving meaningful results?

The answer lies in how well you can track and measure its success. Whether you’re trying to boost brand awareness or drive sales/sales; understanding the key metrics can help you transform your ad spend into a powerful growth engine.

Google Ads metrics such as clicks, conversions, CPA, etc. are the health indicators for your ad campaign. Data is gathered based on user interactions with your ad campaign, offering valuable insights to evaluate and, if necessary, adjust your campaign for improved results.

In this article, we will understand the importance of tracking the performance of your ad campaign, key indicators for measuring the performance, and methods to fix an underperforming campaign.

Let’s get started.

Table of contents:

1. Why is it necessary to evaluate the performance of Google Ads?
2. Monitor Conversions – Don’t set and forget
3. What to do if conversions are dropped?
4. Cost Per Acquisition (CPA) – You are blind unless you know this
5. Return on Ad Spend (ROAS) – Linked to revenue
6. Conversion rate – Compare with industry standard
7. Number of clicks – Determines the market share
8. Cost Per Click (CPC) – An integral part of your Google Ads journey
9. Ad rank – Aim to rank higher
10. Auction insights – Know your competition
11. Search term report – Understand the search intent
12. Best/Least performing keywords – Know what is working
13. Low/High CPC keywords – Keep track of your spend
14. Click-Through Rate (CTR) – Convert clicks to conversions
15. Impressions – Provide visibility
16. Keyword quality score – Improve this to lower your CPC
17. FAQ

Why is it necessary to evaluate the performance of Google Ads?

Google Ads doesn’t operate in a ‘set and forget’ mode, so monitoring your campaign’s performance is important. Tracking the performance of your ad campaign is vital for better campaign management, helping you build strategies to optimise Google ads, and boosting ROI.

Here’s why this is important:

1. Identify gaps: By looking at the information related to costs, conversions, and keywords and comparing it with industry benchmarks, you can identify the gaps in your campaign and take action accordingly.
2. Evaluate goals: It also provides insight into your current position in the market and how close you are to reaching your goals. It helps you understand the impact of your ad.
3. Refine Targeting: By analysing performance data, you can fine-tune your audience targeting, ensuring your ads reach the right people and increase conversion chances.
4. Adapt to Market Changes: Continuous monitoring lets you quickly adjust your campaigns based on market dynamics, customer behaviours, seasonal trends, or competition.

It is not just about looking at data in Google Ads, the real performance measurement is done when the raw data is analysed and compared to build insights and actionable items. This is only possible if you work with a trusted Google Ads expert with the knowledge, tools and creativity to take your business to the next level.

Monitor Conversions – Don’t set and forget

A conversion materialises whenever your ad fulfils its goal by encouraging the desired customer action – purchases, sign-ups, or downloads.

Google Ads conversion is one of the integral parts of Google Ads performance assessment.

If you don’t have conversion tracking working on your website then you might be just wasting your budget.

Conversion tracking provides valuable data to help optimise marketing strategies, improve targeting, and ultimately increase profitability by focusing efforts on what’s working.

You must monitor your daily, weekly and monthly conversions and assess if the conversion data aligns with your business objectives.

Even if you may be happy with your conversions, don’t be fooled that is the best you can get. Always compare with Google Ads conversions by industry.

To learn more about setting up conversion tracking, visit our dedicated page on how to set up conversion tracking in Google Ads.

What to do if conversions are dropped?

Part of Google Ads performance analysis and tracking is to ensure conversions are meeting the minimum required benchmark.

While increasing Google Ads conversions should be the main goal you need to pay special attention when conversions drop.

A sudden drop in Google Ads conversions can be an indication of a technical error. However, if the drop was gradual then you may need to assess the performance and consider external factors like season season or change in demand.

Cost Per Acquisition (CPA) – You are blind unless you know this

If you don’t know your CPA then you have heading blind.

CPA is the average cost for conversion. For example, if spending $100 on your campaign leads to 2 conversions, your CPA is 50.

Lower CPA means more cost-effective campaigns. This is especially important for small businesses with limited budgets and less familiarity with industry benchmarks or tracking expenses.

Several factors may impact your CPA such as:

• Ad Quality & relevance: High-quality and relevant ads tend to perform better with the audience, leading to lower CPA. Create and test multiple versions of your ads to see which ones perform best.
• Keyword selection: Bidding on selected and high-intent keywords is the best way to optimise the conversions to get a lower CPA. Use negative keywords to disregard irrelevant traffic.
• Competition: The level of competition for your chosen keywords or audience segments can drive up CPA. More competitors bidding for the same keywords typically results in higher costs.
• Landing page design: A well-optimised landing page that aligns with your ad content can significantly lower your CPA. Factors such as visuals, user-friendliness and a strong CTA contribute to a good landing page experience.

Read our dedicated page on what is a good Google Ads CPA to learn more about the importance of CPA and industry benchmarks.

Return on Ad Spend (ROAS) – Linked to revenue

Return on Ad Spend measures the revenue generated for every dollar spent on advertising. So if you spend $100 on an ad campaign that generates $300 in revenue, your ROAS would be 3.

ROAS can help you assess if your campaign delivers the expected revenue, relative to your spend. If it is underperforming, you can quickly adjust your strategy or halt the campaign to avoid losses.

ROAS vs ROI

ROAS is sometimes confused with ROI. It is important to note that ROI is focused on the net profit of the investment made after accounting for all expenses, not limited to advertising spend. ROAS, on the other hand, is focused on how much income your ad campaign brings relative to the amount spent on advertising.

Conversion rate – Compare with industry standard

The conversion rate indicates the percentage of website visitors through Google Ads who took a desired action, like purchasing, enquiring, or engaging with your content.

So, if 100 people clicked on your ad and 5 eventually bought the advertised product, the conversion rate would be 5%.

A higher conversion rate signifies that your ads are effectively attracting and being placed to the right audience taking the desired action. Comparing your conversion rates against industry benchmarks will help you identify the competition and effectiveness of your campaign.

The average conversion rate for Google Ads in 2024 is 6.96% and varies across industries.

Visit our blog to learn more about Google Ads conversion rate by industry and ways to boost your conversion rate and get the best out of your ad spend.

Number of clicks – Determines the market share

The number of clicks is a key measure of user engagement. A higher click count indicates a greater audience reach for your ad. A few clicks indicate an issue – your targeting is misaligned, your ad copy isn’t engaging enough or your campaign is limited by budget.

The number of clicks generated by different keywords can give you a better understanding of which keywords to target. Without clicks, you can’t get any conversions.

A click is a bridge between your user request and your response to it. To ensure that the bridge is completed by having a functional URL and a good landing experience.

By analysing clicks, advertisers can fine-tune their campaigns, boost ad relevance, and increase their likelihood of achieving higher conversion rates.

Cost Per Click (CPC) – An integral part of your Google Ads journey

Cost Per Click(CPC) is a pricing model used in Google Ads to charge advertisers each time a user clicks on their ad. It’s a crucial metric for advertisers as it directly influences both the cost and the effectiveness of advertising campaigns.

The CPC in Google Ads goes higher when more businesses compete for similar keywords to get more traffic to their website. Compare it with the average CPC by industry to validate if you are paying more.

How do keywords impact CPC?

The relationship between keywords and cost per click (CPC) in Google Ads is important for understanding how much you’ll pay for each click and the overall efficiency of your ad campaigns. Here’s how keywords influence CPC:

• Keyword Selection: When setting up a PPC campaign, advertisers choose specific keywords they want their ads to appear for. The relevance and competitiveness of these keywords significantly influence the CPC.

The more relevant your keywords are for your ad, the lower will be its CPC. Similarly, highly competitive keywords that are popular tend to have a higher CPC.

• Match Type and Specificity: Broad match keywords (those that match a wide variety of search terms) often have a higher CPC due to increased competition, as they trigger your ad more frequently.

Exact match or long-tail keywords, being more specific, tend to have a lower CPC because they attract a smaller, more targeted audience. This can also reduce unnecessary clicks and costs.

• Keyword Bidding Strategy: How aggressively you bid on keywords directly affects CPC. Higher bids will often place your ad in better positions but can also lead to increased costs.

On the other hand, careful bidding and optimising around lower-cost, high-relevance keywords can reduce your CPC while maintaining ad performance.

Google Keyword Planner is a free tool that you can utilise to discover new keywords related to your business and see estimates of the searches they receive and the cost to target them.

Read this article for some handy tips on how to reduce Google Ads costs.

Ad rank – Aim to rank higher

Google Ads uses “ad rank” to determine the ad position on the search engine results page (SERP). AdRank is determined by multiplying your maximum cost-per-acquisition bid by the quality score of your ad.

Impact of Higher Ad Rank: A higher Ad Rank means your ad is more likely to appear in a higher position on the SERP.

Boosting Ad Rank: Bids and keywords quality score plays a key role in determining the ad rank.

Learn more about how to increase Google Ads position and pay less.

Auction insights – Know your competition

Auction insights is a pre-built report in Google Ads that offers insights into other advertisers bidding on the same keywords as you. This can help you identify industry trends and patterns that can guide modifications to your bidding strategy or ad content to gain a competitive edge.

Some of the key metrics that are part of auction insights are as follows:

• Impression Share: The percentage of impressions your ads received compared to the total number of eligible impressions.
• Overlap Rate: The percentage of times your ads and another advertiser’s ads appear together in the same auction.
• Outranking Share: It indicates how often your ad ranks higher than a competitor’s ad in the auction.
• Position Above Rate: The frequency with which your ad appeared above another advertiser’s ad.
• Top of Page Rate: The percentage of your ad impressions that appeared at the top of the page.
• Absolute Top of Page Rate: The percentage of your ad impressions that appeared as the very first ad above the organic search results.

Auction insights help you analyse how your ads perform compared to other advertisers participating in the same auctions.

In the report above, competitor C has a lower impression share (13.93%), indicating that it appears less frequently in auctions compared to yours. However, its top-of-page rate is the highest at 96.04%, closely followed by competitor B. This suggests that both competitors B and C are aggressively bidding on the keyword to achieve better rankings, despite competitor C’s lower impression share.

As for the absolute top-of-page rate, competitor B appears as the first ad above organic results 7 out of 10 times. This suggests their bidding strategy is aimed at consistently securing a spot on the first page.

By leveraging this data, you can make strategic decisions to enhance your ad performance, reduce costs, and achieve better results.

Search term report – Understand the search intent

Search terms report is a Google Ad feature to find the search queries that trigger your ads. This enables you to identify relevant queries and keywords, offering valuable insights into customer behaviour.

For example, let’s say you run a bakery shop specialising in preparing custom cakes. So, while your keywords can be something like custom cakes, order custom cakes, birthday cake

Your search term report can look like birthday cakes for kids, custom wedding cakes, cheap bday cakes near me

The search terms report provides a clearer view of how users are searching for queries, which may be either broader or more specific than the keywords you are targeting.

These insights can help you adjust your keywords to target the audience effectively. Use negative keywords to exclude irrelevant searches and improve your targeting.

Best/Least performing keywords – Know what is working

As part of Google Ads performance measurement and tracking, you need to analyse your best and least-performing keywords. This is critical performance data that allows you to allocate the budget properly to get the best return possible.

This analysis also allows you to pause or remove the least or non-performing keywords to cut on spending and allocate to campaigns where you need the most.

Tip: Identify the high-performing keywords and try to incorporate them into your headline and main description.

Low/High CPC keywords – Keep track of your spend

Low CPC keywords generate more clicks at a lower cost, while high CPC keywords can quickly drain your budget.

When tracking and monitoring Google Ads performance, it’s important to keep an eye on both low and high CPC keywords, monitor their performance in terms of conversions, and pause any high CPC keywords that might be chewing the budget.

Click-Through Rate (CTR) – Convert clicks to conversions

This metric calculates the ratio of users who clicked on the advertisement to users who viewed the ad.

Mathematically it can be expressed as:

CTR (%) = (total clicks / total impressions ) * 100

For example, if your ad has received 100 clicks in 1000 impressions, your CTR would be 10%, i.e., (100/1000) * 100.

A higher CTR for Google Ads indicates that more people find your content relevant and interesting enough to click on the link, increasing the likelihood of driving potential sales. A lower CTR means that your content needs improvement.

Why CTR matters?

1. Analyse the effectiveness of your campaign: CTR helps you understand what is working well and what’s not with your campaign, and make adjustments to your campaign if needed.
2. Impacts Quality Score: CTR directly impacts your quality score, eventually impacting your ad placements and cost per click.
3. Measure Cost efficiency: By looking at your CTR, you can judge whether you are getting enough value against your spending.

Visit click-through rates by industry to compare with the benchmarks to gain more insight.

Impressions – Provide visibility

Impressions indicate the number of times your ad has been displayed to your target audience. A high number of impressions is a result of successful keyword targeting. Impressions play an important role when your goal is to enhance brand awareness.

Impressions vs clicks

Impressions are not the same as clicks. Impressions are counted when someone sees your ad, whereas clicks are recorded when someone actively engages with it by clicking on it.

High impressions suggest well-optimised campaigns for better reach. However, if those impressions are not translating into clicks, you could be targeting the wrong audience.

Tips to increase impressions

• Tailor your ads to target audience and keywords.
• Make your ads visually appealing using appropriate colours, images, and videos.
• Use persuasive language and a compelling call to action.
• Optimise your bidding strategy to ensure your ad is shown to as many people as possible.

Keyword quality score – Improve this to lower your CPC

Google Ads provides a ‘Quality Score’ for each keyword, ranked from 1 to 10. This score is determined by the three key factors:

• expected click-through rate (CTR)
• ad relevance
• the overall user experience of the landing page

This means that all these factors should contribute to a high-quality score. The higher your quality score, the lower your cost per conversion. Also, it boosts your overall ad ranking in the search results.

Note that your ad quality score is determined by historical impressions for exact matches of your keyword, so changing the keyword match types will not affect the Quality Score.

FAQ

How do I know if Google Ads are performing well?

To determine if your Google Ads are performing well, primarily look at key metrics like clicks, conversions, cost per click (CPC), CPA etc. If your CPC cost is within your reach and your conversions and ROAS exceed your minimum expectation then you can say your ads performing well.