Monitor just 4 AdWords metrics for a dynamite Adwords campaign.

You're not sure if your Adwords campaign is worth what it costs. You can get totals for impressions, clicks, ctr and loads of other things but you don't know which numbers are significant and which can be ignored.

Wouldn't it be great if you were 100% sure that using Adwords was right - or wrong - for your business?

Sadly while Google gives loads of stats, they don't tell you what they really mean to you.

There are four numbers in your Adwords account which will tell you if you've set your campaign up correctly and if it's running well enough. They'll let you know if Adwords is a good fit for your business.  If you don't have time to monitor every other performance metric watch these like a hawk.

1. Quality score

Quality score is Google's way of telling you how relevant they think your keywords, ad copy and landing pages are to what the searcher wants. If about 70% of your keywords have quality scores of 7 or better you're doing OK. Don't worry too much about the odd low scores but if you've got a high proportion of keywords with a quality score of 1, 2 or 3 you've got a problem.

2. Conversions per 100 impressions

This number tells you how relevant potential customers find your keywords, ad copy and landing pages. How well the combination of adverts and website turn strangers into customers.

It's easy to get lost asking only about the CTR and not thinking about how many of those clicks turned into customers. A fantastic campaign sending shedloads of visitors to a hostile website is as useless as a great website with no visitors.

Google won't give you this number automatically, you have to work it out for yourself.

It's the reciprocal of click through rate (1/CTR) multiplied by the conversion rate.

In MarketingMotor (my Adwords-based lead generation service) we work on a target of at least one conversion (sales lead) per 100 impressions.

Here are a couple of examples of how you'd get 1 conversion per 100 impressions.

  • 1 / CTR of 10% X conversion rate of10%
  • 1 / CTR of 5% X conversion rate of 20%
  • 1 / CTR of 20% X conversion rate of 5%

3. Cost per conversion

This is what you pay Google for each new customer they send your way. You can work this out buy dividing the total cost of your ads by the number of new customers or you can use Google's conversion tracking system. As long as you make more profit per customer than what it costs to get that customer your campaign makes economic sense.

In theory you should use the lifetime value of the customer (how much money you'll make from them over the time you do business with them) but that's almost impossible to calculate till you've had a big enough customer base for a few years. In practice it's easier to look at the value of that first sale and apply a bit of common sense to it. If profit is a clear winner then it's easy. If it's neck and neck you need to evaluate it more carefully.

4. Daily budget

The daily budget controls your monthly bill. Your ads might be profitable but you still have pay for them - possibly before you've been paid for the sale. Your monthly bill will normally be the daily budget X the number of days your campaign is active. It needs to be high enough to interest Google or your ads won't be shown. My rule of thumb is that the daily budget should be at least 20 X the average cost per click. It's better to run your campaign for a few days every month with a high enough daily budget than to try and run it every day with a tiny budget.

© Peter Bowen 2017 | Isle of Wight

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