Key SEM Metrics To Track And Improve

You can't run a successful marketing strategy without making some changes along the way. The only way you can know what to improve and discard in any marketing strategy is to keep a close eye on critical metrics. Performance tracking on key SEM metrics is crucial for any successful SEM strategy, especially PPC, because you have to invest money to get some measurable results.

Pay per click and cost per click campaigns can be costly, and if you don't get the expected results, you might end up losing your entire investment. That can be a massive problem for any business, especially small businesses running on a tight budget.

The only way you can make sure that that doesn't happen is by understanding and tracking key SEM performance metrics. That way, you will get a better idea of what needs improvement to ensure that your ad impressions provide the results you want.

Read on to learn the most important metrics that give you the most insight into your PPC campaigns. Find out how to improve your website's click-through rate with these useful tips.

Key SEM Metrics

It would be great if you have enough time to invest in every metric one by one, but if you don't, here are the key SEM metrics you should constantly track and monitor to get the best results.

Quality Score

The first and most important SEM metric to consider is the quality score. It's critical because Google uses it to measure the relevance of your keywords. The goal is to ensure that all searches are tied with relevant ads to make the entire browsing experience better. It's determined by several factors, including:

  • CTR or the click-through rate of the keywords you use and the ads that follow
  • How relevant the keyword and the ads are when compared to the search query
  • The relevance of the keywords you use compared to the correlating ad group
  • The click-through rate of the display URLs in the right ad group
  • Your landing page quality

All of these factors determine your Google Adwords quality score, as Google calculates your ad ranking and your PPC campaign price based on your results. So, in reality, the better your metrics are, the less you have to pay for every click.

Important PPC metrics - quality score

If your Quality Score is between 7 and 10, you will pay less money to advertise your services using Google Ads. Everything less than that will increase the price for every click. It's as simple as that.

How To Access Quality Score

But before you can improve anything, you have to establish a baseline for your score quality. Here is how you do that:

  • Sign in to your Google Ads account
  • Find the most relevant campaigns and correlated ad groups
  • Find the Keywords tab
  • Select "Customise columns" found on top of the ad table
  • Select "Show Quality Score" in the drop-down menu
  • Hit "Done."

How To Improve Quality Score

There are a few things you can do to improve your quality score. First of all, group your keywords together to get a higher score. You can also improve other details like the click-through rate, your ad's relevance, and the user experience of your landing page. By improving your Google AdWords impressions, you will get a better CTR.

Every keyword used will have its own Quality Score. Take your time and review every keyword one by one until you get the best scores, and you will be able to lower your Google AdWords cost per click.

Click-Through Rate (CTR)

Your cost per click on Google largely depends on the click-through rate or CTR. This metric measures how many clicks you get on an ad per number of impressions. For example, if your ad has 600 Google AdWords impressions and it gets 60 clicks, your CTR is 10%. High CTR means that your ad is relevant and helps users find what they need.

CTR is critical for your overall Quality Scores. It gives you a better understanding of whether or not your ads are relevant to users. If your CTR scores are low, you must improve your keywords or your ads. Implement some creative keywords, and the overall score will go up.

Average CTR Across All Industries

The average CTR is different for every industry. According to Wordstream, dating and personal services have the highest average CTR of 3.40%, while other industries like legal services and eCommerce platforms have an average CTR of 1.35% and 1.66%. However, the lowest CTR is 0.14% for potential job searches. In other words the average CTR largely depends on the type of services and products offered.

How To Access CTR

You can access your CTR at any time in the dashboard of your Google Ads Account. Here is how you do that:

  • Sign in to your Google Ads account.
  • Select "Keywords" on the left page menu.
  • Check the CTR column to see how your ads are doing. If the CTR is too low, remove the keywords you use and insert new ones. Make sure that you check the CTR regularly and make changes according to the results you see.

Important PPC metrics - CTR

How To Improve CTR

No matter if you like the keywords you use or not, the click-through rate is critical for your PPC campaign success. It has a direct effect on your Google AdWords Quality Score, which affects how much you have to pay for every click. The good news is that you can improve your CTR with a few tricks and help increase your Quality Scores while decreasing the cost for every PPC. Here is how you do that:

  • Include countdown timers and similar details that generate urgency to promote a higher CTR. That way, people will feel that they have to click on the ad to see what it's about before the timer runs out.
  • Use available extensions to make your ads more visible.
  • Include the main keyword into your ad's URL. That will help rank your ads and help display them to the people looking for that specific keyword.
  • Include a call to action to get more clicks. This one may seem obvious, but many ads miss that critical feature.

Conversion Rate

The conversion rate of your ad tells you how many people followed through with the action you need on your landing page. In other words, it's the total number of users that were so interested in your ad that they followed all of the steps until the end.

The conversion rate is critical because it tells you if your ads are working or not. Paying a lot of money to get thousands of clicks is useless if the viewers don't complete your desired action. If your conversion rate is high, that means that the money you spend on pay per click and cost per click will come back to you as profit. Low conversion rates mean that you need to improve your ad.

Now that you know how and why conversion rates are important, you also have to know how to calculate them.

How To Calculate Conversion Rate

It's a simple math problem where you have to take the number of conversions and divide it by the number of interactions that led to conversions. Let's say that you have 100 conversions out of 1000 visitors. That means that your conversion rate is 10%, as 100 / 1,000 = 10%. Every conversion rate between 2% and 5% is considered a good conversion rate.

How To improve conversion rate

You can do that using a few different tactics. Here are a few good ideas:

  • Add a pop-up to your website. Pop-ups raise the average conversion rate by at least 3%, but if you do things right, that percentage can go all the way up to 9%. You can do that by experimenting with different offers, placing delay timers on the pop-ups, making sure that they are easily closed, and setting up cookies that allow pop-ups only to first-time visitors.
  • Keep your forms as short as possible. Let's be honest; no one likes filling out huge forms with dozens of questions. If your goal for your visitors is to fill out forms, make sure that you remove all unnecessary fields and keep only the most essential ones.
  • Include testimonials, reviews, and logos. If a visitor arrives at a website without any user reviews or testimonials, the chances are they will just close the website. Social proof plays a major role in increasing conversions, so make sure you implement it on your landing page.
  • Make the first step as effortless as possible. Instead of bombarding your visitors with questions and forms, keep things simple. Request their email addresses first, and after they provide them, follow up with forms to get more information. If they don't fill out the forms, you will still have their email.
  • Improve your CTA copy. Using the standard CTAs like "Start trial" or "Sign up" doesn't provide the best results. Experiment with different CTAs until you find the one that works best. Start your CTAs with the word "Yes," and your conversion rate will go up instantly.

Impression Share

The Impression share of your ad is also a key part of any successful SEM campaign. Impressions occur every time someone looks at your ad. So, it's not the number of clicks your ads get; it only tells you how many times someone looked at your ad.

It's important because it helps you raise awareness for your brand, and it also helps increase your brand's value. While the total number of impressions you get from a campaign doesn't tell you if the campaign is successful or not, it does give you a good idea of the effectiveness of your ad.

Google ads impression share can help you understand your ad reports better because they give you a good idea of how many people saw your ad.

That insight is very valuable, and it can help you understand what your competitors are doing right. For example, if you have a 30% share of a keyword you used, that means that your competitors own the remaining 70%.

The only way you can snag a part of their pie is to invest more in every PPC campaign. Of course, we should note that the impression share is largely dependent on your budget. Keep in mind that Google also takes into account your quality score, bidding, and CTR when calculating impression share. Keep in mind that your success depends on your budget. In other words, you will have to outbid your competitors to get a higher impression share. But don't just rush into it. Consider your budget and increase the impression share only if you can handle it. The money should return through increased revenues with more impression shares, but you never know.

How To Access Impression Share

Here is how you can check your ads Impression Share:

  • Sign in to your Google AdWords account.
  • Select the "Campaigns" tab.
  • Click the "Columns" button located above the stats table.
  • Select "Modify columns."
  • Select "Competitive metrics" and select the Impression share columns.
  • Hit "Save" and the data on your Impression share will appear in the stats table.
  • You can download the data in any format by clicking on the download button.

Important PPC Metrics - Impression Share

There are two different ways you can lose your impression share (IS) – Budget and Rank.

How To improve Impression Share Lost due to Budget

In this case, your IS that was lost due to your budget is actually the percentage of time when your ads couldn’t be seen on the Display Network since there was an insufficient budget. A good remedy is to increase your budget accordingly.

How To improve Impression Share Lost due to Rank

When we consider this scenario, we are talking about the time when your ads couldn’t be found on the Search Network since you do not have a good Ad Rank. You can solve this by going back to the drawing board and work on keyword quality score as well as click through rate.

Cost Per Click (CPC)

The average cost per click tells you how much you are paying for one click on your ads campaigns. In other words, you will get a better understanding of how much you pay when one person visits your website.

The cost of pay per click advertising on Google can give you a lot of useful information. It can help you get a better understanding of how much an individual keyword costs, as well as the difference in the prices between using a specific keyword, campaign, ad, or ad group.

The quality score cost per click largely depends on the keywords you use. For example, some keywords that are more popular than others cost more. If you decide to use them, you could be paying too much to get the same results you would get by using another similar keyword.

CPC can help you get valuable insight into how much keywords cost, allowing you to determine how much money you need to invest in getting the desired results. If you're happy with the 2nd or 3rd place in the rankings, you should lower your bids. Everything depends on how much money you're willing to invest in your Google Ads.

Furthermore, Google's cost per click can also help you find out which ads or keywords need changing if the cost of every click is too high. It's a trial and error process that needs some time and practice to master. Once you understand how exactly things work, you will be able to lower your CPC and still get enough Impressions to run a successful ad campaign.

How To Access Average CPC

You can see your average CPC costs by doing the following:

  • Sign in to your Google Ads account.
  • Select the "Campaigns" tab.
  • Click "Columns."
  • Find the average CPC by looking at the "Avg. CPC" column.

Important PPC Metrics - CPC

How To Improve CPC

Now, we finally get to the question of how you can improve your average CPC. Here are a few quick tips to go by:

  • Optimise your campaigns using long-tail keywords. They are not as popular among ads, so they provide an excellent option for ranking your ads better.
  • Use negative keywords. Negative keywords can help you eliminate users searching for that specific keyword. Set up a few keywords that will practically block your ad from showing up, making sure that it appears only on sites that match with your content.
  • Create tightly themed ad groups. By this, we mean that you should structure the keywords and ad groups you use based on the products and services you want to promote. Separate the ad group for every product and select the best keywords and landing page for each group. As a result, your Quality Score will increase, and your cost per click will go down - a win-win situation.
  • Use ad scheduling. By doing so, you can pick the date and time when you want your ads to appear. If you leave the campaigns active 24/7, you will most likely lower your ROI. Pinpoint the time when your customers are most active, and place your ads accordingly. That way, you will get a better shot at engaging your target audience and lower your CPC in the process.

Cost Per Action (CPA)

CPA or cost per action is a metric that tells you how much you spend to get a conversion. It depends directly on your Quality Score, as well as all other metrics we mentioned. For example, if your quality score is above 5, your CPA will drop by about 15%.

Over time it can make a huge difference in your budget, so it's always a good idea to keep track of your CPA. Generally speaking, your CPA is always higher than your CPC because your visitors will often fail to follow through with the action you expect. That includes filling out forms to create leads as well as making purchases.

The CPA is very important because it allows you to measure the effectiveness of your content. You will get a clear picture of how many conversions you got because of the content you use, or in other words, your overall cost per acquisition.

CPA can help you control your ad spending for specific marketing objectives since you will be charged only when a visitor completes the action you wanted. In practice, it will provide you with more control over tracking each ad and help you get the most out of the investments you made.

You can see which marketing channels work best and eliminate those that don't provide the best results. Even if you don't eliminate all marketing channels, at least you will know where to invest more to get a better return.

Cost per action depends on the number of clicks your ad gets before a single conversion happens. You can calculate it by dividing the total money you invested in a campaign with the number of acquisitions it generated. If you find it hard to get those numbers, you can also use Google ads to get accurate results.

How To Access CPA

Here is how you do that:

  • Sign in to your Google Ad account
  • Find the total sum you invested in a campaign.
  • Divide that number with the number of conversions made.
  • The resulting number is your CPA.

How To Improve Your CPA

There are a few things you can do to improve your CPA. First off, you have to make your audience curious about your offer. They have to be interested enough to follow through with the action you need. Second, a simple landing page with the right information can help you boost your CPA really quickly.

The landing page has to be very easy to navigate and convincing enough to make visitors buy your services or products. You could spend more money on getting more clicks, but without conversions, you won't get anywhere. The number of conversions will determine if you will return your investment or not.

Customer Lifetime Value (CLV)

CLV or customer lifetime value tells you how much money a customer will spend on your products and services in their lifetime. It gives you an estimation of how much money you can expect to earn from each customer.

Customer lifetime value is important because it gives you a better idea of how much money to invest in attracting new customers while keeping the ones you already have. Investing more than an average customer is willing to spend will have a negative impact on your profits.

When you know your CLV, you can determine some other important factors. For example, you will know how much you can spend to attract new customers and still make some money. You will also get a better understanding of the types of products that have the best CLV.

That will immediately tell you which products are the most profitable, and also help you figure out the type of clients that spend the most money on your business. When you combine all of the information you get, you will be able to make better decisions in the future, which will lead to higher profit.

Customer lifetime value

How To Calculate CLV

There is a method you can use to calculate your CLV, and it goes like this: multiply the average value of purchase with the number of times the customer makes purchases every year. Then, multiply that number with the average length of the customer relationship. The resulting number will tell you how many years of client-to-customer relationship you can expect.

How To Improve CLV

If your CLV is not as high as you would like, there are a few things you can do to improve it. Here are a few useful tips:

  • Allow your customers to return the items they've purchased without any complications. If you make it hard for them to do so, that will affect the odds of you making a sale in the first place.
  • Set delivery date expectations higher than you need. Leave a few days more than you need to make a delivery, so you can beat the deadline by a few days. That will make you look like you care about every customer.
  • Set up a rewards program. Doing so will motivate your customers to repeat purchases. Just make sure that the rewards are desirable and attainable.
  • Offer free items to build up your brand's loyalty. You would be amazed at how much success you can have with a small giveaway.
  • Stay in contact with your customers. Building a strong relationship with your customers is a must. One of the best ways to do that is to remind your customers that you're thinking about them regularly. They will feel special and become more willing to reach out to you.

Return on Ad Spend (ROAS)

ROAS is another useful marketing metric that tells you how efficient your digital ad campaigns are. You can use this metric to find out which advertising methods work best, allowing you to get a clearer view of what needs improvement in the future.

ROAS is also an important SEM metric that affects your Google AdWords quality score. You can use it to evaluate your ads and figure out exactly how much they contributed to the online store's total sales. When you combine those numbers with CLV, you will be able to make accurate future budget predictions as well as useful information for future strategies and marketing direction.

Return of ad spend (ROAS)

Monitor your ROAS as closely as possible because it will enable you to make informed decisions and figure out which ads to invest in and how to make them more efficient. You can calculate your ROAS by dividing your total conversion value by your total advertising costs.

Wasted Spend

All of the clicks you paid for, but that didn't lead to conversion, are called wasted spending. It's what can destroy your ROI if you're not careful. While you can't eliminate wasted spending completely, you can do some things that will minimise your losses.

The best way to do that is to use negative keywords to eliminate mismatching before it ever happens. Negative keywords act as a filter for your traffic. They can help you make sure that your ads are clicked on only by relevant traffic, cutting your expenses in the long run. Paying for keywords that don't lead to conversions is simply a waste of time, money, and budget.

Bonus Round Tips

When you learn how to read all of the key SEM metrics we mentioned, you will be able to increase your website's conversion rate and get the most out of every ad campaign. You can use some other available tools to improve your marketing campaigns even further.

That includes the use of Google Analytics that allows you to see details such as how long your visitors stay on your website. You can extract more information about your users and their interests, allowing you to create more effective ads.

Conclusion

All of these key performance indicators work together. That means that you have to consider each one to come up with an ad campaign that provides the most conversions. You can't focus only on AdWords cost per click or ad impressions; all of them are equally important.

For example, you can't have a high CTR and a low Google Quality Score because they work in synergy. But if you improve your CTR, you can only expect to get a higher Quality Score, which will then impact other metrics, including CPC and CPA. That will make your PPC campaigns more profitable for customers with a long CLV.

When we consider everything, the bottom line is that you start improving your ads at the level of clicks, but you must make sure to keep an eye on all key SEM metrics, instead of focusing on just one.

Review your Google AdWords quality score regularly and remember to check all KPIs to get a complete overview of what's going on. With a little patience and practice, you will be able to increase your conversion rate and make your ad campaigns much more efficient. Practice makes perfect! If you want to make sure that your ad campaigns are in tune with the latest trends, reach out to us, and we can help you boost your conversion rates with expert advice!

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Xavier Tan
Co-Founder
Xavier is the Co-Founder of Heroes of Digital. He started social media marketing and SEM long before it became popular in Singapore. His passion is in helping businesses grow through effective lead generation. He has overseen campaigns for Amara Hotel, NTU, Marina Bay, L'Oreal, and 100+ SMEs.

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