Paid Search KPIs and Conversion Tracking

Digital Marketing - Study Notes:

The role of key performance indicators (KPIs) in paid search campaigns

Key performance indicators, or KPIs, should reflect your business goals and how they can be achieved online. KPIs for measuring the success of your search campaign include conversion traffic, awareness, and brand impressions.

Conversions

Conversions are those valuable actions that users take on your site, such as buying something or filling in a form. They can be direct conversions and assisted (view-through) conversions. We’ll look at these in a bit more detail shortly.

The success of a campaign can be measured in the number of conversions generated at a particular cost. This determines your ROI. And campaign KPIs can be set in terms of conversions because they are the metric that will align your campaign activity with your business objectives. Conversions are a really important metric to consider when choosing to spend more or less on a campaign to optimize performance.

The function of Google Ads is to drive qualified search traffic from users looking for your product or clicking your banner ad. This traffic can result in conversions if your site is optimized to user expectations and your offering is aligned with their needs.

• Generally, search campaigns drive direct conversions. In other words, people search, then click your ad, and buy or convert after clicking.
• On the other hand, display campaigns lead to assisted conversions. These campaigns ‘assist’ in conversions. For example, you show your banner ads to your target audience. They might then go ahead and convert or buy a few days or weeks later, rather than clicking on the banner then buying immediately. This is also known as post-impression or view-through conversions, and it measures your ads’ influence on a conversion.

Awareness

Another key performance indicator that you can use to measure the success of a campaign would be something like awareness. So, if you do a lot of wider searches, or broad searches, do you get your brand name out there? Can that then be attributed to things such as increases in brand searches?

If you need to drive awareness, building lists of relevant generic keywords will expand the reach of your offering beyond the people who already know and search for your brand. Generic keywords tend to have higher CPCs and lower conversion rates. This is why it’s important to measure the success of your generic campaigns in terms of reach and acceptable cost per conversion.

Brand impressions

A third KPI to consider is brand impressions. Brand searches tend to be low-cost and high-conversion types of keywords. However, for most businesses, brand impressions and clicks tend to be lower than generic searches. Therefore, driving a higher number of brand searches should be a goal of all organizations because, as your brand searches increase, you will get more low-cost conversions from your campaigns. This can also act as a de facto measure of your brand growth.

What is conversion tracking?

Now that you understand the important KPIs for paid search, let’s move on to conversion tracking. This is a way to measure valuable actions, or conversions, that people take after they click your ad. It could reveal, for example, the number of sales or leads generated from your ads. Google can measure this in different ways, the most common way (and usually the default setting on your campaigns) is data-driven measurement. This is where Google Ads looks at all customer touchpoints via digital marketing analytics tools like Google Analytics 4 for a conversion. It then uses this data to show the influence of your campaigns on driving overall sales or conversions.

Types of conversions

Most websites will have different conversions with different outcomes and values to the business. So what type of conversion are you going to measure?

• Is it the number of leads you’ve generated?
• Is it the number of purchases that have gone through the website from a click?
• Is it the number of phone calls that were generated through Google Ads?
• Is it the number of app downloads?

This means that you need to review your website to understand what a conversion is. It’s usually something that someone does that is valuable to your business. Take the time to review what valuable action can be taken on your site. How can you measure them?

Once you have taken note of all your valuable website actions, or conversions, you can set them up to be tracked in the system. And you can then link them back to, or attribute them to, a click and therefore a cost. This will help you determine ROI.

Benefits

So why should you use conversion tracking?

• It enables you to track the number of valuable actions taken by users back to the campaign and keyword.
• As your campaigns will have costs and generate other metrics, conversion tracking helps you to determine if the campaigns are profitable or scalable.

Adding conversion tracking to Google Ads

There are two main ways to add conversion tracking to Google Ads:

• The first and most basic method is to add a piece of HTML tracking code (found in the main menu) to the ‘thank you’ or confirmation page following a conversion. This is the page that shows after the customer contacts the team or completes a purchase. It usually says something like, “Thank you for your purchase!” This page is only ever displayed after a conversion, so every time it’s displayed, your tag on that page tells Google Ads that a conversion has happened.
• The other (easier and more useful) method is to import conversions and ecommerce transactions from other sources such as Google Analytics, or your Customer Relationship Management (or CRM) tools such as HubSpot, Salesforce, and so on. With ecommerce transactions, you can see which campaigns are driving most sales and revenue when you like your ecommerce store to GA4, while CRM imports enable you to track sales made by salespeople back to your campaigns.