Measuring PPC success can be challenging when teams lack clear, actionable metrics.
Without the right KPIs, it’s challenging to know whether your paid media campaigns or business initiatives are truly performing.
This lack of clarity can lead to misaligned goals, wasted efforts and missed opportunities, leaving teams confused about what is and isn’t working.
By focusing on the right KPIs for both paid media and overall business success, you can create alignment, drive performance and achieve measurable growth.
Here are five KPIs for each area that will help you stay on track.
1. Cost per click (CPC)
Formula:
CPC = Total cost / Total clicks
CPC doesn’t directly show bottom-line performance but can be a useful early indicator of factors affecting your paid media campaign.
A rising CPC may suggest increased competition and more bids on your target keywords.
This helps you assess how well you’re maintaining your position in the market and holding up against competitors.
While not a main KPI, CPC is helpful for gauging keyword competition and adjusting your targeting strategy as needed.
Track CPCs over various periods of time (e.g., week over week, month over month, quarter over quarter, etc.).
This lets you:
Understand changes in competition and general search engine results page (SERP) fluctuations over time.
Provide a window into seasonality, improved interest or increased competition to become proactive in maintaining presence rather than reactive to competitive fluctuations.
2. Impression share (IS)
Formula:
IS = Total impressions / Total available impressions
Impression share is not always a top KPI, but it offers useful insights into ad performance. It shows how well your ads compete in the marketplace, especially when combined with other data.
A low impression share could mean your ads are limited by budget (check auction insights) or low quality (check CTR and quality scores). While not enough on its own, it’s a helpful metric to guide optimizations.
Impression share “lost to rank” could suggest a need for improved ad quality or higher bids.
Impression share “lost to budget” could highlight the need to assess budget allocation and make sure you are cutting irrelevant spend.
Dig deeper: Setting PPC goals: How to tailor KPIs and metrics for each funnel stage
3. Click-through rate (CTR)
Formula:
CTR = Clicks / Impressions
CTR is a simple metric, but it reveals a lot about the performance of your paid media campaigns.
At a high level, it measures engagement and shows if your targeting, messaging, landing pages and offerings meet audience needs.
A high CTR means your messaging is resonating, while a low one suggests adjustments are needed.
By analyzing CTR at the keyword or audience level, you can identify top-performing segments and eliminate weaker ones to optimize ad spend and scale performance.
Set your CTR-based KPIs by examining your historical averages to understand what has worked/has not worked in the past and combining them with current research. Using context from both past and present will allow for more realistic future goal setting.
Dig deeper: The fallacy of CTR as a KPI: Redefining PPC ad success
4. Cost per acquisition (CPA)
Formula:
CPA = Total cost / Acquisitions
Setting KPIs for CPA depends on how you define an “acquisition.”
It’s helpful to have multiple acquisition stages to track performance across the entire user journey.
Measuring CPA at each step gives a clearer picture of efficiency. If you only measure the top-level conversion (like a form submission), you miss insights from later stages.
For example, a high cost at the top of the funnel with a lower cost at the bottom can still mean success, as it reflects higher-quality conversions.
Ultimately, CPA helps you understand how effectively we’re using ad spend and where you can scale our efforts.
Set CPA targets using both historical data and product details.
Historical performance shows what’s realistic based on past success.
Product info – such as price and sales costs – helps determine what you can afford to pay for an acquisition while staying profitable.
5. Conversion rate (CVR)
Formula:
CVR = Conversions / Clicks
Conversion rate tracks how many users take the desired action at different stages of the funnel, from clicking an ad to making a purchase.
Measuring CVR at each stage helps identify where prospects drop off, which could point to issues like misaligned messaging or friction in the user experience.
For example, low early-stage conversion rates may indicate a need for nurturing prospects before pushing for a conversion.