Dig deeper: Setting PPC goals: How to tailor KPIs and metrics for each funnel stage
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Advanced PPC metrics
I mentioned a few above, but some advanced metrics include:
Return on ad spend (ROAS): Advertising cost divided by conversion value.
Gross profit: The amount of gross profit you make for each sale.
Profit on ad spend (POAS): Advertising cost divided by gross profit.
Lifetime value (LTV): The average value of each user who makes a purchase.
New user acquisition: The amount of new customers generated.
Returning user %: The proportion of returning users to your website.
Brand recall: The % users who can remember your brand from a surveyed group.
All of the above can be linked to a common business objective, which can then be translated into advertising goals.
Some metrics are more challenging to obtain than others — for instance, Google requires a minimum spend of $5,000 on YouTube ads over a 10-day period just to ask one question for its brand lift measurement.
However, only the appropriate metrics are needed for relevant performance analysis.
To elevate your performance analysis, you must shift from relying solely on Google platform data to incorporating a mix of other platforms for a more holistic view.
Google Analytics 4 is an obvious supplemental tool, but you can also use third-party attribution or management software like Triple Whale, Profit Metrics, SMEC and Optmyzr for deeper insights.
While this isn’t always necessary, it becomes a valuable option if your account is large and performance analysis is a collaborative and regular exercise prioritized by the client – especially if Google data alone isn’t trusted.
For instance, Google now tracks lifetime value within the account. However, if tracking was recently installed, it may take time to build accurate data on customer value. More mature and holistic data from other platforms may be used instead in such cases.
Dig deeper: 3 PPC KPIs to track and measure success
Business objective = advertising objective
If expanding the customer base is one of the advertising objectives, identifying and evaluating LTV and new user acquisition will be essential.
Accurate data is critical, so many look beyond Google tracking. When you’re confident in your data – whether for reporting or optimization – it provides the necessary context for performance analysis.
For example, if a customer’s LTV is around $5,000 and the is on focus on acquiring new customers, metrics like conversion value and ROAS become less relevant.
A campaign targeting only new user acquisition might have a ROAS of 100%, which, at first glance, isn’t great since you’ve only generated the same amount you spent.
However, with an average order value of $500 and an LTV of $5,000, your actual ROAS is closer to 1,000% when determining the customer’s future sales.
Accurate evaluation of LTV, combined with precise new user acquisition data, helps achieve your campaign objectives. It also helps identify a target “New User ROAS” that you can regularly analyze and optimize at the campaign level.
If profit is the client’s priority objective, metrics like conversion value and ROAS become less important during performance reviews.
You might have a campaign that generates a 1,000% ROAS (like the example above), but it turns out the client’s margins are very low, and they actually incur a loss with a 75% POAS (where 100% is break-even).
In contrast, another campaign might generate a 500% ROAS, but because the products have better margins, the POAS is 150%.
Without context, anyone analyzing the account would recommend allocating more budget to the first campaign since it achieved double the ROAS.
However, with the business objective in mind, the second campaign would be identified as having the greatest growth opportunity, given its double POAS.
Make your PPC performance analysis more meaningful
When analyzing and reporting on PPC performance, the objectives must remain at the core.
Foundational metrics are important, but clients and businesses often fixate on them during performance discussions. Instead, the focus should shift to advanced metrics that better show whether the advertising channel is achieving its goals.
Too much focus on clicks, impressions and average CPC diverts attention from what truly matters. This can also affect how campaigns are managed, risking a misalignment of priorities and drifting performance.
It’s the account manager’s responsibility to guide clients toward the metrics that matter.
Build your reports and dashboards around relevant KPIs that support the performance narrative and assist in deeper analysis of the account, campaigns, products and services.
This approach will help uncover trends, issues, opportunities and insights that position you for long-term success.
Dig deeper: 6 tips to track and analyze PPC results
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