1. Number of impressions
The number of impressions is the frequency of ad display. Each time an ad is displayed on a search results page or other website in the Google ad network, it is counted as an impression. This indicator is used to observe whether the ad has been delivered, whether many people search for the word, and whether the product is popular. If the number of impressions is low, it may be that the product is not popular, which is a key factor to learn, or it may be that the bid is too low, and someone searched but did not trigger the display of the ad. You can increase the bid and try again.
2. Click-through rate
Click-through rate = number of clicks + number of impressions x 100%
This indicator shows how many users who have seen the ad finally clicked on the ad. Using this indicator, you can evaluate the attractiveness of the ad and the match between the ad and the keywords and other targeting settings. The higher the click-through rate, on the one hand, it means that the ad is more attractive and the user is searching for what he wants; on the other hand, it means that the information in the ad may be very attractive, or the ad is ranked very high because of the high bid. Generally speaking, a click-through rate of less than 1% in the search network means that the ad is not accurately targeted to the relevant audience.
3. Conversions
When a user interacts with an ad (for example, clicks on a text ad or watches a video ad) and then takes an action that is valuable to the business (such as buying online or calling a merchant), it is counted as a conversion.
4. Conversion rate
Conversion rate = number of conversions ÷ number of clicks x 100%
The conversion rate directly measures whether the product is competitive and whether the landing page is perfect enough. Many people click on the ad, but few people buy it, and the conversion rate is very low. It is possible that the attractive factors in the ad are false. For example, the price of the ad is 100 yuan, but when the user arrives at the page, he finds that it is 200 yuan; it may also be that the product is not competitive enough, such as high shipping costs, unclear product details, etc.
5. Average cost per conversion
This indicator refers to the average amount paid for each conversion brought by the ad. The average cost per conversion is calculated by dividing the total conversion cost by the total number of conversions. The average cost per conversion is calculated based on the actual cost per conversion, which may not be the same as the target cost per conversion.
6. Return on Investment (ROI)
The exact calculation method of the ROI indicator depends on the goal of the campaign, such as increasing sales, tapping potential customers, and promoting other important customer activities. The ROI can evaluate whether the advertising investment in AdWords has brought the desired results and whether the business has achieved stable returns. If the goal is to increase sales, the ROI refers to how much advertising money is spent on SEM and how much direct sales are brought. It can be expressed by the following formula.
Return on Investment = Sales ÷ Cost x 100% Sales = Unique Visitors x Conversion Rate x Average Customer Price
By calculating the ROI, you can understand the revenue brought by AdWords advertising, and you can also use the ROI to decide how to allocate the budget.
In addition to the above indicators that need to be paid attention to, relevant optimization operations should be carried out frequently. Based on the conversion rate and return on investment, you can decide whether to expand the volume, increase advertising investment, try to place ads in more countries or regions, and increase the bid for ads to rank higher to get more display opportunities; conversely, you need to analyze whether the reason for the low conversion rate is the low click-through rate, or whether the ads were not placed at all, resulting in few impressions, and then optimize accordingly.