How to Choose a Success Metric for PPC Ad Testing

business-woman-with-penAssuming you’re testing your PPC ads on a regular basis, which I hope is the case, one of the challenges you may face is deciding which success metric to choose – or, in simpler terms, what to optimize for.

The reason you can’t simply run an ad variation and see what metric it improves is because sometimes you’ll find that a variation could increase one metric but decrease another.

It’s not uncommon to see a boost in click-through rate (CTR) but a dip in conversion rate. To avoid this confusing situation, you’ll need to decide on how you measure success and figure out what metric is the most representative of that.

Sure, everyone wants more clicks, more conversions, better ROI, lower CPA and phenomenal results for pennies. The trick here is to always keep your business goals in mind and translate them into an SEM metric that makes sense to you.

Here’s a list of the most common metrics and a few words of caution about each.

  • CTR is the most common success metric and the one you’ll often find ad optimization services using. The reason most people focus on this metric is because keyword CTR is strongly indicative of its relevance to the user, its alignment with intent, and how closely it is to the search query. Use CTR when your main goal is driving traffic to site, but be cautious that just because someone clicked your ad, doesn’t mean they will convert on your landing page.
  • Conversion rate is a great metric to use when you’re looking to measure meaningful actions like sales, lead gen, downloads, or sign-ups. The potential downside of using conversion rate as a success metric is that it doesn’t take into account things like impressions, CTRs, or average sale amount.
  • CPA, typically more challenging to optimize for, looks great when you report on it, but it doesn’t take into account things like volume (impressions and clicks) or average sale amount.
  • ROI/ROAS, big performance acronyms, also don’t account for impression and click volumes.
  • Impressions are really only useful if your main goal is branding. If you want to stay top of mind and don’t necessarily care about driving traffic to your site, large impression numbers can look really good. It is, however, a terrible metric for PPC.

So which one of these metrics is the best? Again, it depends on your business goals.

If you’re unsure of which one to choose, my favorite is a combination of CTR and conversion rate, commonly referred to as conversions per impressions (CVR/IMP). When you optimize for conversions per impressions, you ensure that you aren’t boosting your CTR at the expense of your conversions or vice versa.

Which success metric do you usually optimize your PPC ads for? Have you tried optimizing for conversions per impressions? Add your thoughts and questions in the comments below.

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