12 B.S. PPC Metrics That Are A Complete Waste Of Time (And What To Measure Instead) Guest Author When it comes to PPC metrics, there are over 100 AdWords metrics to consider. Facebook has another 75 at least. They’re helpful. Kinda. Sorta. But not really. These leading indicators can help you figure out where things are trending. And if you’re on the right track or not, but they’re not business metrics that move the needle. You could track them all, if you had time. But you don’t, because these bad PPC metrics pull you away from what’s really important (like making money). Here are 12 to avoid like the plague and what you should be tracking instead. Stop Obsessing Over These 12 PPC Metrics ASAP There are three categories of useless PPC metrics. Those include traffic metrics, micro metrics, and then the completely bat s— crazy ones. Check them out. Traffic Metrics You can’t sell without traffic. But optimizing campaigns around traffic metrics like these only do one thing… get you more traffic. Instead of, you know, $$$. 1) Clicks You know the age- old saying: Clicks get chicks. ? No one can resist them…The up-and-to-the-right graphs…The blog posts throwing around 100k / monthly visits like it ain’t no thang. Of course, none of this is true. Visits are one of the ultimate vanity metrics and prioritizing them in ad campaigns is an even worse idea, because you’re paying for each and every single one. Instead, clicks should be a byproduct. Your goal is revenue, more customers. So, it doesn’t matter if it requires only 10 clicks or even 100+. What matters is the total cost of those clicks in order to net a sale. 2) Impressions PPC impressions are the theoretical number of people who’ve seen your ad. I say ‘theoretical’ — because in reality, this number is complete B.S. The ‘impressions’ metric is a holdover from display ad dayz. As in, “This ad unit’s got a CPM of $3.50.” CPMs are a cost per thousand impressions. In other words, your payment here is linked to the amount of people you have the potential to reach, the number of people ‘see’ your ad, eyeballs. As opposed to the results. That’s the beauty of AdWords: it’s performance-based. You’re paying for X number of clicks to get Y conversions. Therefore, ‘impressions’ become completely irrelevant in this context. Don’t just take my word for it… “Impressions don’t matter if you ain’t convertin’” — Mahatma Gandhi. Ok, maybe he didn’t say that. So, maybe just take my word for it, because it’s true. Quit worrying about how many people see your PPC ad and focus on getting them to convert, instead. 3) Click-Through Rates A click-through rate is simply the number of clicks you’re getting out of all those (meaningless) impressions. Point is: if impressions aren’t helpful, dividing any number by those impressions isn’t going to be very helpful, either. Here’s why. Let’s say your ad gets 5 clicks and 1,000 impressions. So, your CTR is 0.5%. Clicks are quite tempting, we know. – image source That’s low. But does it matter? Meh. Not if the costs work out. Not if you can net a Cost Per Sale that still pencils out at the end of the day. CTRs help you figure out which ads are resonating. So, an incredible ad might fetch a 10% CTR (that’s impossibly high, btw). But if your conversions are still in the toilet, who cares? Stop focusing so much on CTR, and focus on how many people converted (read: bought) and at what cost per sale. Now, in saying all that, CTR does have some influence in one additional metric: your Quality Score. So, in theory, a lower CTR might ding your Quality Score, which might mean your ad position will drop and/or cost per click will raise. This means now is as good a time as any to have this talk… 4) Quality Scores Oh, that talk… – image source The AdWords Quality Score is one of the most misunderstood metrics. Yet, clients and PPC aficionados alike freak out over them, demanding them to be as high as humanly possible. But why? And how do they work? Here’s a quick recap of your Quality Score: Expected click-through rate (CTR): How relevant your keyword is to your business, product, or service. Calculated by looking at historical data for the keywords performance. Ad relevance: How good your ad is at keyword stuffing conveying the relevance of the keyword used. Landing page experience: How engaged visitors are on your landing page (i.e. did they bounce immediately?). Impact of extensions and other ad-formats: Your ad bid, extensions that increase CTR, and auction time signals. All this stuff is helpful to keep an eye on. It’s helpful to tweak and hack and improve. Consistently raising those ‘micro metrics’ over time can have positive long-term benefits. But…it’s not the end-all, be-all PPC metric that it’s often made out to be. Because, at the end of the day, there’s only one of those. Would you rather have a higher Quality Score or bottom line? Sacrificing short-term Quality Scores in order to drive more conversions is an OK bet I’m willing to make. 5) Relevancy Score Relevancy Score, in the social world, is like the AdWords Quality Score. They attempt to measure how ‘relevant’ your ad is to the audience you’re targeting (on a scale from one to ten). People often get tripped up, though, because they think it refers to the quality of the advertisement creative itself. When in reality, it doesn’t mean that at all. Instead, the same ad can have different relevancy scores in different campaigns, because of the audience targeting you’re using. So yeah, audience targeting is critical. But relevancy scores can be another red herring because the score has zero direct impact on conversions. And many times you’ll need to be OK with a low campaign Relevancy Score as you try to find new profitable audiences. Once again, it’s another example of a helpful ‘micro metric’ that matters in a few instances, but is often taken too far. Micro Metrics Micro metrics are supposed to let you know how ‘efficiently’ your campaigns are performing. The only problem? Efficiency doesn’t matter in the big picture. Buckle up, this is going to be a bumpy ride. 6) Cost Per Engagement Cost Per Engagement is your total spend divided by the total number of ‘engagement’ actions. An ‘engagement’ is defined by any number of actions a user might take with your ad, including: Comments Link clicks Page likes Photo views Post likes Post shares, etc. In other words, pretty much everything else besides the *actual* results this ad is generating. So, if you spend $50 bucks on a campaign and you got 50 engagement actions, your cost-per-engagement (CPE) would be $1. Cool. People are ‘engaging’ with your brand. That’s good, I’m told, by Kumbaya-chanting, self-appointed “social media gurus.” But in the PPC world, it’s next-to meaningless. There’s some argument to be made if you’re using these interactions to reach new audiences that you’ll later use to create high-converting custom audiences. Otherwise though, these surface-level metrics can become just another distraction away from what truly matters. 7) Budget Per Ad Budget Per Ad is exactly what it sounds like: The amount of money you allocate to a specific ad to spend–so that you won’t spend more than that number set. So, it’s helpful for an accountant or your CFO. If your budget is $5k, they probably don’t want you blowing through $10k. But otherwise, as a measure of your PPC performance, it’s again irrelevant. Are you making more money than you’re spending? That’s a good sign. Keep going in that direction. 8) Consistency of Ads Published Consistency of Ads published is ___. Honestly: WTF is it?! I mean, I get that it’s talking about the number of ads you’re creating and published. But why? For what purpose? I guess there’s a connection somewhere to potential ad fatigue on Facebook. But publishing more ads (i.e. quantity) isn’t the solution to solving that problem. The less said about this metric, the better. My blood pressure is already too high and we still have four more completely irrelevant metrics to go. Completely Irrelevant These final PPC metrics fall in two categories. They either lack context to provide any actionable insight–or worse, they’re completely bogus (see: wasted ad spend). So, I’ll try as hard as possible to not have a complete meltdown on these last four, but I can’t make any guarantees. 9) Landing Page SEO Score Oh boy, where do we begin with this one? We feel you, Michael Scott. – image source Your Landing Page SEO score is a metric of how ‘SEO friendly’ your landing page is (whatever the hell that means). Let’s get a few things straight before we dive into this cesspool of crap: Landing page success is not derived from SEO. This is PPC we’re talkin’ ‘bout, ‘member? Landing page success = the PPC traffic temperatures and the actual offer/audience match, not SEO. Landing pages should focus on conversion paths AND NOT SEO. Therefore, if you’re concerned with how ‘SEO friendly’ your PPC landing page is, you’re doing it wrong. SEO shouldn’t be your focus on landing pages. You (should) have different ones for that. You’re already driving specific traffic to these pages from ads. Focus on matching your ad copy, CTAs and offer to the right audience instead of jamming keywords and alt tags for some extra page views. 10) Negative Keyword Usage Negative keywords are good. They help you ‘control’ what search terms you’re actually spending money on, so that you can hopefully avoid completely wasting your budget. But ‘negative keyword usage’? Yeah, you got me too. Negative keyword usage isn’t something you really track, which means the odds of a tool being able to notice how many junk searches are slipping through your negative keywords are somewhere between slim-to-none. So, let’s just ignore it completely, shall we? 11) Wasted Ad Spend If you ever see a “Wasted Spend: $xx,xxx,” run for the hills. Don’t stop. Just keep going. – image source Wanna know how to be a slick software sales genius? Try to quantifiably show how much money someone’s wasting currently, so you can sell them the solution. Like so. They get an A for sales effort and a big, fat F for math. PPC attribution is why. Certain campaigns or ad groups often assist other campaigns and other ad groups in the conversion process. Their goal isn’t to convert directly per se, but pave the way for other campaigns to ‘clean up’ at the finish line. Wasted Ad Spend doesn’t take this into account, because it can’t due to the fact it’s another made-up, hypothetical metric that fails to grasp the context of what’s happening inside an account. Instead of giving you keyword and search terms as well as their possible discrepancies and how to bridge the gap, it tells you that you suck and need someone to fix it for you for a cost. How convenient. 12) Competitive Benchmarks Competitive benchmarks (of any Shade of Grey) can help you determine if you’re on the right path or not, or if you’re trending in the right direction (or not). But in PPC, it’s misleading. It’s nice to know that your Big Bad Competitor has a 6% average CTR on their campaign, or that their estimated Cost per Click is only $3.50. But what can you actually do with this data? Almost nothing, besides copy them I guess. That’s what happens and why most PPC accounts all get the same, average results. Instead of matching pixels with competitors, come out with a better offer. Double down on your compelling benefits that set you apart. Conversions, not click-through rates, pay the bills. Phew. Finally done. Almost didn’t make it through the last few. Here’s my final salute to those twelve. Let’s try to focus on some positives now. PPC Metrics to Track Instead You should be concerned with one thing and one thing only when it comes to PPC. In a word: money. If you just want more traffic, PPC isn’t your tool. Your bottom line in PPC should be: if it you ain’t makin’ money, you’re wastin’ money. Look: PPC ain’t cheap. You’re going to need to pony up thousands of dollars (on the low end) in order to even get your campaigns off the ground. So, the only reason to take that considerable risk is to bring in more money than you spend. That’s it. Not traffic. Not ‘landing page relevancy’. And definitely not your landing page SEO scores. Fancy stats like these are fine…to a point. Glancing at them every now and then is OK. But reporting on them and obsessing over them? That’s not. Here are a few examples of PPC metrics you should be tracking instead (and why). 1) Cost Per Sale Cost Per Sale is pretty straightforward. What’s the amount that you, as an advertiser, paid for each sale? How many dollars did it take you to get one sale? This one single metric tells you (almost) everything you need to know about how your PPC campaigns are performing. It’s the secret to if you’re ultimately succeeding or failing. All sales have a theoretical ‘cost’ associated with driving them. Forget PPC for a second. Outbound sales? Add up those salaries and tools and trips, divide by number of sales generated, and you’re getting closer to figuring out how well you’re performing. Cost Per Sale helps you set the appropriate context, too. For example, is a $50 cost per click expensive? Maybe. Depends on who you’re trying to reach and what you’re selling. If you’re selling bro rompers that retail for $50 bucks (what a bargain, right?!), your answer is no — you shouldn’t spend $50 on a single click. But let’s definitely #romptogether. – image source But if you’re selling high-priced insurance with fat commissions and 20+ year retention, you’re good to go. ROI > cost per click, click-through rate, and every other metric above. 2) Close Rates Not all AdWords ‘conversions’ are actual, you know, conversions. They might just be leads. And only a tiny percent of those are ever going to become a paying customer. So, you know that Cost Per Sale you just came up with? It’s wrong, because it doesn’t take into account your effective Close Rate. This is why it’s meaningless if you’re paying 2x per click than your competitor. You both undoubtedly have different close rates. And that, ultimately, plays a bigger role in determining your AdWords ROI. 3) Average Order Values Average Order Value is the average amount ($) spent by a customer on the conversion action. It’s similar to Cost Per Sale. For example, if you’re running a hotel business, and your average booking through PPC is two nights at $100 per night, your average order value = $200. So far anyway. Let’s stick with this hotel example for a second. Because the cost for rooms at your hotel isn’t the only source that can determine the true, effective order value. What about resort fees? What about parking fees? What about room service? The lobby bar? And on and on and on. It can get really scary when the fees add up. – image source Now that average order value keeps edging up, closer to $300 or even $400 bucks a pop. That changes things. You might not want to break-even on the initial $200 (that’s cutting it a little close). BUT that does mean you might be able to be a little more aggressive in order to push up your occupancy rates, bring down vacancy, and make up for it on the back-end when people are spending money in your property. 4) Lifetime Value A customer’s lifetime value (LTV) tells you how much money someone is worth to your business over the long-term. We’ve just seen a few examples that illustrate this perfectly. The life insurance client who sticks with you over 30 years (unless of course, they die) is a good example. Not only do you get a commission, but you also get annual payments over the life of that contract. Another example, the hotel who’s able to increase average order values with on-property up-sells. Multiply that number by one annual trip for ten years. Now, that ‘expensive’ PPC campaign is looking a whole lot more affordable. It means a higher-than-average CPC is a little more stomach-able. A low Quality Score is less of a big deal. And your ‘landing page SEO’ score is still completely irrelevant. Wrap Up on PPC Metrics It’s easy to get bogged down by the weight of 1,000 PPC metrics. 10k clicks a week has you feeling like a badass and your CTR is sky high, so what could go wrong? Well, a lot in reality. Like I said before, those leading indicators are helpful…to a point. But in the grand scheme of things, they’re not as instructive as you think. Instead, turn your obsession to the profitability metrics like Cost Per Sale, Close Rates, Average Order Values, and Lifetime Value that tell the real story. The goal of PPC isn’t traffic or ‘efficiency’ or even saving ad spend. It’s making it rain. – image source Author Bio Johnathan Dane is the Founder of KlientBoost, a PPC agency focusing on CRO and aggressive testing. If you like what you just read, you should see what their custom growth proposal looks like.