You’ve probably heard marketing specialists talking about CTR, ROAS, CPA, and many other performance metrics. If you ask for opinions on how to measure the performance of your Google Ads campaigns on forums or social media, you’ll get all kinds of answers—and most likely, none of them will work perfectly for you. Why? Because every industry and business is different, and there is no one-size-fits-all formula for guaranteed success, so performance must be measured differently.

Set Conversions According to Your Campaign Goals

Until you’re confident that you’re accurately tracking all visitor behavior on your site, you cannot draw conclusions. In this regard, Google offers many tools (Google Tag Manager, Google Analytics) that allow you to measure different types of conversions: page visits, clicks on specific buttons, form completions, purchases on the website, calls from ads or websites, email submissions, app installations, in-app actions, and more.

It’s very important to clearly list all objectives so you can get a complete picture of your performance. As a general suggestion, the Marketing PixelFlowAgency team recommends setting up micro-conversions, as these can help identify irregularities on your site. For example, imagine you manage an e-commerce website and want to set up a “Thank You” conversion for each visit shown after completing a purchase. It’s also recommended to set micro-conversions for “Add to Cart” events and visits to the “Checkout” page.

Conversions Don’t Tell the Whole Story of a Campaign

While conversions are often the main goal of a campaign, you shouldn’t focus solely on them. After auditing client account histories, we’ve noticed that people tend to make changes to their campaigns only when there are no conversions or when costs exceed the business’s tolerable limit. Even though periodic optimization may seem like extra or unreasonable effort, it is a necessary process. Reaching your goals is great, but achieving even better results ensures your business accelerates while reducing certain costs. Below are some indicators you should consider when aiming to improve your campaign performance.

Which Performance Metrics Should You Track?

There are a variety of such metrics in Google Ads that you can calculate yourself using the data it provides. It’s important to choose them based on the objectives behind your campaigns. Here’s a list of the most commonly used KPIs in Google Ads, although keep in mind that they alone are not sufficient to measure the full performance of any campaign.

1. Impressions – represents the number of times your ads are displayed across the advertising network.

2. Clicks – represents the number of clicks your ads receive.

3. IS (Impression Share) – represents the ad display rate, or the percentage of times your ads appear. This value should ideally be as close to 100% as possible.

4. CPC (Cost per Click) – represents the cost paid for each click.

5. CTR (Click Through Rate) – the click-through rate is calculated as the ratio of people who click your ad to the number of people who see it. CTR should be as close to 100% as possible. Depending on the niche and competition, a CTR above 10% in the search network may be ideal.

6. Average Position – the average position of the ad on the page where it appears; ideally, this should be 1.

7. QS (Quality Score) – this metric is interpreted as a grade for the performance and quality of your ad for a given keyword. The quality score is calculated using a formula that considers CTR, ad relevance (how well it matches searcher intent), and landing page quality (based on user interaction data). A high Quality Score results in lower CPCs and better performance.

8. Invalid Clicks – represents clicks that are deemed invalid. Not all visitors to your site are potential customers; some may be bots or even competitors trying to drain your budget. Fortunately, Google uses powerful algorithms to detect invalid clicks. Budgets spent on these are automatically refunded. It’s important to track this metric as it allows you to draw conclusions about your campaign.

9. Conversions – represents the number of conversions generated by your ads.

10. CVR (Conversion Rate) – the conversion rate is calculated as the ratio of conversions to clicks. This metric varies by market. Some businesses have an optimal CVR of 7%, while in other cases a CVR of 0.8% is sufficient. The higher this metric, the more satisfactory the profit.

11. CPA (Cost per Acquisition) – the cost per acquisition is the ratio of ad spend to advertising conversions. An ideal CPA varies by business, depending on segment, product, price, profit, and many other factors that affect the maximum CPA you can afford. A lower CPA helps increase profit margins while generating more conversions for the same budget.

12. ROAS (Return on Ad Spend) – understanding ROAS is absolutely essential in any business. Return on ad spend is calculated as the ratio of revenue earned to advertising costs. A ratio below 1 indicates that you are spending more than you earn. Such situations cannot continue indefinitely, which is why significant changes to your campaign strategies may be necessary.