Understanding PPC Metrics
Key PPC Metrics Explained
Cost Per Click (CPC)
CPC represents how much you pay for each click on your ad:
- Total Cost ÷ Number of Clicks = CPC
- Lower CPC generally means more efficient spending
- Varies by industry and keyword competition
Click-Through Rate (CTR)
CTR shows how often people click your ad after seeing it:
- (Clicks ÷ Impressions) × 100 = CTR%
- Higher CTR indicates more relevant ads
- Can affect Quality Score and CPC
Conversion Rate
The percentage of clicks that result in desired actions:
- (Conversions ÷ Clicks) × 100 = Conversion Rate%
- Key indicator of campaign effectiveness
- Varies by industry and conversion type
Return on Investment (ROI)
The profit generated relative to your ad spend:
- ((Revenue - Cost) ÷ Cost) × 100 = ROI%
- Positive ROI indicates profitable campaigns
- Consider lifetime customer value
Improving PPC Performance
- Keyword Optimization: Choose relevant, specific keywords
- Ad Copy Testing: Continuously test and improve ad text
- Landing Page Quality: Ensure relevant, high-converting pages
- Bid Management: Adjust bids based on performance
- Negative Keywords: Exclude irrelevant search terms
Industry Benchmarks
Average CTR by Industry
- E-commerce: 1.66%
- B2B: 2.41%
- Finance: 2.65%
- Technology: 2.38%
Average Conversion Rate by Industry
- E-commerce: 1.91%
- B2B: 2.23%
- Finance: 5.01%
- Technology: 2.55%
Tips for Success
- Monitor and adjust campaigns regularly
- Use ad scheduling to target peak times
- Implement conversion tracking properly
- Test different ad formats and extensions
- Focus on quality score improvement