Understanding Your Google Ads Agency's Next Report

This article isn't intended to delve into the intricacies of all Google Ads and reporting statistics. Instead, its purpose is to empower you with the knowledge needed to understand the next Google Ads report you receive from your online marketer.

 Typically, these reports compare one timeframe against another. While it's common to compare one month with the next, it's essential to recognise that this approach may not provide a comprehensive picture. With this in mind, let's get started.

Impressions

Impressions represent the frequency with which your advertisement was displayed on either the Display Advertising Network or the Search Advertising Network.

In search advertising, impressions refer to the number of times your ads were visible to users who performedkeyword-specific searches closely related to your product or service. It’s important to note that display advertising impressions are slightly different and encompass banner ads that are showcased on external websites. Display ads can be precisely targeted through various methods.

Primary factors contributing to a decrease in impressions compared to the previous period include:

• Reduced budget: when your monthly budget is scaled back, the frequency of your ad appearances diminishes accordingly.
• Enhancedclick-through rates: if your click-through rate experiences an upswing during the period, it indicates that you are garnering more clicks from the impressions permitted by your budget.
• Increased cost-per-click: an increased cost-per-click during the period directly impacts the rate at which your daily budget is exhausted and the frequency at which your ads are deemed eligible for display.
• More precise targeting: it's essential to understand that accumulating the most impressions may not always be advantageous. A focused campaign primarily aims to achieve a specific marketing objective, and if that objective revolves around lead generation, an excess of impressions doesn't necessarily equate to better outcomes.

Clicks

Clicks represent the instances when users interact with your ads by clicking on them and subsequently visiting your website. We’ll delve into the cost-per-click in the upcoming section; however, it’s important to note that this metric can exhibit significant variations between the Search and Display Advertising Networks.

Key factors contributing to an upsurge in clicks compared to the preceding period include:

• Augmented budget: the fastest method of amplifying the number of clicks garnered over a given period is by augmenting your campaign budget.
• Enhanced ad positions: if your ads exhibit improved performance stemming from factors such as enhanced ad copy or higher bid amounts, achieving a superior average ad position will result in an increase in clicks.

Click-Through-Rate

The click-through rate (CTR) signifies the proportion of users who have viewed your ads and subsequently clicked on them to access your website. CTR is determined by the following formula:

Clicks / Impressions x 100 = Click-through rate

A typical click-through rate falls within the range of 3% to 5%, with anything surpassing this range being regarded as above-average performance. 

Nevertheless, in our capacity as a Google Ads Agency, we proactively adjust or eliminate ads that exhibit a click-through rate falling below the 5-8% threshold.

Key factors contributing to the enhancement of click-through rates include:

1. Enhanced precision in targeting: as an account matures and gathers more data, online marketers gain valuable insights that inform strategic decisions. This data is leveraged to eliminate underperforming keywords and introduce negative keywords, which prevent ads from displaying when they do not align with the searcher's intent.
2. Improved ad rank: ad rank significantly impacts the placement of your ads within the Search Advertising Network. Higher ad positions typically lead to elevated click-through rates.
3. Stronger ad copy: the quality of your ad copy plays a pivotal role in boosting the click-worthiness of your ads. Improved ad copy positively influences the likelihood of users clicking on your ads.

Conversions / Acquisitions

Conversions or acquisitions represent the objectives achieved by visitors on your website. These are the actions that are deemed valuable. These actions could encompass activities such as completing a contact form, subscribing to a newsletter, making a purchase, or initiating a phone call to your company. If you find yourself unsure about what constitutes a valuable action, consider consulting your online marketing team to incorporate this information into your report.

Primary reasons for a decline in conversions:

1. Modifications in landing pages: have there been recent alterations to your website or landing pages? Such changes may have an impact on visitors' perceptions of your business, potentially deterring them from completing valuable actions.
2. Reduced clicks: a decrease in clicks can be an indicator of underlying issues within your ads account, and these issues can often be resolved by leveraging the diagnostic tools available on Google Ads.
3. Seasonal shifts: if the volume of clicks remains consistent with the previous period, yet conversions have decreased, it's advisable to investigate the seasonality of your product or service. Certain periods may be associated with lower sales, which should be factored into your report analysis.
4. Diminished keyword and ad relevance: an increase in clicks coupled with a drop in the conversion rate may point to specific ads and keywords that are triggering inaccurate expectations in visitors. Addressing the relevance of these elements is crucial for optimising conversions.

Conversion Rate

The conversion rate signifies the proportion of visitors who, after clicking on an ad within the Display or Search Advertising Networks, proceed to carry out a valuable action on your website. The calculation of the conversion rate is as follows:

Conversion / Clicks x 100 = Conversion Rate %

Factors contributing to an upturn in conversion rates include:

1. Enhanced relevance of clicks: when the user's intent aligns with pertinent landing page content, the probability of the user transitioning into a lead significantly rises.
2. Enhanced targeting: an improvement in targeting and bidding is due to the concentration of the monthly account budget on campaigns, keywords, and channels that yield the most favourable outcomes.
3. Seasonal effects: many products and services are intertwined with seasonal purchasing patterns, which can have an influence on the conversion rate observed on your website.

Cost Per Acquisition

The distinction between cost per acquisition (CPA) and cost per click (CPC) is crucial. CPC represents the fee an advertiser pays for each click on their ad, while CPA factors in the number of clicks required before a user completes a conversion on your website.

To simplify, if you're paying R5 per click, and every 10th visitor achieves a conversion, your CPA would amount to R50.

Common factors that may lead to an escalation in the cost per acquisition:

1. Diminished conversion rates: when a significant portion of clicks proves irrelevant, it results in increased expenses per acquisition.
2. Elevated CPC: if your conversion rates remain constant but your cost per acquisition rises, the primary cause is likely an increase in the cost per click.

The Most Important Google Ads Metric

While high figures in these metrics might appear impressive, the true measure of the effectiveness of any advertising and marketing campaign lies in the return on investment (ROI). Understanding your ROI is crucial for assessing the efficacy of your ad expenditure.

To kick things off, it's essential to employ website engagement software such as Google Analytics to monitor the sources of your leads. This step allows you to identify the channels that produce the most leads and return on investment. After pinpointing these effective channels, you can utilise Google's formulas to ascertain the value of each conversion.