Determining Which PPC Metrics Really Matter

This week Luke Alley (@LukeAlley) fills in for Matt Umbro (@Matt_Umbro) with yet another great question set titled “Determining Which PPC Metrics Really Matter.” The following is the transcribed Streamcap from the live chat:

Q1: What metrics do you use beyond CPA? For example, do you have a target metric for conversions turning into sales?

  • Trying to think of metrics I *don’t* use in some form or another. Never really used any of the reach/frequency stuff. And I rarely use CPM. – Richard Fergie (@RichardFergie)
    • Right. They all have a time and a place. – Luke Alley
      • Lead closing rates are generally provided by client or our historical industry standards. – Nicole Mintiens
        • We’re putting more importance on lead closing rates lately. Often times we end up consulting on their sales process. – Luke Alley
  • Avg Cost per Lead combined with Lead Closing Rates. – Nicole Mintiens (@Tregesy)
    • For lead closing rates, how do you get those metrics? – Luke Alley
  • All sorts of stuff. ROI, profit per impression, profit per click, ROAS. For B2B, SQL (sales qualified leads). – Jeremy Brown (@JBGuru)
  • Impression share is becoming an increasingly important metric for some of our clients. – Amy Middleton (@amyxmiddleton)
  • For reporting to clients is a much shorter list: clicks, cost, micro-conversions, proxy to business outcome, business outcome. – Richard Fergie
  • ROAS is a primary metric for us. Looping that in with trying to maintain/increase new customer LTV. – Andrew Bethel (@AndrewPPC)
  • Impression share has recently become much more important for us. Need to get maximum exposure. – John Budzynski (@Budzynski)
  • Secondary conversions like social follower growth, social amplification (likes, tweets, etc), that are not CPA based. – James Svoboda (@Realicity)

Q2: What is one metric that you believe is underutilized in the PPC world? Why?

  • Average order value and social metrics! AOV cuz it can seriously impact revenue. Social metrics because they’re micro conversions! – Heather Cooan (@HeatherCooan)
  • Profits. ROAS does not measure volume, only account efficiency. – Leo Sussan (@lsussan)
  • Take any standard metric and add “incremental” in front. – Richard Fergie
  • Lifetime value. Sometimes difficult to calculate and depends on info from the client. – Jeremy Brown
    • We’re doing it with relative success, it works if implemented correctly (Attribution needs to be figured out). – Leo Sussan
  • Conversion Rate. Many clients aren’t concerned about it and expect pre-click work to compensate for low conversions. – Amy Middleton
    • This is a really common thing and a really good point! – Heather Cooan
    • Hate that. 95 chars to sell product & make up for a bad landing page = hard times. – Richard Fergie
    • LPs and site quality are half the battle. – Jeremy Brown
  • Assists are also under valued. Anyone using GA for Display? You can see impressions & view throughs from the GDN to conv! – Heather Cooan
    • That requires the doubleclick.js code, and it’s a GA beta, but still cool. – Jeremy Brown
      • Yup, run it alongside regular GA/OMNR/WebTrends…not in place of. – Heather Cooan
        • That’s a decent idea although I’m not overly concerned if people want to replace it. Def. run UA with GA. – Jeremy Brown
    • 100% agree on assists are undervalued, if valued at all. – Kurt Henninger (@KurtHenninger)
  • LTV is by far the most underutilized. Intelligent long term growth should be on every PPCers mind. – Andrew Bethel
    • That all makes sense. So when you try to increase LTV are you trying to steer users towards high LTV purchases? Or is change in LTV measured some other way? And if it is, how quickly can you measure a change for a cohort? – Richard Fergie
      • You can increase LTV in so many ways. But focusing spend on those high LTV products or categories is 1st. Evaluating LTV every few months is a goal of ours. Hard to achieve. Still working on it. – Andrew Bethel
      • Requires a lot of cooperation from client, which they may or may not be willing to give. – Timothy Jensen (@timothyjjensen)

Q3: Within your CPA and ROAS metrics, do you include management costs and/or margins when reporting to clients? Why or why not?

  • For my eCom guys I do. They inevitably request it. – Heather Cooan
  • Depends on client and needs. Some we report overall margins and some it’s more granular. – Jeremy Brown
  • Very rarely. Curious to see if/how others have worked into reporting. – Timothy Jensen
    • Savvy business owners have asked for it. We add a line with mngt costs, and then total spend + mgnt for total cost. – Luke Alley
      • Yup, and I then I use total spend to calc ROAS/Margin/Profit, whatever their KPI is. I don’t roll in management fees for more granular reporting though. Just for top level roll ups. – Heather Cooan
  • Sometimes yes, sometimes no. Probably should always be yes, but I often take the easy route. – Richard Fergie
  • I include Margins. Profits is measured as follows: Revenue * Margin – Cost. – Leo Sussan
  • Depends on how much of a complete picture we can paint for client. Often they don’t share ROI #’s so the reports are incomplete. – James Svoboda
  • No, account mgmt requires all round expertise not used just in acquisition. Mostly not worth to measure too specific. – Rohan Ayyar (@searchrook)
  • What the client requests the client gets (usually). – Robert Brady (@robert_brady)
  • At my current agency, no. And ad hoc client reports are so much easier for it! – Amy Middleton

Q4: What metric do you believe to be more indicative of account performance, CPA or conversion rate? Why?

  • CPA within the context of Volume. More exposure and conversions has it’s own cost. – James Svoboda
  • Neither. ROI or other metrics tend to be more important. CPA is a rough guide unless every conv. worth the same. – Jeremy Brown
  • Depends on whether Ecomm or Lead Gen. – Josh Devlin (@JayPeeDevlin)
    • Exactly, lead gen CPA alone doesn’t indicate actual value of conversions. – Timothy Jensen
  • One big mistake I see is opting to CPA when you should be opting to margin…not the same approach. – Heather Cooan
  • Having to choose between just those two: CPA. – Richard Fergie
  • Indicating account performance? CPA. But Conversion Rate is so integral to maximizing Profits, I find it more important. – Leo Sussan
  • I feel both are highly dependent on landing pages, closing process, etc. May not be fair judge. – Robert Brady
  • Well, CPA if must choose, but again, you need context for any metric. Good CPA at half volume stinks! – Jeremy Brown
  • OK fine, if I only had those two metrics to choose from…ugh, this is hard. I guess CPA. – Heather Cooan
  • Monitor rate at which CPA goes down and conversion rate goes up, not CPA vs conversion. Both are industry dependent. – Rohan Ayyar
  • Of those two: CPA. Conversion rate has a built-in penalty for buying low value clicks. – Martin Roettgerding (@bloomarty)
  • CPA! We can work with a good conv rate and losing money on each conversion. – Rafa Jimenez (@Rafa_Jimenez)

Q5: Do you determine which metrics to judge account performance on when starting a new account? If so, how?

  • Yes. eCom always bottom line metrics. Lead Gen…depends on how robust back end tracking is with the client. – Heather Cooan
  • Definitely. Without clear expectations set with clients on how to measure performance, you’re in for a guaranteed headache. – Greg Young (@PPCJedi)
  • The thing I’ve been running into lately is poor revenue tracking from calls for eCom clients. – Heather Cooan
    • Huge challenge, that we haven’t addressed. Looking forward to that post. – Luke Alley
  • CPA in the contest of QS & Impression Share. New accounts take time to fully understand the searchscape you’ve just entered. – James Svoboda
  • It’s always the closest thing to the client’s success I can get. LTV is the dream, but often have to settle for revenue & ROI. – Martin Roettgerding
  • Absolutely! If you don’t know where to aim, how are you supposed to get to your destination. – Bryant Garvin (@BryantGarvin)
  • Yes, we work with client to identify appropriate KPIs for the account. – Amy Middleton
    • Same for us. sometimes differing opinions can get tricky. – John Budzynski
  • Determine them based on initial client priorities. More volume: revenue/conversions. More efficiency: CPA/ROI. – Richard Fergie
  • Wait, are we talking brand spanking new never run or new to you accounts? – Heather Cooan
    • I’d say both. Basically, what are the success metrics you measure month over month. – Luke Alley
    • Either way the goals “should” be the same end ones. – Bryant Garvin
      • Yeah, same bottom line. But CTR and QS I pay closer attention to in brand spanking new accounts. – Heather Cooan
  • Collaboration with client. We discuss goals at outset and establish a benchmark document for recent performance. – Jeremy Brown

Q6: What are your thoughts on the new benchmark metrics in Google Shopping?

  • Love em. – Richard Fergie
  • Useful because shopping is much more apples to apples comparison in any case where multiple vendors sell same things. – Steve Cameron (@adventcom)
  • Highly unhappy they don’t extend to the product level. I understand the challenges, but we still need more control. I’d like to see the ability to designate highly important keywords for certain products. With higher bids. – Jeremy Brown
  • They’re helpful, but I hope this is just the start. Need MOAR info. – Heather Cooan
    • I’m sure that’s a universal frustration. We need to push Google for more control and tools around PLAs/feeds. – Jeremy Brown
      • Problem is I think the whole point for Google is to maintain control and give as little back our way. – Bryant Garvin
        • That’s short-sighted on their part. Lots of clients would spend more money with more control. – Jeremy Brown
  • Don’t trust them. “advertisers with similar products” – “ok, so if I look at one product…” – “nah, then we won’t tell you” – Martin Roettgerding
    • They define “similar” the same way they define “broad match”. So ya, nothing to worry about. – Luke Alley
  • I think looking at your own metrics is more valuable than what google claims is the ‘benchmark’ – Greg Young
  • NPLAs/Shopping are basically Broad Match on SEO Steroids. Not much control there. – Bryant Garvin
  • Regardless of what the benchmark is you’ve got to optimize your account for your own CTR and Conv. Rates. – Greg Young
  • Basically the info they give us will drive us to increase bids?? Probably Google’$ goal? – Luke Alley
    • Yeah, a lot of the shopping set up is leftover from organic…gonna take a while to make it ad friendly. – Heather Cooan
  • We have clients where they want to show for certain keywords on a PLA and are willing to pay. – Jeremy Brown

Q7: If you could abolish one PPC metric, what would it be any why?

  • Quality Score. – Bryant Garvin
  • Quality Score. Not enough transparency from Google. – Robert Brady
  • ROI. Would force advertisers to think more about things like profit. Currently is used mostly as a crutch when not most appropriate. – Richard Fergie
  • 25 characters in line 1. – Luke Alley
  • For display…avg. pos, estimated CTR…these are useless. – Heather Cooan
  • Bogus, fake QS; give us the real QS. Also, historical QS so we can graph changes over time in UI. – Jeremy Brown
  • Not a metric but not being able to use | in | my | Ad | Copy | I can – use -s but not | doesn’t | make | sense! – Bryant Garvin
  • Not sure that i’d call this a metric… but first page bid ‘estimates’. bleh. – Greg Young

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Don’t forget to stay tuned for the next #PPCchat on Tuesday at 12 noon Eastern, 9 am Pacific and 5pm in the UK. Same Chat time, same Chat channel.

Participants

Check out the PPCChat Twitter list to see and connect with all current and prior participants.

• Matt Umbro (@Matt_Umbro)
• James Svoboda (@Realicity)
• Paul Kragthorpe (@PaulKragthorpe)
• Amy Middleton (@amyxmiddleton)
• Andrew Bethel (@AndrewPPC)
• Bryant Garvin (@BryantGarvin)
• Greg Young (@PPCJedi)
• Heather Cooan (@HeatherCooan)
• Jeremy Brown (@JBGuru)
• John Budzynski (@Budzynski)
• Josh Devlin (@JayPeeDevlin)
• Kurt Henninger (@KurtHenninger)
• Leo Sussan (@lsussan)
• Martin Roettgerding (@bloomarty)
• Nicole Mintiens (@Tregesy)
• Rafa Jimenez (@Rafa_Jimenez)
• Richard Fergie (@RichardFergie)
• Robert Brady (@robert_brady)
• Rohan Ayyar (@searchrook)
• Steve Cameron (@adventcom)
• Timothy Jensen (@timothyjjensen)
 

Determining which Streamcaps matter….yep, ALL of them do!

This is a guest post by Paul Kragthorpe; WebRanking SEM Manager in Minneapolis, Minnesota, #PPCChat Streamcap Grabber, SEO Blog Author. Connect with me @PaulKragthorpe, and Google Plus.

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