Learn how to effectively interpret PPC metrics to align advertising performance with business objectives and unlock growth opportunities.
When it comes to PPC, success depends on more than just launching campaigns — it’s about understanding and analyzing the right performance metrics.
By knowing which data points to focus on and how to interpret them, you can make informed decisions that drive better results and align with your business goals.
This article breaks down the key metrics you need to monitor, from basic to advanced, and shows you how to use them to measure and improve your PPC performance.
How PPC transformed advertising analytics
When digital advertising first emerged, one of its most exciting features was its ability to offer precise data measurement, something traditional marketing lacked. With PPC, you could track everything:
- How many people visited your website.
- How many viewed or clicked your ad.
- Even the specific search terms they used to find it.
This was revolutionary, giving advertisers unprecedented insights into their audience’s behavior.
Beyond basic metrics, PPC also introduced conversion tracking, allowing advertisers to see the exact ROI for each ad. Compared to traditional advertising or early banner ads, this level of reporting and attribution was a game-changer.
PPC didn’t just offer data — it allowed for deep dives into ad performance, audience profiling and the customer journey in ways never seen before.
Advertisers could spot trends early, forecast with greater accuracy and gain valuable insights into their competition. Like AI today, PPC disrupted the industry, forcing marketers to adapt to this new data-driven landscape.
However, just having access to all this data isn’t enough. Success depends on understanding and interpreting it effectively. It’s not just about having the information but knowing what to look for and why.
Like the Three-Eyed Raven in “Game of Thrones,” possessing all the knowledge in the world is useless without the context and skill to interpret it. Only then can you turn insights into meaningful, actionable strategies. (If you’re not a GOT fan, thanks for sticking with me!)
Reporting
Context is crucial, as it often ties back to the core business and account objectives.
Weekly, monthly and quarterly reporting of PPC data should align with each client’s goals. While this may seem obvious, it is not always practiced.
The term “performance metrics” can vary significantly among clients, making it essential to establish a reporting structure tailored to different stakeholders.
This ensures you have the analytical foundation needed to meet client expectations, whether through a reporting template from platforms like Swydo or Report Garden.
Personally, I prefer a real-time Looker Studio performance dashboard (or other real-time dashboards), where clients can adjust date ranges and access their own reporting without waiting for specific intervals.
This approach provides immediate insights and allows for the integration of data from various platforms beyond PPC, such as Shopify, Magento, WooCommerce and GA4.
By doing so, you can create a more comprehensive view that offers deeper context beyond just advertising performance.
Dig deeper: 3 steps for effective PPC reporting and analysis
Fundamental PPC metrics
Before diving into advanced metrics, it’s essential to first consider the bread-and-butter metrics. These are the primary data points you review during your daily checks and serve as the foundation for any performance analysis.
Many clients prioritize (and some may even dwell on) these metrics because they are easily understood and have more in common with traditional metrics than the more advanced data. Additionally, these fundamental metrics will serve as the basis for the advanced metrics you examine later.
A quick sample of fundamental metrics would include:
- Impressions: The amount of people who have viewed your ads.
- Clicks: The amount of people that have clicked on your ad.
- Average cost per click (CPC): Cost divided by clicks.
- Click-through rate (CTR): Clicks divided by impressions.
- Unique sessions: Amount of users who have been on your website.
- Conversion value: The amount of revenue generated from a sale.
The above metrics often serve as the foundation for most basic PPC reports I’ve encountered.
Google typically provides these metrics natively, with only minimal coding needed to enable conversion tracking for conversion value. I still consider this fundamental as it is essential for analyzing performance.
Your advertising objective should focus on improving the click-through rate of your ads and making them more engaging to enhance campaign efficiency.
This, in turn, can increase the number of impressions and clicks, allowing you to scale performance.
Also, aim to decrease the average CPC, which theoretically enables you to generate more traffic for your spending, particularly when stepping up with display ads.
They serve a purpose and need to be the first point of analysis, especially in identifying campaign disruptions. Some examples would include:
- Clicks are down 75% day on day on Performance Max ads? Feed issues.
- Clicks are up 100% day on day on Performance Max ads? Spike in Display channel distribution.
- Average CPC up 25% in brand campaign month on month? A couple of new competitors in the market bidding on your brand keywords.
- CTR down 20% month on month? Those new keywords aren’t relevant enough.
Ultimately, though, all the fundamental metrics won’t be enough to analyze independently if your priority objectives are being met.
Just remember that the next time a client questions why clicks are down 10% year on year or why CTR is down 15%, they need to focus on the fact that POAS is up 25% and LTV is up 15%.
These metrics are directly related to the business objectives, such as becoming more efficient with advertising spend in a year characterized by tougher market conditions and fewer growth opportunities.
Advanced PPC metrics
I mentioned a few above, but some advanced metrics include:
- Return on ad spend (ROAS): Advertising cost divided by conversion value.
- Gross profit: The amount of gross profit you make for each sale.
- Profit on ad spend (POAS): Advertising cost divided by gross profit.
- Lifetime value (LTV): The average value of each user who makes a purchase.
- New user acquisition: The amount of new customers generated.
- Returning user %: The proportion of returning users to your website.
- Brand recall: The % users who can remember your brand from a surveyed group.
All of the above can be linked to a common business objective, which can then be translated into advertising goals.
Some metrics are more challenging to obtain than others — for instance, Google requires a minimum spend of $5,000 on YouTube ads over a 10-day period just to ask one question for its brand lift measurement.
However, only the appropriate metrics are needed for relevant performance analysis.
To elevate your performance analysis, you must shift from relying solely on Google platform data to incorporating a mix of other platforms for a more holistic view.
Google Analytics 4 is an obvious supplemental tool, but you can also use third-party attribution or management software like Triple Whale, Profit Metrics, SMEC and Optmyzr for deeper insights.
While this isn’t always necessary, it becomes a valuable option if your account is large and performance analysis is a collaborative and regular exercise prioritized by the client – especially if Google data alone isn’t trusted.
For instance, Google now tracks lifetime value within the account. However, if tracking was recently installed, it may take time to build accurate data on customer value. More mature and holistic data from other platforms may be used instead in such cases.
Dig deeper: 3 PPC KPIs to track and measure success
Business objective = advertising objective
If expanding the customer base is one of the advertising objectives, identifying and evaluating LTV and new user acquisition will be essential.
Accurate data is critical, so many look beyond Google tracking. When you’re confident in your data – whether for reporting or optimization – it provides the necessary context for performance analysis.
For example, if a customer’s LTV is around $5,000 and the is on focus on acquiring new customers, metrics like conversion value and ROAS become less relevant.
A campaign targeting only new user acquisition might have a ROAS of 100%, which, at first glance, isn’t great since you’ve only generated the same amount you spent.
However, with an average order value of $500 and an LTV of $5,000, your actual ROAS is closer to 1,000% when determining the customer’s future sales.
Accurate evaluation of LTV, combined with precise new user acquisition data, helps achieve your campaign objectives. It also helps identify a target “New User ROAS” that you can regularly analyze and optimize at the campaign level.
If profit is the client’s priority objective, metrics like conversion value and ROAS become less important during performance reviews.
You might have a campaign that generates a 1,000% ROAS (like the example above), but it turns out the client’s margins are very low, and they actually incur a loss with a 75% POAS (where 100% is break-even).
In contrast, another campaign might generate a 500% ROAS, but because the products have better margins, the POAS is 150%.
Without context, anyone analyzing the account would recommend allocating more budget to the first campaign since it achieved double the ROAS.
However, with the business objective in mind, the second campaign would be identified as having the greatest growth opportunity, given its double POAS.
Make your PPC performance analysis more meaningful
When analyzing and reporting on PPC performance, the objectives must remain at the core.
Foundational metrics are important, but clients and businesses often fixate on them during performance discussions. Instead, the focus should shift to advanced metrics that better show whether the advertising channel is achieving its goals.
Too much focus on clicks, impressions and average CPC diverts attention from what truly matters. This can also affect how campaigns are managed, risking a misalignment of priorities and drifting performance.
It’s the account manager’s responsibility to guide clients toward the metrics that matter.
Build your reports and dashboards around relevant KPIs that support the performance narrative and assist in deeper analysis of the account, campaigns, products and services.
This approach will help uncover trends, issues, opportunities and insights that position you for long-term success.