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Heading a SEM campaign? These are a few key metrics

Posted by SMstudy® on April 14, 2017 | Digital Marketing (DM)

Keywords: Digital Marketing, Customer Engagement, Content, Social Media, Blogs

Heading a SEM campaign? These are a few key metrics

Some of the key metrics used to track SEM campaigns are as follows:

  1. Cost—The total amount spent on search advertising, which should fall within set budgets. Cost cannot be evaluated in a vacuum, and one must also consider reach, ROI, and other factors to determine if the cost is justified.
  1. Maximum Cost-Per-Click (CPC)—This defines the maximum amount a business is willing to pay when a potential customer clicks on an ad. A maximum bid is set for each keyword individually and also for a particular Adgroup (default Max. bid). An ad’s average position or rank is most heavily determined by two factors—quality score and maximum bid. While efforts should be constantly directed toward increasing the quality score, Max. bid is a key tool to change the average ad position. This should be used in such a manner that the top performing keywords in any campaign always fall into the desired range of average ad position.
  1. Click-Through Rate (CTR)—Click-through rate is one of most important metrics to measure the performance of digital marketing campaigns. CTR is defined as the number of clicks an ad receives, divided by the number of times an ad is shown. CTR reflects the effectiveness of a keyword and the advertisement that goes with it. CTR can be improved by doing any of the following:
  • Writing effective ads that are highly relevant to the keywords
  • Improving quality scores
  • Creating appropriate landing pages, site links, and extensions
  • Using testimonials and ratings/certification badges from partners and authorized entities
  1. Quality Score—A quality score is the search engine’s measure of the relevance of keywords and ads. It is an important metric because it ensures that users see relevant ads for their searches. Improving the quality score maximizes the effectiveness of a campaign, as CPC drops and average ad position increases. Also, a good quality score is a reflection of effective landing pages, therefore, the conversions are also likely to increase. There are a variety of factors that affect the quality score. Some of those factors are listed below:
    • the click-through rate (CTR) of the keyword and corresponding ad
    • the relevance of the keyword and ad to the search query
    • the relevance of the keyword to its ad group
    • the CTR of the display URLs in the ad group
    • the quality of the landing page
  1. Conversion Rate—Conversion rate is perhaps the most important digital marketing metric to track. This metric shows the ratio of number of people who clicked on an ad and went on to complete the desired action (goal completion) on the website or mobile app to the total number of people who clicked on the ad (total clicks). The desired action can be a purchase, a trial, a sign up, or a form completion. Conversion rate is calculated using the following formula:

          

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