KPIs and Metrics of Online and Digital Marketing

METRICS AND KPIS
Listed here are commonmetrics andperformanceindicators used byonline marketers, affiliates andsite owners to measure and optimise
marketingstrategies andsite performance.
Being able to trackandreport on thesemetrics daily is key to being ontopof anyonline business; oftenit’s easy to overlook someof these
when things are working well. But as soonas revenue drops, or marketing cost start to escalate, understandingthese metrics will ensure
activity can be optimisedandtweaked for efficiencyso site performance cancontinue to beprofitable.
Click Through Rate (CTR) % = Clicks / Impressions
WHATITIS – This metric is generallyusedto measure therate at which visitors are clickingthrough after seeinga piece ofmedia orlink
to a site, for example a paidsearchad, a display banner, oran email.Generally, CTR’s will vary dependingon the media channel. Branded
search CTR’s can be high at around10%, whereas prospectingdisplaybanners wouldlook more like a 1 hundredthoft hat at 0.1%
HOW IT’S USED – It’s not wise to compare adsuccess across different media channels usingCTR’s. However comparingCTR’s forthe
same media type will give indicationof which creative message is encouragingthe most clicks for the audience of traffic it is being
displayedto. For example, for a display campaign using4 different designs of creative,optimisingwhich creative to showwhen usingCTR
can help to increasethe clicks through to landingpage.
PostClick Conversion Rate (CR) % = Conversions / Clicks
WHATITIS – This metric is usedto showthe portionof sitetraffic which is undertakingthe requiredgoal forthe page or site. A
conversion canmeana range ofactions, the most commonbeinga purchase, a registration, a download, a video play, a Facebooklike or a
twitter follow. Clicks in the above formula can be interchangedwith visits dependingon thesource ofthe data.For example, Google
Analytics reports on page visits. Whereas media activity more generally focuses on clicks.
HOW IT’S USED – Understandingconversion rateis an important aspect ofrunninganywebsite, since a conversionis usually the main
revenue driver. The overall day on day conversionrate is a goodhealth indicatorof anysite, andpeaks andtroughs shouldbe observedand
actedupon. It’s also important tobe able to break down conversionrates into smaller segments, typically by traffic source. The more
granular youcan get, the morevisibilityandunderstandingyoucanhave on howeach traffic source is performing, meaningit’s easy totake
steps of optimising – ie tryingto growtraffic fromgoodconvertingsources, andtweakingtraffic frompoorperformingones.
Conversionrate also plays an important part in understandingsite usability. A keyfactor in gettingvisitors toundertake desiredgoals, is to
develop a site conversionfunnel which works at an optimal level. Youmight be seeinga great CTR andtraffic volume to your site, but if
your pages are hardto navigate anddo not promote your product in a clear fashion, youwill see a high Exit rate andlowconversionrate.
PostImpression Conversion Rate (PICR) % = Impression based
Conversions / Impression
WHATITIS – This metric is mainlyusedas another formof understandingconversions in display oremail advertising. Users may be
seeingads that theninfluencethemtovisit a site at a later date, perhaps via search.
HOW IT’S USED – This metriccan be usedin sneaky ways! For example,the performance ofa display campaign can be seen tobe
workingwell even if clicks are low, by lookingat PICR. However, onthe flipside it can give an understandingof any uplift inconversions.
Cost Per Click (CPC)£ = Marketing Cost / Clicks
WHATITIS – Cost per click is quite literally, theamount that eachadclick is costingtogenerate. It is a very commonmetric in Search
advertising, andalso usedin display networks. CPC’s arecommonly usedas the biddingmetricin searchauctions as the maximum click
price advertisers are preparedtopay, varyingdependingonthe competitiveness andbuoyancy ofthe market.
Cost Per Acquisition (CPA)£ = Marketing Cost / # Acquisitions
WHATITIS – This metric is a key performance indicator for understandinghowmuch it’s costingtogenerate an“acquisition”. Theterm
acquisition is just anotherwordfor conversion.
HOW IT’S USED – An effect way of planningmarketingbudget is to knowin advance howmuch can be spendongeneratinga single
conversion basedon the revenue as a result of a conversion. Knowingthis will mean marketingbudgets can be plannedefficiently. Also,
once campaigns are running, it is important tobe able to calculate the CPA tounderstandwhat areas of the marketingplan areperformingat
the desiredCPA levels.
A point tonoteis that calculatingthe true CPA is not always a simple task, especiallywhen a number ofmarketingspends are beingused.
Understandingwhich marketingcosts contributedtowards generatingthe acquisitionhas openedup a whole industry of marketingtracking

tools, andsparkedmuch debateover conversionattribution. Overall it’s important not to be too narrowin analysingCPAs, but ratherlook
across all touch points a user had(andtheir associatedcosts) before convertingon site. Readmore fromonesuch attribution tool DC Storm.
Cost Per Lead (CPL)£ = Marketing Cost / # Leads
WHATITIS – usually used by affiliates to quote a fixedprice for the cost ofa lead, where a leadis some form ofcustomer detail for
example an email address or mobile number. It is also a KPI for indicatinghowmuch it is costingto generateleads for a sit e doing
marketingtobuilda customer database.
HOW IT’S USED – Understandingthe value achievable offthe back ofleadis the HolyGrail for business where their models require
revenue generationfroma customerdatabase. Andknowingthis figure can dictate (in a similarway to CPA above) howmuch can be
affordedon generatingthese leads.
Return on Investment (ROI) % = ( Revenue – Marketing Cost ) /
Marketing Cost
WHATITIS – ROI shows howmuch returnis beingachievedforthe cost ofgeneratingthe revenue. The reason it’s important toconsider
alongwith CPA is that is takes intoaccount theamount of revenue produced. CPA does not, andtherefore treats everysale with the same
value
HOW ITIS USED – Similarly to CPA, ROI shouldbe usedto analyse the performance ofmarketingspend. An ROI benchmarkshouldbe
set for marketingbudgets, so that activitycanbe quickly reviewedfor it’s efficiencyandsuitability for the business.
Email Specific KPIs
Delivery Rate % = # Delivered Emails / # Sent Emails
WHATITIS – When sendingemails tolarge databases, not all email addresses in thelist will gain delivery. The delivery rateis a measure
which shows the portion ofemails that were deliveredout of the total emails broadcast.
HOW IT’S USED – First off, it gives insight into thequality ofthe database beingemailed. It also will give insight intothe sendingscore
of the Email sender. Large ISPs pay closeattentiontosender score, andwill potentiallyblock orblacklist senders that appear to be
spammers. Deliveryrate is the first line in understandingtheefficiency ofyour send, andif your emails are gettinginto real andlive
inboxes.
Bounce Rate % = # Email Bounces/ # Sent Emails
WHATIS IT – A bounce is when an email is triedto be delivered, but does not reachthe emailinboxandhence “bounces” back to the
sender. Bounces come in 2 main forms – hardandsoft.A hardbounce is when the email is returnedtothe sender because the email address
is invalidanddoes not exist. A soft bounce is when theISP can findtheemail inbox,but can’t deliverit for some reason,forexample the
inbox is full. In general, gooddatabase hygieneshouldinvolvedmonitoringandfilteringbouncedemails out of a list.
Email Open Rate % = # Emails Opened / # Emails Received
WHATITIS – Email open rate measures the percentage ofpeoplewho open an email as part ofan email marketingsend. Openingan
email implies that the opener is interestedin some way in the email, hence anemail openshows positive interaction. It’s worthnothingthat
not all openstats will be real people,for examplesome email clients such as outlook have“autoopen”options when the email is viewedin a
previewpane.
HOW IT’S USED – Email openrate is the first KPIup an email marketers sleeve for feedbackonan emails ability to gain interest – anda
large part of this comes down to the email subject line. So email open rate is a primaryKPI for accessingthe effectiveness of subject lines.
Email Click Through Rate (Email CTR) % = # link clicks / # emails
opened
WHATITIS – Similar to adCTR above, email CTR is a measure of the portion ofpeople undertakinga desiredclick on a link withinan
email, out of all thepeoplewho openedthe email.
HOW IT’S USED – Email CTR indicates if the email content is encouragingandsufficient enough to get a reader to clicktothe desired
landingpage. Usually, a clear Call To Action is requiredtoget an increase in ClickThrough Rate, andalso theemail subject line must be
relavent tothe actual email content.Oftenemails will have a number oflinks potentiallyin different places in the email.TrackingEmail
CTR down to each link means it is possible to assess the performance ofeachlink,andtherefore the email canbe optimisedt o encourage
maximum CTR.
Unsubscribe Rate % = # Unsubscribe requests / # Emails Sent

WHATITIS – Unsubscribe rate shows the proportionof people that an email causedthemtounsubscribe fromthe mailinglist, indicating
that theyfeel they email was irrelevant totheirinterests andunwanted.
HOW IT’S USED – I have previously writtenabout the importanceof watching email unsubrates in relationtodatabase management –
ensuringyouhave a simple unsubmechanismis important, as is also ensuringthat your unsubis either not toohigh compared toother
emails sent, or does not rise due to changes in email sendingstrategy.
Cost Per Thousand Emails (CPM) £ = ( Email Cost / Emails Sent )
x 1,000
WHATITIS – This is the cost of sending1,000 emails.
Revenue PerThousand Emails (RPM) £ = ( Email Revenue / Emails
Sent ) x 1,000
WHATITIS – This is the revenue generatedper 1,000emails sent.
HOW IT’S USED – RPM is usedwhere the goal of emailmarketingis to generate revenue. It is a measure that shows therevenue
performance relative to thesize of the send, andcan be offset against the CPM to showthe profitabilityof the email send.
Display Ad Click Metrics Can No Longer Be
Defended
Posted by Robert M. Brecht, Ph.D. | May 15, 2012
Impressions and clicks have long dominated the metrics of online advertising. Yet these two
metrics may be the least important metrics in measuring the effectiveness of any particular
banner or display ad.
Ad Impressions reported by ad networks simply reports the number of ads that were sent from
the ad server to the user’s browser. The term is misleading because it doesn’t mean that the ad
was ever seen by the user. The ad may have never rendered within the browser or may have
loaded below the fold where the user could only have seen it if they had scrolled down the page.
Clicks on display or banner ads are still the standard way success is measured when reporting
results from online ad campaigns. It’s a logical assumption that clicks on ads that lead to pages
designed to convert visitors would be the most important measure in attributing the value of a
lead or sale.
A study released in April by ComScore and Pretarget questions these two fundamental metrics.
Over a 9 month period, Pretarget and ComScore undertook a large scale study of 263 million ad
impressions across 18 different advertisers. They gathered not only typical ad reporting data
such as impressions and clicks but also other data including viewability and hover data. Clicks
and cookie-based conversion data were also collected for the ads served. Conversion was
defined as either a purchase or a request for information.
A Pearson correlation analysis of ”gross impressions,” “views” (defined as 75 percent of the
pixels of an ad being visible in a browser either above the fold or after scrolling), “time-in-view,”
“hover/engagements” and “total hover/engagement time,” ”clicks” and ”conversions.”
The Pearson product-moment correlation coefficient is widely used in statistics to measure the
strength of linear dependence between two variables. The correlation coefficient value ranges

from minus one to plus one (-1 to +1). A value of plus 1 denotes a direct linear relationship
between the two variables while a value of minus 1 shows a direct inverserelationship between
two variables (as one goes up the other goes down).Ä coefficient value of 0 means no linear
correlation between the two variables.
What they found should lead to a reevaluation of Key Performance Indicators (KPIs) for online
display and banner advertising campaigns. The metric with the highest correlation with
conversion was ad hover/interaction with a correlation coefficient value of 0.49. Viewable
correlations had the second highest correlation (coefficient value = 0.35) followed by a
significantly lower gross impressions correlation (coefficient value = 0.17).
What should be most interesting for online advertisers is that the correlation coefficient value
between the variables of clicks and conversions was 0.01! Let me repeat this finding: this study
found no statistical correlation between ad “clicks” and conversions!
This study, along with other studies with similar conclusions should make online advertisers
change the metrics they are using. MediaMind’s “2009 Benchmark Report" released in 2010
revealed that increasing average Dwell (hover) time from 5 percent to 15 percent increased
conversion rate by 45%. In another study, Casale Media’s 2011 “Ad Visibility Report” showed
that ads that appear above the fold were 6.7 times more effective at producing conversions than
ads appearing below the fold.
It’s time for advertisers to look at their attribution models and definitions of KPIs. If you measure
the success of your online advertising by looking at the last click to determine a display ad’s
effectiveness you are missing the boat entirely. If you are using ad impressions as a KPI, there
are better metrics to use.
Advertisers and their agencies should be paying close attention to how they measure the
effectiveness of their online advertising campaigns. Clicks would appear to be a poor indicator of
resulting conversions. These studies bring a new dimension to the shift away from last click to
multi-touch attribution modeling underway.
32 Key Performance Indicators (KPIs) for
Ecommerce
Performance should inform business decisions and KPIs should drive actions.
Key performance indicators (KPIs) are like milestones on the road to online retail success. Monitoring
them will help ecommerce entrepreneurs identify progress toward sales, marketing, and customer
service goals.
A performance indicator is simply a quantifiable measurement or data point used to gauge
performance relative to some goal. As an example, it may be a goal for some online retailers to
increase site traffic 50 % in the next year. Relative to this goal, a performance indicator might be the
number of unique visitors the site receives daily or which traffic sources send visitors (pay-per-click
advertising, search engine optimization, brand or display advertising, or a YouTube video).

For some goals there could be many performance indicators — often too many — so often people
narrow it down to just two or three impactful data points known as key performance indicators. KPIs
are those measurements that most accurately and succinctly show whether or not a business in
progressing toward its goal.
Setting Goals and Identifiying KPIs
Selecting KPIs begins with clearly stating goals and understanding what areas of business impact
those goals. Of course, KPIs can and should differ for each of an online retailer's goals, whether those
are related to boosting sales, streamlining marketing, or improving customer service.
Here are a few examples of goals and associated KPIs:
 GOAL 1 — Boost sales 10% in the next quarter. KPIs include daily sales, conversion rate, site traffic.
 GOAL 2 — Increase conversion rate 2% in the next year. KPIs include conversion rate, shopping cart
abandonment rate, associated shipping rate trends,competitive price trends.
 GOAL 3 — Grow site traffic 20 percent in the next year. KPIs include site traffic, traffic sources,
promotional click-through rates, social shares,bounce rates.
 GOAL 4 — Reduce customer service calls by half in the next 6 months.KPIs include service call
classification, identify of page visited immediately before the call, event that lead to the call.
It should be easy to see that there are many performance indicators, and the value of those indicators
is directly tied to the goal progress measured. Monitoring which page someone visited before initiating
a customer service call makes sense as a KPI for GOAL 4 since it could help identify areas of
confusion that when corrected would reduce customer service calls, but that same performance
indicator would be almost useless for GOAL 3.

With the idea that KPIs should differ based on the goal being measured, it's possible to consider a set
of common performance indicators for ecommerce. Here are 32 common ecommerce key
performance indicators. Just remember that the performance indicators listed below is in no way
exhaustive.
32 Key Performance Indicators
Sales Key Performance Indicators:
 Hourly, daily, weekly, monthly, quarterly, and annualsales
 Average order size (sometimes called average market basket)
 Average margin
 Conversion rate
 Shopping cart abandonment rate
 New customer orders versus returning customer sales
 Cost of goods sold
 Total available market relative to a retailer's share of market
 Product affinity (which products are purchased together)
 Product relationship (which products are viewed consecutively)
 Inventory levels
 Competitive pricing
Marketing Key Performance Indicators:
 Site traffic
 Unique visitors versus returning visitors
 Time on site
 Page views per visit
 Traffic source
 Day part monitoring (when site visitors come)
 Newsletter subscribers
 Texting subscribers
 Chat sessions initiated
 Facebook, Twitter, or Pinterest followers or fans
 Pay-per-click traffic volume
 Blog traffic
 Number and quality of product reviews
 Brand or display advertising click-through rates
 Affiliate performance rates

Customer Service Key Performance Indicators:
 Customer service email count
 Customer service phone call count
 Customer service chat count
 Average resolution time
 Concern classification
Once you have set goals and selected KPIs, monitoring those indicators should become an everyday
exercise. And most importantly: Performance should inform business decisions, and you should
use KPIs to drive actions.
The 10 Marketing KPIs You Should
Be Tracking
Estimated Reading Time: 5 minutes
When it comes to setting and tracking your
marketing KPI's, many marketers and business
owners are fully aware of the usual suspects.
Sales revenue. Leads. Cost per acquisition.
But there are a number of other KPI's that you
should be tracking in order to execute a more
successful marketing campaign.
No one wants to support a marketing activity that's losing their company money. By tracking the
right marketing KPI's, your company will be able to make adjustments to various strategies and
budgets.
Without the right KPI's, your company might be reporting and making decisions based on
misleading information. In addition to this article, we've also detailed how to fix the 6 critical
marketing KPIs your boss actually cares about here.
The 10 Most Important Marketing KPI's to
Track

1. Sales Revenue
How much revenue has your inbound marketing campaign brought your company?
Understanding your sales revenue is important to know how effective your inbound marketing
campaign is, no company wants to spend money on something that isn't generating money.
For the moment think of inbound marketing as pay per click, if your sales revenue from direct
mail was less than the money you spent for that campaign, why would you continue using direct
mail? Most likely you would move that money to other marketing activities. To determine
your sales revenue from inbound marketing you would have to define what you mean by inbound
and outbound marketing.
Inbound marketing activities include:
 Developing premium content
 Podcasts
 Blogging
 Infographics
 Social Media Engagement
 Pay Per Click
Outbound marketing activities include:
 Direct mail
 Television ads
 Advertising
 Telemarketing
Another critical element is capturing sales data directly via your CRM integration and closed loop
reporting. You can calculate your sales revenue from inbound marketing by utilizing the
following calculation.
(Total sales for the year) - (Total revenue from customers acquired through inbound
marketing)
2. Cost Per Lead
Not only do you want to calculate your customer acquisition costs for inbound marketing, but
outbound marketing as well. How much is it costing you to acquire a customer through inbound
marketing versus outbound marketing? When calculating your customer acquisition costs, it
requires the integration of your marketing automation and CRM platforms as well as accounting
for all relevant costs associated with ERP integration.
Calculating CAC for inbound marketing, relevant costs include:
 Manpower (creative and technical)
 Technology and software
 General overhead
Calculating CAC for outbound marketing, relevant costs include:
 Advertising
 Marketing distribution
 Manpower (sales and marketing)
 General overhead
Once calculating the costs associated with your inbound and outbound marketing campaigns, you
can directly account for new sales, as well as allocate particular budgets for each campaign. If

you company is utilizing mostly inbound marketing, you can break down that component further
by campaign types assess how successful and profitable each activity is.
3. Customer Value
With inbound marketing, there is no better way to reach out to your current customers. Not only
can it help you keep in contact with leads, but it also helps reduce churn and expand your
customers lifetime value.
You can calculate the lifetime value of your customers by utilizing the following calculation:
(Average sale per customer) X (Average number of times a customer buys per year) X
(Average retention time in months or years for a typical customer)
A great way to increase the lifetime value of your customers is by developing lead nurturing
campaigns that reach out to existing customers. Providing you and your sales team the
opportunity to inform existing customers about new services, products and resources.
4. Inbound Marketing ROI
Every company wants to see their return on investment! Calculating your inbound marketing
return on investment is huge to help assess your monthly and annual performance. Equally
important is the ability to start planning strategies and budgets for the following year or even
months. No matter what marketing activity your company is using, your return on investment will
determine the future with that activity. You don't want to continue adding money or increasing
your budget for a marketing activity that is costing your company money.
5. Traffic to Lead Ratio
Understanding your website traffic, especially knowing where your traffic is coming from,
whether it's organic, direct, social media or referrals is extremely important. Is
your trafficcontinually increasing or is it dropping? Not only do you need to ensure that your
traffic is meeting the goal you set for the month, but also make sure your visitor to lead
conversion rate is between 2 to 4 percent.
6. Lead to Customer Ratio
After all of your marketing efforts, it's important to know how many leads your sales team is able
to close. You will want to calculate both your sales qualified lead conversion rate and sales
accepted lead conversion rate.
What's the difference between the two?
 Sales Qualified Leads are leads considered to be sales ready based on their lead score or specific
activities/triggers they completed. Most companies would consider a lead who filled out a form,

such as "contact a rep" a lead who is ready to buy your service or product. For example, a waste
management company with a lead who filled out the form "rent a dumpster", would be
considered a sales qualified lead.
 Sales Accepted Leads are leads your sales team considers opportunities, and have either
contacted the lead directly or a scheduled call.
This marketing KPI is extremely useful for sales and marketing to help determine how successful
their campaigns are.
Ask yourself the following questions:
 Is my campaign capturing leads?
 Is our CRM successfully passing qualified leads to sales at the right time?
 Do you have high close rate?
7. Landing Page Conversion Rates
Is your content generating conversions? A great well to tell if your landing pages are converting
visitors is to see how many people are visiting each landing page and identifying how many of
those visitors are completing your lead capture forms.
One reason people might not be converting is your content! Are you creating remarkable content
that will make your visitors convert into leads? If your landing pages aren't generating conversion
rates around 10-20% you might need to edit your content. Another great way to increase
conversions would be to optimize your landing pages and call to actions by performing A/B tests.
8. Organic Searches
What percentage of your traffic is from organic searches?
The traffic to your site generated by organic searches can be directly correlated with your search
engine optimization strategy. Some great metrics to help you identify where you organic search
traffic is coming from include:
 Number of lead conversions assisted by organic search
 Number of customer conversions assisted by organic search
 Percentage of traffic associated with branded keywords
 Percentage of traffic associated with unbranded keywords
Those are four really great metrics to help your company gain a better understanding of
your brand awareness, content marketing effectiveness, as well as the impact of your SEO
strategy.

9. Social Media Reach
You might be wondering what your social media reach and engagement have to do with your
marketing KPI's. Well, social media is a huge component of your inbound marketing strategy,
allowing you to engage and share content with users. You can show your senior management
team the value of social media through the growth and engagement of your social media profiles.
Social media engagement can include anything from likes, comments, retweets, shares, mentions
and many more.
Metrics you can utilize to show the importance and impact of social media on your marketing
efforts include:
 Number of lead conversions assisted by each social media channel
 Number of customer conversions generated through your social media channels
 Percentage of traffic associated with social medie channels
With social media sites like Twitter, Facebook, LinkedIn Google+, Pinterest and Instagram you
might not have all the time in the world to effectively utilize every platform. Break down the
number of leads, customers and percentage of traffic coming from each platform.
Why would you spend 10 hours a month engaging and interacting on Google+ when 55% of your
traffic generated through social media is coming from LinkedIn?
10. Mobile Traffic, Leads and Conversion Rates
You cannot forget the increasing amount of traffic, leads and customers being produced through
mobile devices like Smartphones and tablets. Is your website effectively optimized for mobile?
One way you can tell if your company is generating traffic and leads through mobile is to
calculate the following metrics:
 Number of lead conversions from mobile devices
 Bounce rates from mobile devices
 Conversion rates from mobile optimized landing pages
You don't only want to see how many visitors are converting through mobile but you also want
some indication of how effective your mobile presence is.
Understanding Key Performance Indicators (KPIs) –
Complete Guide
Analytics 66
i nShar e
What I am going to do next is, explain KPIs to you in a way that is instantly useful and I am planning to make
you a KPI Champion in just 10 minutes
What is a KPI?
KPI stands for ‘Key performance Indicator’.

It is a metric which is used to determine how you are performing against your business objectives.
A metric can be a number or a ratio. So w e can have ‘number metrics’ and w e can have ‘ratio metrics’.
For example: Visits, Pageview s, Revenue etc are number metrics because they are in the form of numbers.
Bounce rate, Conversion rate, Average order value etc are ratio metrics because they are in the form of ratios.
Since KPI is also a metric, we can have KPIs in the form of numbers and ratios. So we can have ‘number KPIs’ and we
can have ‘ratio KPIs’.
For example: Days to purchase, visits to purchase, Revenue etc are number KPIs.
Conversion rate, Average order Value, Task completion rate etc are ratio KPIs.
Difference between a Metric and KPI
A metric graduatesto KPI.
How ever in order to make this happen the metric must hugely impact the business bottomline. This is possible only
w hen the metric has the ability to provide recommendation(s) for action w hich can a huge impact on the business
bottomline. So
Your KPI must have the ability to provide recommendation(s) for action which can hugely impact the business
bottomline.
For example, ‘Average Order Value’ can be used as a KPI because it hugely impacts the business bottomline. You can
greatly increase sales at the present conversion rate just by increasing the size of the orders.
Revenue per click, Revenue per visit, Revenue per acquisition, Cost per acquisition, Task completion rate etc. are other
examples of metrics w hich can be used as KPIs.
How to find a good KPI?
1. Before you start the process of finding KPIs, you must acquire a very good understanding of your business and its
objectives.
2. Then you need to translate your business objectives into measurable goals.
3. Once you have determined your goals, you will select KPIs for each of these goals.
You w ill use these KPIs to measure the performance of each goal.
Goals are specific strategies you used to achieve your business objectives.
Your business objective can be something like ‘increase sales’. Your goal could be something like ‘increase sales by
5% in the next 3 months by increasing the average order value from x to 2x’.
Any metric which has the ability to directly impact the cash flow (revenue, cost) and/or conversions (both
macro and micro conversions) in a big way can be a good KPI.
For example if you sell display banner ad space on your w ebsite and display advertising is the main source of revenue
for you then ‘pageview s’ can be used as a KPI. The more pageview s you get, the more you can charge for every
thousand impressions (CPM) from your advertisers.
If you are not sure w hether or not a metric can be used as a KPI, then try to correlate it w ith revenue, cost and/or
conversions over a period of time (3 or more months).

You need to prove that there is a linear relationship between your chosen KPI and revenue, cost and/or
conversions
i.e. as the value of your KPI increases or decrease there is a corresponding increase or decrease in revenue,
cost and/or conversions.
Can you use ‘number of twitter followers’ as a KPI?
The answ er is ‘NO’, not unless you can correlate number of tw itter follow ers w ith revenue, cost and/or conversions i.e.
as the number of tw itter follow ers increases or decreases there is a corresponding increase or decrease in revenue,
Even if somehow you are able to correlate the number of tw itter follow ers w ith revenue, cost and/or conversions you still
need to prove that the correlation has huge impact on the business bottomline.
Just because a metric impacts the business bottomline, does not automatically make it a good KPI.
Can you use ‘number of facebook fans as a KPI?
The answ er is ‘NO’, not unless you can correlate number of facebook fans w ith revenue, cost and/or conversions
i.e. as the number of facebook fan increases or decreases there is a corresponding increase or decrease in revenue,
Even if somehow you are able to correlate the number of facebook fans w ith revenue, cost and/or conversions you still
need to prove that the number of facebook fans has huge impact on the business bottomline.
Just because a metric impacts the business bottomline, does not automatically make it a good KPI.

Can you use ‘Phone Calls as a KPI?
The answ er is ‘yes’ provided majority of your revenue comes through Phone calls.
You can easily track phone calls through ‘phone calls tracking’ software and then import phone calls data into Google
Analytics. Once the data is imported you can tie phone calls to revenue, cost and/or conversions to determine
correlation.
Here there is one thing to keep in mind.
A KPI doesn’t need to be a metric available in Google Analyticsreports.
You can use metrics from other analytics tools too.
For example ‘Phone call’ metrics is not available in Google Analytics reports by default but this doesn’t mean that w e
can’t use it as a KPI.
Similarly, ‘Task completion Rate’ metric is not available in Google Analytics reports. How ever you can calculate ‘Task
completion Rate’ through a survey tool like Qualaroo and use it as a KPI.
Task completion rate is the percentage of people who came to your website and answered ‘yes’ to this survey
question: “Were you able to complete the task for which you came to the website?”
Can you use Clients’ Happiness as a KPI?
The answ er is ‘NO’. This is because a KPI is a metric and metric is a number or a ratio. In other w ords,
metrics is something which can be measured in the first place.
How you can possibly quantify a human emotion like ‘Happiness’?
Types of KPIs
There are tw o broad categories of KPIs:
1. Internal KPIs
2. External KPIs
Internal KPIs
These KPIs are internally used by team members to measure and optimize their marketing campaigns’
performance. They are not alw ays reported to clients/boss/senior management.
Internal KPIs don’t need to be business bottomline impacting either.
For example follow ing KPIs can be used to measure your link building outreach campaigns:
1. Delivery Rate
2. Open Rate
3. Response Rate
4. Conversion Rate of outreach
5. ROI of outreach
Often marketers make this terrible mistake of reporting internal KPIs to clients/senior management.

For example ‘Bounce Rate’ is a good Internal KPI for optimizing landing pages. But it is not something w hich you w ill
report to a CEO. We report only hugely business bottomline impacting KPIs to senior management.
Related Post: How to become Champion in Data Reporting
External KPIs
These are the KPIs w e report to clients/senior management and use them to create ‘Web Analytics Measurement
Models’ (strategic roadmaps) for businesses.
External KPIs must be hugely business bottomline impacting.
Whenever w e talk about KPIs in general, w e are referring to external KPIs. Some examples of external KPIs:
1. Average Order Value
2. Conversion Rate
3. Revenue
4. Revenue per acquisition
5. Cost per acquisition
6. Task Completion Rate
7. Goal conversions
Note: External KPIs can also be used as internal KPIs. There is no hard and fast rule here.
Attributes of a Good KPI
A Good KPI has follow ing attributes:
1. Available and Measurable
You can use only those metrics as KPIs w hich are available to you in the first place. For example if ‘Net Promoter
Score’ metric is not available to you then you can’t use it as a KPI.
Similarly if you come up w ith something w hich is impossible to measure (like ‘frustration level of customers w ho
abandoned the shopping cart for the 3rd
time’) then you can’t use it is as a KPI.
So w hen you are finding your KPI,
you need to be 100% sure that there is a mechanism/tool available out there to measure and report your KPI in
the first place.
2. Hugely business bottomline impacting
If a metric does not greatly impact the business bottomline then it is not a good external KPI.
3. Relevant
If your KPI is hugely business bottomline impacting then it is got to be relevant to your business objectives. Conversely,
if your KPI is not relevant to your business objectives then it can’t be business bottomline impacting either.
4. Instantly useful
If your KPI is hugely business bottomline impacting then it is got to be instantly useful i.e. you can quickly take actions
on the basis of the insight you get from your KPI.
5. Timely
Your KPI should be available to you in a timely manner so that you can take timely decisions.
For example if you are using a compound metric (a metric w hich is made up of several other metrics) as a KPI and it
takes several months to compute it once and then another several months to compute it second time then it is not a
good KPI as you can’t take timely decisions on the basis of such KPI.

Examples of Good KPIs
KPI Meaning Formula
1 Gross Profit
It is the profit after production and
manufacturing cost.
Gross Profit = Sales Revenue – Direct Cost
Direct cost can be somethinglike cost of
manufacturing a product
2
Gross Profit
Margin
It is used to determine the effectiveness of your
business in keeping production cost in control.
Higher the gross profit margin, more the
money is left over for operatingexpenses and
net profit.
Gross Profit Margin = (Gross Profit/ Revenue) *
100
3
Operating
Profit
It is the profit before interest andtaxes.
OperatingProfit = Sales Revenue – Operating
Cost
Operatingcost is the ongoingcost of running a
business, product or system. It can include both
direct and indirect costs.
4
Operating
profit margin
It is used to determine the effectiveness of your
business in keeping operatingcost in control.
Higher the operatingprofit margin, more the
money is left over for net profit.
OperatingProfit Margin = (OperatingProfit/
Revenue) * 100
5 Net Profit
Also known as net income, net earnings,
bottomline. It is the profit after interest and
taxes.
Net Profit = Sales Revenue – Total cost (this
includes any direct and indirect cost + interest +
taxes)
6
Net Profit
Margin
Also known as profit margin, net margin, net
profit ratio. . It is used to determine the
effectiveness of your business in converting
sales into profit. Lowprofit margin indicates
higher risk, that a decline in sales will erase the
profit andresult in net loss. Net Profit Margin = (Net Profit/ Revenue) * 100
7
Revenue
Growth Rate
Also known as sales growth rate. It is the
measure of the percentage increase in sales
between two time periods.
Revenue Growth Rate = (Current month’s
Revenue- Last month’s Revenue) / (Last month’s
Revenue) * 100
8
Total
Economic
Value
It is the total value added by your
product/service/campaigns to the business
bottomline. It also take into account the role
played by micro conversions and conversions
which assisted and completedthe sales.
Total Economic Value = Total Revenue+ Total
value of the assisting conversions + Total value
of the last click conversions
9
Return on
Investment
(ROI)
It is used to evaluate the efficiency of your
investment or to compare the efficiency of
different investments.
ROI= (Gain from investment – cost of
investment)/cost of investment
10
Net Promoter
Score
It tells how likely it is that your customers will
recommendyour business to a friend or
colleague. Click here for more details.
Net promoter score = % of promoters – % of
detractors

11
Customer
lifetime value
It is the projected revenue (repeat business) a
customer will generated during his lifetime.
Different types of customers have different life
time value (LTV). One of the best ways to
boost LTV is by improvingcustomer
satisfaction.
(Average order value) X (Number of Repeat
Transactions) X (Average customer life span in
months/years)
Average customer life span means how long
he/she remains your customer.
12
Customer
retention rate
It is used to determine how good your company
is in retainingcustomers.
Customer Retention Rate = [1- (Customers lost
in a given time period/total number of customers
acquired in the same time period)] * 100
13
Customer
profitability
score
This score is used to separate profitable
customers from unprofitable customers.
Customer profitability score = Revenue earned
through a customer – cost associated with
customer’ management/service/retention
14 Cost per lead
It is the average cost of generating a lead. Cost per lead = total cost/total leads
15
Cost Per
Acquisition
It is the average cost of acquiring a customer or
generating a conversion
Cost Per Acquisition = Total Cost/ Total
acquisitions
16
Revenue Per
Acquisition
It is the average revenue earned through an
acquisition
Revenue Per Acquisition = Total Revenue/Total
acquisitions
17
Per Visit
Value
It is the average value of a visit to your website. Per Visit Value = Total Revenue/Total Visits
18
Conversion
Rate
It is the percentage of visits which results in
goal conversions or ecommerce transactions.
Conversion Rate = (Total Goal conversions/ E-
commerce transactions/ total visits) *100
19
Average
Order Value
It is the average value of an ecommerce
transaction. Through this metric youcan
measure how effective your upselling and cross
selling efforts are and whether you are helping
people in finding the product they are looking
for.
Average order value = Total Revenue/Total
ecommerce transactions
20
Task
Completion
Rate
It is the percentage of people who came to your
website and answered ‘yes’ to this survey
question: “Were you able to complete the task
for which youcame to the website?”
Task completion rate = (number of people said
‘yes’ to the survey question/ Total number of
survey responses) *100
There is virtually no limit to the number of good KPIs you can find.
It all depends upon the nature of the business and the industry you w orkin.
For example if you w ork in an industry w here majority/all of the conversions happen offline via phone calls then you can
use ‘Phone Calls’ as your KPI.
Read more: http://w w w.seotakeaw ays.com/understanding-key-performance-indicators-kpis-just-like-
that/#ixzz31hSlO8Bv

Forget Click-Through Rate: 10 Metrics
To Track For Display Advertising
October 14th, 2013 - 12:05 amBy AdExchanger
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"Data-Driven Thinking" is written by members of the media
community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Sean Callahan, marketing director at Bizo and editor at Digital
Marketing Remix.
Digital ad spending continuesto climb, with US budgets expectedto reach$42.5 billionthis year
and grow to $60.4 billionin 2017, accordingto eMarketer. Despite this growth, marketers still
struggle to prove their digital effortsare working.
Digital advertising has been and continues to be one of the most difficult ad mediums to
measure. Advertisersoftenfeelunsure about what metrics point to success. To prove their digital
investments are worthwhile, they rely heavily onmeasurements such as the click-throughrate,
which is thought to demonstrate a target audience’s interest.
There’sa problem with this approach. While marketerscreate brand awareness at the topof the
funnel and focuson educating prospectsin the middle of the funnel, successis still pinned on
click-throughratesand other metricsthat point to leads and conversion, which are historically
bottom-funnel metrics. Thisis especially true with display advertising.
With the B2B sales cycle gettinglonger, it’s imperative that marketersmeasure programs based
on what they want to achieve at each stage of the funnel. Thiswill enable them to take a true
pulse of their growth and stay focusedon drawing new prospectsinto the funnel.
Using CTR to measure display ad performance may make sense for the bottom of the funnel, but
it doesn’t work for the top or middle of the funnel.
Here are 10 other metrics marketerscan use to measure the performance of display advertising:
Top-Funnel Metrics
Display ads can be used as a branding vehicle. It can be just as effective asTV, but it’s more cost-
effective andyoucan measure it more accurately.

Creative that is geared toward the bottom of the funnel oftenhas strong callsto action so that,
when actedupon, the user is effectively sayingthey are ready to move forwardwith your product.
However, much of the audience youhit with display ads may not be aware of who youare just
yet. In short, it’s equally important to deliver creative adsthat focuson driving brand awareness
and educating your audience.
Many of these metrics depend on benchmarking, so marketersshould measure, for instance,
their branded search prior to a display campaign in order to gauge the lift when the display
campaign is running. It’s important to note that metrics can vary fromindustry to industry and
from company to company. The best way to gauge the performance of display ads is to measure
them against your own brand’s performance when they’re not running.
1. Brand Recall: To measure the effectivenessof a branding display ad campaign, youcan
commission an online brand study comparing the increase in awareness of your brand among
people who have seen your ad vs. people who haven’t.
2. Branded Search: Likewise, when your online advertising campaign is running, youshould
see a lift in the number of searchesfor your company or productson Google or other search
engines.
3. Direct Website Traffic:Thislast metric is helpful to monitor for the top of the funnel.
During an online banner campaign, your website analyticstoolsshould show an increase in
visitorswho have typedin your brand name and arriveddirectly at your website.
Mid-Funnel Metrics
As I mentioned before, the mid-funnel is really focusedon engaging and educating
prospects. When running a display campaign that is focusedon education, there are several
metrics that will help youunderstand what’s working so youcan keep drivingprospectsdown the
funnel.
4. Cost Per New Website Visitor: To calculate the cost of acquiring new prospects, divide
your totalcampaign cost by the number of new visitors. Thiswill give youthe cost per new
website visitor.
5-6. Page View Lift and Web Form Lift:While display ad campaigns are running, marketers
should see target prospectsviewing more pages on their websites and completing more formsas
they download gated whitepapers and other content. The two successmetrics to track to here are
page view lift and Web form lift, respectively.
It’s important to understand the true impact of your advertisingeffortsso youcan identify what’s
working and what’s not so youcan then put more wood behind the arrow of what’s driving
success.
Bottom-Funnel Metrics
By now you’ve gained brand awareness and have educated and engaged your prospects. It’stime
to turn those prospectsinto leads.
7. Total Leads:Bottom-funneldisplay ads can drive your target audience to your website,
where youcan entice them to share their contact informationby filling out your Web forms. The
compilation of all contactswhose information you have can be considered totalleads.
8. Cost Per Lead: Youcan also measure the performance of your bottom-funneldisplay ads by
tabulating cost per lead, which is the number of leads dividedby totalcost of the ad program.
9. Opportunity Contribution: Lower-funneldisplay advertising should also provide a boost
in opportunitiesthat make it into your sales pipeline. Thisis known as opportunity contribution.
10: Revenue Contribution: Likewise, when bottom-funneladvertising is running, youshould
see a boost in revenue contributionand totalclosed sales opportunitiesthat originated from
marketing. A comScore study foundthat companies combining display and search advertising
saw a 119% lift in attributedsales.
Takinga look at all these metrics will make it much easier to get a handle on the realinfluence
your campaign is making. When youjust look at conversions, youdon’t get the full picture.
But by taking this full funnel approach, it puts youin a better position to nurture prospectsdown
the funnel.
What other metricsare youtracking?

Google Adwords Analytics – Complete Guide
Analytics 18 Comments 91
i nShar e
Google Adw ords Analytics is the analysis of the marketing campaigns w hich run on Google Adw ords , one of the most
popular advertising systems in the w orld. If you do multi-channel marketing for your company than you simply can’t
afford to ignore this paid channel. In order to get optimum results from your Adw ords campaigns you must possess
good practical know ledge of how Adw ords w orks and how different campaigns, ad groups, keyw ords and landing pages
are analyzed and optimized for traffic and conversions.
Google Adwords Analytics process consists of following four phases:
1. Preparation
2. Configuration
3. Analysis
4. Recommendation
Here the output of each phase provides valuable insight for the next phase. So if you skip a phase then you w on’t get
optimum results, from either your analysis or marketing efforts.
Phase-1: Preparation
Preparation is the most important phase of Google Adwords Analytics. The quality of the results that you w ill get
later depends a lot on your preparation. Often marketers/analyst jump straight into analytics reports w ithout doing the
required preparation.
Preparation is investing time and resources in understanding the business, its industry, its products, USP, short term &
long term goals, competition and the target market. If you don’t understand the business, its products, goals and market
then you may never know what to look at and where to look at in any analytics report. You may never know where
to direct your marketing efforts and budget. In short you w ill have hard time moving forw ard in the right direction and
producing optimum results through Adw ords campaigns analysis.

In the Preparation phase w e do follow ing types of analysis by interview ing the client and by brow sing the client’s
w ebsite:
1. Profile Analysis – get a basic understanding of the business, its history, brand story, revenue model, USP,
employee base, client base etc.
2. Products/Services Analysis – get a basic understanding of w hat the products/services are all about? Products cost,
products range, most profitable products, least profitable products, products’ USP etc. How the products are promoted
and sold.
3. Market Analysis – get a basic understanding of the target audience. Who are they, w here they live, w hy they buy the
products, best customers in terms of revenue generation etc.
4. Goals Analysis – get a great understanding of client’s short terms and long term goals (leads, sales, brand
aw areness, increase in market share, client retention etc). Without w ell-defined goals there is no optimization.
5. SWOT Analysis – determine the strengths, w eaknesses, opportunities and threats for your client’s business.
Determine how strengths can be maximized, w eaknesses can be minimized. Determine how opportunities can be
leveraged and how threats can be overcome.
6. Competitors Analysis – determine the top 3 competitors of your client and do profile, product, market, goals and
SWOT analysis for each of them.
The Analytics behind Google Adwords
In order to get the most out of Google Adw ords analytics you must know exactly how Adw ords w orkand how different
Adw ords metrics are calculated. The best w ay of gaining this insight is to actually go out and run Google Adw ords
campaigns yourself for at least couple of months. If you can’t manage it, you can’t measure it. It is as simple as that.
The second best w ay is to understand at least the key concepts behind Adwords system as outlined below . If you
are an experienced Adw ords user, you can skip this section and jump to the next section titled: ‘Secret to getting highest
possible return on your Adw ords Investment’. But there is no harm in reading few more lines. Who know s, you may
learn something new .
CPC, CPM and CPA Bidding options
Whenever a user performs a search on Google (or its search partners), the Google run an auction for clicks know n as
the Adwords Auction. To participate in any auction you need to bid. Similarly to participate in Adw ords Auction you
need to bid on keyw ords. Your bid is know n as the CPC (Cost Per Click) or CPM (Cost Per Thousand Impressions).
In case of CPC bidding you pay for each click on your ad. In case of CPM bidding you pay every thousand times your
ad is displayed.
CPC bidding is suitable if you are mostly interested in getting traffic to your w ebsite. CPM bidding is suitable if your main
focus is on branding, getting site visibility. In addition to CPC and CPM bidding there is one more type of bidding know n
as the CPA (Cost Per Acquisition) bidding. In case of CPA bidding you still pay for each click on your ad but you
don’t need to manage your bids manually to get conversions. The bids are automatically managed by Google Adwords
Conversion Optimizer. This type of bidding is suitable if you are mainly interested in getting conversions.
Note: In order to use CPA bidding, you must have conversion tracking enabled and your campaign must have received
at least 15 conversions in the last 30 days.
Max. CPC, Actual CPC & Avg. CPC
The maximum amount you are w illing to pay for each click is know n Max CPC. The actual amount you pay for each
click is know n as Actual CPC. The actual CPC is usually less than the Max. CPC because you need to pay only that
much to Google w hich is good enough to rank your Adw ords ad higher than the advertiser immediately below you.
Actual CPC = Ad Rank of the competitor below / Quality Score of the advertiser

To get a sense of your actual CPC look at the Avg. CPC column in your Adw ords reports. Avg. CPC is the average
amount you pay for each click on your ad.
Google Ad Rank Algorithm
Google ranks Adw ords ads on the basis of Ad Rank. It is calculated as:
Ad Rank = M ax. CPC Bid * Quality Score
Quality Score is a factor used by Google Adwords system to determine how relevant your keyw ord (on w hich you
are bidding), ad copy and landing page is to a user’s search query. It is measured as a number from 1 to 10. Higher
your quality score, higher w ill be your ad rank and less you w ill have to pay for each click. Similarly higher your Quality
score, low er w ill be your keyw ord’s first page bid estimate. That means it w ill be easier for your ad to rank on the first
page of the search results if the keyw ord has high quality score.
Here advertiser-1’s ad w on’t rank as his keyw ord/ad’s quality score is very poor (1). Advertiser-3 has got highest ad
rank (12), so his ad w ill get the 1 position on search results page for the targeted keyw ord. Advertiser-2 has got second
highest ad rank (9), so his ad w ill get the 2nd
position on search results page for the targeted keyw ord and so on.
In order to rank higher than advertiser-3, you need to achieve an ad rank higher than 12. You can get a higher ad rank
by increasing your Max. CPC bid, by improving your quality score or both. In case your Quality Score is already 10, then
the only thing that you can do to improve your ad rank is increase your Max. CPC bid. Off course I have made this all
very simple for you. The ad rank algorithm is much more complicated.
There are three types of Quality Scores you must be aware of:
1. Quality Score of a keyword – it is used w hen the ads appear on Google Search Netw ork.
2. Quality Score of Adwords ad – it used w hen the ads appear on Google Display Netw ork
3. Quality Score of mobile ad – it is used w hen the ads appear on Mobile devices.
Note: Quality score of a keyw ord is calculated each time it triggers an ad.
The historical performance is the biggest component of Quality score. It can be historical CTR of your keyw ords,
ads, display URLs and your Adw ords account. It can also be your account past performance in a particular geo
location(s) or device(s) (desktop, mobile, tablets etc).

The second biggest component of quality score is ‘Relevancy’. Relevancy means how relevant your keyw ords (on
w hich you are bidding) are to the users’ search query and your ad copy. It also means how relevant your ad copy is to
its corresponding landing page.
The third biggest component of quality score is ‘Landing Page Quality’. The landing page quality is determined by:
1. How relevant your landing page is to its corresponding ad copy and the keyw ords you are bidding on
2. Landing page load time
3. And other factors like originality of the contents, navigability etc.
Secret to getting highest possible return on your Adwords Investment
If you are a beginner in Adw ords and your aim is to get highest possible returns on your Adw ords investment then you
should consider running your Adw ords campaigns on CPA bidding as soon as there are eligible for it. If you are an
advanced Adw ords/Analytics user, you should read the ‘Super Geeks Section’ below :
If you are an advanced Adw ords/Analytics user, you should avoid bidding on CPA. This is because Google
Adwords use the last click attribution model. So in case of Adw ords, the last click w hich completed the sales gets all
the credit for conversion.
Average PPC marketers bid only on last click keywords. These are the keyw ords w hich completed the sales. They
don’t bid on first click and middle click keyw ords. First click keywords are the keyw ords w hich initiated the sales
and middle click keywords are the keyw ords w hich assisted the sales:
Different keyw ords (first click keyw ords, middle click keyw ords and last click keyw ords) w orktogether to create a sale.
So in order to get optimum results from your PPC campaigns, you need to bid on all the keyw ords {first click, middle
click and last click keyw ords}. If you understand Attribution modeling you w ill get my point. If you w ish to learn more
about attribution modeling then you should read the follow ing posts:
Attribution Modeling in Google Analytics – Ultimate Guide
Google Adw ords Attribution – Introducing Effective Click Optimization
Because of Google Adw ords Last click attribution model, the CPA that you see in your Google Adwords report is
not your actual cost per acquisition. It is the cost per last click conversion.
So if you ignore first and middle click keyw ords and optimize PPC campaigns on the basis of cost per last click
conversions than you w on’t get optimal results and sometimes even lose money. This is because if a keyword is not
completing a sale, it may be initiating a sale or assisting a sale (Always Remember That) and if you stop bidding
on it because its cost per last click conversion (the so called CPA reported by Google Adw ords) is too high or it is not
completing any conversion then you may even lose money.

The very first step tow ard getting the highest possible return on your investment is determining your Maximum
Profitable CPA (Cost Per Acquisition). It is the maximum amount you can pay for each conversion and still make
profit on sale.
Let us suppose that you manufacture and sell camcorders. You sell camcorders for $300 per item. Let us suppose that
the total cost of manufacturing, packaging and shipping a camcorder (including sales tax and other taxes) is $200. So
the amount of money you make (i.e. profit) on each camcorder is: $300-$200 = $100
Let us assume that this profit doesn’t include the cost of marketing the products via Adw ords campaigns. So,
Profit per Conversion (before Adw ords Cost) = $100
In order to remain profitable your cost per acquisition (or cost per conversion) via Google Adw ords campaign should be
below $100 otherw ise you w on’t make any money (profit). The CPA that you w ill choose to target depends upon your
profit margin.
Profit M argin =(Net Profit/Revenue) * 100
If you operate on high profit margin then your cost per acquisition needs to be low . But bear in mind that maintaining
high profit margins can result in decline in overall sales volume. This is because the aim here is to get the most
profitable sales and not highest possible volume of sales.
If you operate on low profit margin then you can afford high cost per acquisition. This is because the aim here is to
get highest possible volume of sales and not the most profitable sales. FMCG companies like ‘Tesco’ operate on low
profit margin. Since they make less profit per item, they need to sell large volume of items in order to remain profitable.
Steep decline in sales volume w ill quickly erase their profit and result in net loss.
Side note: I am not a pricing strategy consultant but according to my experience, businesses w hich don’t operate on
high profit margins generally generate more profit than those w ho choose to operate on high profit margin. So w henever
there is a tradeoff betw een profit and profit margin, I w ould go for profit any time of the day.
Once you know your profit margin, you can decide your ‘Target CPA’ i.e. the maximum amount you are w illing to pay
for each conversion and still maintain your profit margin. Let us suppose that your target CPA is $20. Then $20 is the
maximum amount you are w illing to pay for each conversion and still maintain your profit margin.
If you are a beginner in Adw ords you w ould be using conversion optimizer. While enabling this tool you can either start
w ith the recommended bid or specify your target CPA. If you are an advanced user you w ould not be running
conversion optimizer and you w ould adjust the bids and do all the calculations manually (not exactly manually but via
spreadsheet). This is because you also need to optimize for first click and middle click keyw ords as explained above
and keep multi channels attributions into account.
In any case, once you have decided your target CPA, you run the ads for as long as is your sales cycle (default 30
days) and then note dow n the Actual CPA. It is possible that your actual CPA exceeds your target CPA. This happens
because Actual CPA depends upon the factors w hich are outside Google’s control like: Conversion Rate and Max. CPC
bid. The conversion rate depends upon your ad copy, landing page and your brand credibility. Max. CPC bid depends
on the advertising competition. Both of the factors are not exactly in Google’s control.
Actual CPA = M ax. CPC / Conversion Rate

If your actual CPA is higher than your Target CPA, then you need to tw eakyour Adw ords campaigns in such a w ay
that your Actual CPA is as close as possible to your target CPA (as show n in Fig.4 above). The best w ay to reduce your
Actual CPA is to increase the conversion rate. Higher the conversion rate, low er w ill be the actual CPA. You als o need
to keep an eye on net profit and profit per conversion (including Adwords cost)
Sometimes you may need to increase your target CPA (compromise on profit margins) if you profit per conversion start
declining w hile you are attempting to bring the Actual CPA as close as possible to your target CPA. Sometimes your
Actual CPA gets even low er than your target CPA w hile you are still making incremental profit (as show n in Fig.4
above). In such case you set up new Target CPA w hich is low er than the actual CPA and then again tw eak the
campaigns to determine the most profitable CPA. So you may need to experiment with different Target CPAs
before you can find your maximum profitable CPA.
Explanation of various metrics used in the table above:
1. All the metrics are for a particular ad group in an Adw ords campaign.
2. Total clicks, Number of conversions, conversion rate, Max. CPC and Avg. CPC metrics are determined through
Google Adw ords reports.
3. Profit Per conversions (before Adw ords cost), Target CPA, Actual CPA, Net profit and Profit Per conversion
(including Adw ords Cost) metrics have been calculated manually.
4. Max. CPC is the maximum amount you are w illing to pay for each click.
5. Avg. CPC is the average amount you pay for each click. Generally avg. CPC is less than the Max. CPC
6. The Actual CPA = Max. CPC/ Conversion Rate
7. Net Profit = [{Number of conversions * Profit Per conversions(before Adw ords cost)} – {Total Clicks * Avg. CPC}]
8. Profit per Conversion (including Adw ords Cost) = Net Profit / Number of Conversions.
Phase-2: Configuration
In this phase w e configure the Google Analytics and Google Adw ords accounts to get all the right date for deep analysis
later on. We need data and correct data before w e start interpreting analytics reports. Any conclusions based on
erroneous data can never produce optimum results and can even result in monetary loss.
Therefore it is critical that w e configure the Google Analytics and Google Adw ords accounts correctly. The configuration
process includes:
1. Getting administrative rights
2. Enabling conversion tracking in Google Adw ords account
3. Connecting Google Adw ords to Google Analytics account.
4. Enabling Auto Tagging in Google Adw ords account
5. Enabling E-Commerce Tracking in Google Analytics account
6. Enabling ‘Adw ords Cost Source’ settings in Google Analytics account
7. Enabling ‘Data Sharing’ settings in Google Analytics.
8. Importing Google Analytics metrics to Adw ords reports.
9. Importing Google Analytics goals and transactions to Adw ords conversion tracking.
10. Creating a separate profile for tracking Adw ords campaigns in Google Analytics

Getting administrative rights
You need to get administrative rights on both Google Analytics and Google Adw ords account in order to w orkfaster.
Once you become account administrator it w illbe easy for you to make changes to the account w henever you w ant.
Otherw ise you have to depend on a “third party” every time you choose to make some changes.
Enabling conversion tracking in Google Adwords account
As a marketer you need to know w hat happens after a user clicks on your ad. Did he purchase your product? If yes,
then w hich keyw ord, ad, ad group or campaign triggered the conversion? By know ing this, you w ill know w hich ads,
placements and keyw ords lead to conversions and are w orth bidding on.
The ‘conversion tracking’ feature in Google Adw ords can help you in getting this insight. In order to calculate
theROI of your Adwords campaigns you have to enable conversion tracking in your Adw ords account. Check out the
follow ing video to learn more about the benefits of conversion tracking and how to enable it in your Adw ords account:
Connecting Google Adwords to Google Analytics account
Linking Adw ords account to your analytics account help you greatly in understanding w hat people do after they click on
your ad and land on your w ebsite. You can understand the behavior of Adwords visitors in terms of site usage
(pageview s, bounce rate, avg. visit duration etc), goal conversions and e-commerce transactions.
This type of insight helps immensely in optimizing ad copies, keyw ords and landing pages of an Adw ords campaign.
Check out the follow ing video to learn connecting Google Adw ords to Google Analytics account:
Enabling ‘Auto Tagging’ in Google Adwords account
Tags are campaign variables w hich are added to the end of destination URL of an ad. Through campaign variables
you can send information (like source, medium, campaign name, campaign term etc) about your marketing campaign
(like PPC, email marketing, affiliate marketing, display etc) to the Google Analytics server.
Tagging a URL means adding campaign variable(s) to it. You can tag Google Adw ords campaigns either manually
or through ‘auto tagging’. How ever you can tag non-Google Adwords campaigns (like Bing PPC campaigns, Email
marketing campaigns, Affiliate campaigns etc) only manually.
When you choose to tag a URL manually, you manually add follow ing campaign variables to the end of the destination
URL of your ads:
1. utm_source – used to specify traffic source. For example: google, yahoo, facebook, bing etc.
2. utm_medium – used to specify traffic medium. For example: cpc, ppc, banner, email, affiliate etc.
3. utm_campaign- used to specify the name of the campaign. Campaign name can be a product name, promo code
etc.
4. utm_term – used to specify the paid search keyw ord. For example: event-planning-courses, event-management
etc.
5. utm_content- used to specify the ad version. For example: banner-link, text-link etc.
Note: the use of the campaign variables ‘utm_term’ and ‘utm_content’ is optional.

When you choose to ‘auto tag’ a URL then Google automatically ads ‘GCLID’ to the end of the destination URL of an
ad. GCLID stands for ‘Google Click ID’. It is a unique ID used by Google Analytics to track and display Adw ords clicks
in your reports. You can see the GCLID in the landing page URLs of your Adw ords ads (provided the auto tagging is
enabled).
Example of non-tagged URL: http://www.abc.com
Example of auto-tagged URL: http://www.abc.com?gclid=CLjTpNrg8NIC
Example of manually tagged URL: http://www.abc.com/?utm_source=bing&utm_medium=ppc&utm_term=car-
insurance&utm_content=text-ad&utm_campaign=car-insurance-promo-feb
Note: You should alw ays Google URL builder to manually tag URLs.
Best Practices for Tagging URLs
1. Avoid manually tagging your Adw ords URLs. Use auto-tagging instead.
2. Alw ays use Google ULR builder and spreadsheet to tag multiple URLs.
3. Use consistent names and spellings for all of your campaign variables’ values.
4. Use only the campaign variables you need.
Note: When you use ‘auto tagging’, Google automatically tags the campaign source and medium of your AdWords ads
as google / cpc.
Advantage of Auto tagging over manual tagging in case of Google Adwords
Campaigns
Google strongly recommends using ‘auto tagging’ for Google Adw ords campaigns and there is a strong reason for that.
When you manually tag your adw ords URLs, the Adw ords reports in Google Analytics show results only by ‘campaign’
and ‘Keyw ords’. But w hen you enable ‘auto tagging’, Adw ords reports (in Google Analytics) show detailed information
about your Adw ords campaigns.
You can then see results by:
1. Campaign
2. Keyw ords
3. Ad Groups
4. Ad Content
5. Match Type
6. Display URL
7. Destination URL
8. Keyw ords positions
9. Day parts etc
The other benefit of auto tagging is that it saves time. You don’t need to manually tag each and every destination URL
of your Adw ords ads. This is a life saver esp. if your Adw ords account is very big.
To enable auto-tagging follow the steps below:
1. Sign in to your Google Adw ords account.
2. Click My account tab > Preferences.
3. In the ‘Tracking’ section, click on the ‘Edit’ link
4. Check the ‘Destination URL Auto-tagging’ checkbox.

5. Click on ‘Save changes’ button.
Note: You should not use auto tagging and manual tagging at the same time. This can result in data discrepanciesin
your reports.
Factors which can prevent auto-tagging from working properly and how to test for
issues
There are several factors like third party redirects, encoded URLs and server settings w hich can prevent auto-tagging
from w orking properly. These factors can cause GCLID parameter to be dropped from the landing page or generate
error pages. Dropped GCLID parameter can cause Google Analytics to treat Google Adw ords traffic as organic, direct
or referral traffic instead of paid search traffic.
So you need to make sure that third part redirects or server settings are not preventing your auto tagging from w orking
properly. You can do this by follow ing the steps below :
Step-1: Add ‘?gclid=test’ to the end of the destination URL of your Adw ords Ad. For e.g.
http://w w w.abc.com/?gclid=test. If glcid=test is not the first parameter, then add ‘&gclid=test’ to the end of the
destination URL of your Adw ords Ad. For e.g. http://w w w.abc.com/?source=google&gclid=test
Step-2: Copy-paste the modified URL into the address bar of your brow ser w indow and press enter.
Step-3: If the URL of the resulting page doesn’t display ‘gclid=test’ then auto tagging is not w orking properly.
Enabling E-Commerce Tracking in Google Analytics account
In order to get ecommerce data (revenue, transactions, average value, e-commerce conversion rate, RPC, ROI and
Margin) for your Adw ords campaigns in Google analytics reports you need to enable E-Commerce Tracking in your
Google Analytics account and add e-commerce tracking code to your order confirmation page(s).
You can learn more about enabling and setting up e-commerce tracking from here.
Related Post: How E-Commerce Tracking w orks in Google Analytics – Ultimate Guide
Enabling ‘Adwords Cost Source’ settings in Google Analytics account
In order to import cost data from Google Adw ords into Google Analytics account, you must allow your Google Analytics
account to receive the cost data in the first place.
You can do this by follow ing the steps below :
1. Sign in to your Google Analytics account.
2. Select the account and then the w eb property that contains the profile you w ant to edit.
3. Click the ‘Admin’ tab.
4. Click on the profile w hose ‘Adw ords Cost Source’ settings you w ant to enable.
5. Click on the ‘Profile Settings’ tab.

6. Under ‘AdWords Cost Source Settings’, check the ‘apply cost sources’ checkbox.
7. Click on the ‘Apply’ button.
Enabling ‘Data Sharing’ settings in Google Analytics
In Google Analytics, your Data Sharing Setting must be set to: “w ith other Google products only” so that Google
Analytics can share its data w ith Google Adw ords. You can learn more about ‘Data Sharing settings’ from here.
Importing Google Analytics metrics to Adwords reports
Once you have linked Google Adw ords and Google Analytics account, you can then add Google Analytics columns to
your Adw ords reports:
You can do this by follow ing the steps below :
2. Click on the ‘Campaigns’ tab
3. Click on ‘Campaigns’ or ‘Ad Groups’ sub-tab
4. Click on ‘Columns’ drop dow n button > ‘Customize Columns’
5. Click on ‘Google Analytics’ (as show n in the image above)
6. Click on ‘Add’ or ‘Add all columns’ (as show n in the image above)
7. Click on the ‘Apply’ button

You can now see the Google Analytics metrics in your Adw ords reports.
Importing Google Analytics goals and transactions to Adwords conversion
tracking
Not every action (conversions) that w e w ant visitors to perform on our w ebsite can be tracked by Adw ords default
conversion tracking. For example, if you don’t have a Contact Us form w ith a “Thank You” page on your w ebsite, but
have an email link instead w hich opens up client’s outlook email, then it can’t be tracked by default Adw ords Conversion
tracking. To w orkaround this problem you need to track click on the ‘email link’ as Event Goal in Google Analytics and
then import the goal from Google Analytics into Adw ords conversion tracking.
Once you have linked the Adw ords and analytics accounts, enabled data sharing and auto tagging, you can then import
Google Analytics goals to Adw ords conversion tracking by follow ing the steps below :
2. Click on ‘Tools and Analysis’ tab > Conversions
3. Click on ‘Campaigns’ or ‘Ad Groups’ sub-tab
4. Click on the “Import from Google Analytics’ button
5. Select the conversions you w ant to import and then click on the ‘Import’ button
Creating a separate profile for tracking Adwords campaigns in Google Analytics
Filtered profile is a great w ay to apply advanced customization to a report w ithout the risk of messing up the original
data. Filtered profiles are most useful if your analytics account has got data sampling issues . The data that is

filtered at a profile level is unsampled. For example if you apply the advanced segment ‘paid search traffic’to the ‘All
Traffic’ report (so say you can determine the ‘e-commerce conversion rate’ of your paid search traffic) then your report
data w ill be sampled. But if you create a filtered profile w hich show s only ‘paid search data’ then your report data w ill be
unsampled.
Note: Data sampling issues are big problem only for high traffic w ebsites (w hich get more than 10 million
pageview s/month) and can cause highly inaccurate reporting of metrics. Your metrics from ‘conversion rate’, ‘revenue’
to ‘visits’ could be anyw here from 20% to 80% off the mark if you have got data sampling issues.
You should use enterprise level analytics tool like ‘Google Analytics Premium’to minimize data sampling. But do
remember that even GA premium cannot fully eliminate data sampling. Therefore you have to use filtered profiles
regardless of the analytics tool (GA Standard or GA premium) you use if you have got data sampling issues. To learn
more, check out this post: Google Analytics Data Sampling – Complete Guide
Once you have a separate profile just for tracking Adw ords campaigns you can do all type of report customization
w ithout the risking of messing up the original data in the main profile. For example by def ault Google Analytics group all
Google Search Partners for Adw ords (like AOL, ASK, myw ebsearch etc) as google/cpc. So you w ill never know w hich
Google search partner is actually sending traffic and conversions. You can fix this problem by creating and applying
follow ing tw o filters one after the other to your Adw ords Profile (courtesy of: Brian Clifton).

Once you have applied these filters, w ait for few hours and then go to Traffic Sources > Sources > All Traffic Report.
You can now see all the Google search partners w hich are sending traffic to your w ebsite:

Phase-3: Analysis
Once you have configured your Google Analytics and Google Adw ords account and have got at least 4 w eeks of data in
your reports, you are in a position to do some serious analysis of the Adw ords data. You can now analyze Google
Adw ords campaigns’ performance both through Google Analytics and Google Adw ords reports.
Let us start w ith Google Adw ords reports in Google Analytics:
Adwords Campaigns Report
You can access the Adw ords Campaigns report by going to Traffic Sources > Advertising > Adw ords > Campaigns
Through this report you can measure the performance of each Adw ords campaign (and their ad groups and targeted
keyw ords) on different types of devices: all devices, non-mobile devices, high-end mobile devices (like smart phones)
and tablets in terms of:
1. Site usage (visits, pages/visit, avg. visit duration etc)
2. Goal Conversions (Goal Conversion Rate, Per visit Goal value, Goal 1 conversion rate etc)
3. E-Commerce (Revenue, Transactions, Average Value, E-Commerce Conversion Rate etc)
4. Clicks (Impressions, Clicks, Cost, CTR, CPC, RPC, ROI etc).
Note: You can click on a campaign name (in the Adw ords Campaign report) to check the performance of all the ad
groups in that campaign. You can click on an ad group name to check the performance of all the keyw ords in that ad
group.
Through the ‘clicks’ tab you can get information about clicks and the keyw ords spending. Most of you are already
familiar w ith metrics related to site usage, goal conversions and ecommerce. These metrics are pretty standard and are
available in almost every Google Analytics report. But the metrics related to Adw ords Cost data and ROI is unique. So
let us explore these metrics:

Here,
Visits is the number of visits from Google Adw ords ads
Impressions is the number of times your Adw ords ads w ere displayed
Clicks is the total number of clicks on your Adw ords ads
Data discrepancy between Adwords and Google Analytics reports
Here one thing that you need to keep in mind that the number of clicks on your ads generally don’t match with the
number of visits in your Adwords reports. Follow ing are the reasons for such data discrepancy betw een Adw ords
and Google Analytics reports:
1. Google Adw ords track ‘clicks’ w hereas Google Analytics track ‘visits’ (or w eb sessions).
2. A single click on Adw ords ad can result in multiple visits.
3. In a single visit a user can click on the same Adw ords ad multiple times.
4. Google Adw ords can report clicks even if the javascript, cookies or images are turned off by a visitor. Google
Analytics can’t report visits in such case.
5. If the landing page of the Adw ords ad doesn’t contain Google Analytics tracking code, then Google Analytics w ill not
be able to track visits but Google Adw ords can still track clicks.
6. Redirects in landing pages may prevent the Google Analytics Tracking code from being executed. In this case
Google Analytics w ill not be able to track ‘visits’ but Google Adw ords can still track ‘clicks’.
7. Google Adw ords can filter invalid clicks but Google Analytics can’t filter invalid visits because of such clicks. So
Google analytics w ill track and report visits even for invalid clicks.
8. Google Analytics treat visits from untagged or improperly tagged Ad URLs as organic visits instead of paid search
visits.

9. Profile filters may remove some of the ‘visits’ data from your Google analytics reports.
10. If visitors bookmark the landing page of your Adw ords ad along w ith the GCLID parameter, then Google Analytics
report visits from such bookmarks as paid search visits instead of direct visits.
Cost is the total costs of clicks on your Adw ords ads.
CTR (or Click through Rate) is the number of times your ads w ere clicked/number of times your ads w ere displayed. So
CTR= (Clicks/Impressions) * 100
Through CTR you can determine how much visible and convincing your Adw ords ad is for targeted keyw ord and ad
position. You can improve the CTR of your Adw ords ad in tw o w ays:
1. Bid for higher ad position (increase your Max. CPC)
2. Write a more convincing ad copy
CPC is the average cost you paid for each click on your ad. CPC = total cost/total clicks
RPC is the average revenue you generated for each click on your ad. RPC = (Total revenue generated through
Adw ords ads+ total goal value generated through Adw ords ads)/total clicks on the ads.
Note: Your RPC numbers could be all zero in your Adw ords reports in Google Analytics if you have not set up Goals
and Goal values and/or you have not enabled ecommerce reporting.
ROI is the Return on Investment of your Adw ords campaigns. It is calculated as:
ROI= {(E-Commerce Revenue+ Total Goal Value) – cost}/cost
Margin is the ‘Gross Margin percentage’ of your Adw ords campaigns. It is used to estimate the gross profit of the
Adw ords campaigns. It is calculated as:
Margin = {(E-Commerce Revenue+ Total Goal Value) – cost}/E-Commerce Revenue
If Gross margin percentage for a campaign is 62% and the revenue generated by the campaign is $50000 then the
estimated gross profit for the campaign w ould be: $50000 * 62% = $31000
ROI reported by Google Analytics for Adw ords campaigns is incorrect as it doesn’t take into account your profit margin.
So the correct ROI w ould be:
ROI= {(E-Commerce Revenue+ Total Goal Value) * Profit Margin – cost}/cost
ROI of 0% => means no profit, no loss. You spent ‘x’ and earned ‘x’ in revenue.
ROI of 100% => means you spent ‘x’ and earned ‘2x’ in revenue.
ROI of 1000% => means you spent ‘x’ and earned ‘11x’ in revenue.
ROI of -100% => means you spent ‘x’ and earned 0 in revenue.
Important Points about Negative ROI
1. It is common for brand new campaigns/keyw ords to show negative ROI for first few w eeks. Therefore you should
keep this in mind before you pause or delete your negative ROI campaigns/keyw ords.
2. You can assess keyw ords’ profitability through RPC and ROI metrics.
3. You should never assess the performance of keyw ords/campaigns on the basis of few clicks or few days’w orth of
data as some visitors can take several days or w eeks before they turn into customers.
4. Your ROI numbers can be all zeros in your Adw ords reports in Google Analytics if you have not set up Goals and
Goal values and/or you have not enabled ecommerce reporting.
5. Make sure that your Adw ords and Google Analytics accounts are set to the same currency. Otherw ise the ROI data
w on’t be accurate.

Adwords Keywords Report
You can access this report by clicking on Traffic Sources > Advertising > Adw ords > Keyw ords in Google Analytics.
Through this report you can measure the performance of the Adw ords keyw ords (i.e. the keyw ords you are bidding on in
Adw ords) and ‘Ad Content’ on different types of devices: all devices, non-mobile devices, high-end mobile devices (like
smart phones) and tablets in terms of:
4. Clicks (Impressions, Clicks, Cost, CTR, CPC, RPC, ROI etc).
If you are running your Adw ords on Google Display netw ork (a netw ork made up of millions of w ebsites w hich have
partnered w ith Google to display relevant Adsense ads on their w eb properties) then the keyw ords report w ill show
‘content targeting’ in the keyw ords column:
Google Analytics group all the keyw ords w hich resulted in clicks on your ads (placed on the w ebsites w hich are part of
Google Display Netw ork) as ‘content targeting’. The best w ay to measure the performance of the keyw ords grouped
together as ‘content targeting’ is by selecting ‘placement domain’ as a secondary dimension:
Placement domain is the w ebsite w here your ads w ere displayed and clicked. So w hen you select secondary dimension
as ‘placement domain’ you can determine the performance of your ads on a particular domain.
Adwords Matched Search Queries Report

You can access this report by clicking on Traffic Sources > Advertising > Adw ords > Matched Search Queries in Google
Analytics.
Through this report you can measure the performance of Matched search queries (keyw ords w hich actually triggered
the ad) and match types (broad match, phrase match and exact match) in terms of:
This report becomes super useful w hen you add ‘keyw ord’ as secondary dimension. In this w ay you can determine
w hich keyw ords you are bidding on and w hich are actually triggering the ads:
Adwords Day Parts Report
You can access this report by clicking on Traffic Sources > Advertising > Adw ords > Day Parts in Google Analytics.
Through this report you can determine most profitable Hours and Days of the w eekfor your ads and then re-schedule
your ads and adjust your bids accordingly. For example, if an ad generates significant amount of revenue during certain
hours of the day say betw een 12 pm to 4pm, then you can raise your bids during those times.
Adwords Destination URLs Report
You can access this report by clicking on Traffic Sources > Advertising > Adw ords > Destination URLs in Google
Analytics.
Through this report you can measure the performance of your Adw ords ads’ landing pages in terms of: site usage, Goal
Conversions, E-Commerce and Clicks. This report becomes super useful w hen you add ‘Landing page’ as a
secondary dimension to verify w hether the destination URL is taking the visitors to the right landing page.
Through this report you can also measure the performance of Ad Distribution Netw ork in in terms of: site usage, Goal
Conversions, E-Commerce and Clicks. You can determine w hich method of distribution (Google Search Netw ork or
Google Display Netw ork) is more effective.

Adwords Placement Report
You can access this report by clicking on Traffic Sources > Advertising > Adw ords > Placement in Google Analytics.
Through this report you can determine how your ads are performing on ‘Managed placements’ and ‘Automatic
Placements’ of Google Display Netw ork. Managed placements are those w ebsites on Google Display Netw ork w hich
you have manually selected to display your Adw ords ads. Automatic placements are those w ebsites on Google Display
Netw ork w hich have been selected by Google to display your Adw ords ads.
Adwords Keyword Positions Reports
You can access this report by clicking on Traffic Sources > Advertising > Adw ords > Keyw ords Positions in Google
Analytics.
Through this report you can determine w here your Adw ords ads ranked on Google SERP (Search Engine Result Page)
w hen the visitors clicked on it and w hat is the impact of the ranking position in terms of site usage, goals and
ecommerce. Through this report you can determine the ranking positions w hich deliver best performance.
Conversion Metrics used in Google Adwords
There are tw o types of conversions available in Google Adw ords reporting interface:
1) Click Conversion – It is the conversion triggered through a click on an Ad. A click conversion can be Conv. (1 per
click) or Conv. (many per click).
Conv. (1 per click) => one click on an ad resulted in only one conversion.
Conv. (many per click) => one click on an ad resulted in multiple conversions. How ever these conversions must have
occurred w ithin the next 30 days follow ing the click on the ad.

2) View through Conversion – It is the conversion triggered through an impression (view ing) of a display netw ork
ad that has not been clicked in the last 30 days.
If a user clicks on your ad and purchase an item and signup for a new sletter then:
Conv. (1 per click) = 1
Conv. (many per click) = 2
==================
If a user clicks on your ad and purchase an item then later again come back to your site by clicking on the ad again and
sign up for a new sletter then:
=================
If a user clicks on your ad and purchase items then later again come back to your site directly and sign up for a
new sletter then:
Competitive Metrics used in Google Adwords
Competitive metrics are some of the most useful metrics available in Google Adw ords. Understanding of these metrics
is critical in order to optimize Google Adw ords campaigns.

Search Impr. Share – It is the search impression share for your ads on the Google Search Netw ork. It is calculated as:
Total Impressions your ads received / estimated number of impressions your ads were eligible to receive on
the Google Search Network
Through this metric you can identify opportunities to get more impressions and clicks if your ads have got low search
impression share. You need to make sure that you keep the search impression share as high as possible.
Search Exact Match IS – It is the search impression share for your ads on the Google Search Netw ork w hen the
search terms matched the keyw ords (on w hich you are bidding) exactly or very closely. It is calculated as:
the Google Search Network for search terms that exactly (or very closely) matched your keywords
Through this metric you can identify opportunities to get more impressions and clicks if your ads have got low exact
match search impression share. You need to make sure that you keep the exact match impression share as high as
possible.
Search Lost IM Share – It is the search lost impression share. It is the estimated percentage of impressions your ads
didn’t receive on Google Search Netw ork because of poor Ad rank. You need to make sure that you keep this
impression share as low as possible.
Display Impr. Share – It is the impression share of your ads on Google Display Netw ork. It is calculated as:
the Google Display Network
Through this metric you can identify opportunities to get more impressions and clicks if your ads have got low display
impression share. You need to make sure that you keep the display impression share as high as possible.
Display Lost IS (Rank) – It is the display lost impression share. It is the estimated percentage of impressions your ads
didn’t receive on Google Display Netw ork because of poor Ad rank. You need to make sure that you keep this
impression share as low as possible.
Relative CTR – Through this metric you can get an idea of how your ads are performing on Google Display Netw ork in
comparison to the other ads on the same w ebsites. It is calculated as:
CTR of your ad / average CTR of others ads running on the same websites
A relative CTR of 1x means that the CTR of your Display ad is equal to the average CTR of others ads running on the
same w ebsite(s).
Read more: http://w w w.seotakeaw ays.com/complete-guide-to-google-adw ords-analytics/#ixzz31hTqrMTR

20 KPIs you should monitor in Google Analytics
Posted by dimitriszotoson Tuesday , O ctober 18 at 12:51
to Marketing
15 Comments
A Key Performance Indicator or KPI refers to a set of measurements reflecting the performance orsuccess of an
organization in terms of progress of its goals. In this article we present the most important website KPIs from online
marketing perspective and we discuss how to monitor them in Google Analytics.
Most online marketing professionals, SEO engineers and webmasters have in their daily routine the monitoring, reporting and
data analyzing tasks followed by decision making regarding the optimization of the performance of their websites. Within web
metrics, charts and pivots lots of information can be found unveiling new ways to optimize their strategy.
Nevertheless allthese numbers, metrics and statistics can be confusing. Which ratios should be taken into account during the
above analysis? Which are the most important stats? Many of these questions will be answered shortly since in the following
lines we will discuss the importance of website goals and we will list the most important KPIs that are used to measure the
defined targets.
Website Goals & KPIs
Setting specific and measurable goals is a vitalstage before defining Key Performance Indicators (KPIs). Depending on its
type, a website can have much different goals. Common goals of E-commerce sites are the increase of the number of
purchases, the number of items in basket, the average transaction value etc while for content websites common goals are the
increase of media consumption, subscribers, video viewers, online game players etc.

KPIs are:
 Indicators of Success
 Can be presented through rates
 Require comparison
 Depend on the industry and type of website
General KPIs about Website
1. Conversion Rate:This ratio displays how many visitors are converted into desired actions.
2. Goals Conversion Rate:Shows how many visitors reached at least one of the goals that you have setup by using the
Google Analytics service.
3. Type of Users (user defined):The User defined is a variable that helps you define specific types of users that have
completed a goal or a specific action in the website (pageview, formcompletion etc).
4. Bounce Rate & Time on Site:These are 2 extremely usefulKPIs which indicate whether your visitors find what they
are looking for in your website or if they leave your site immediately. This metrics can be found in the Visitors section of
Google Analytics, nevertheless it is also very usefulto focus on them when you evaluate the various channels/sources of
traffic.
5. Type of Sources:This is a complex report which is generated by segmenting the traffic by specific sources and
mediums such as Search Engines, Referring sites, Direct, E-mail or custom campaigns. Focus not only on the total
number of visitors but also on the quality of the traffic (bounce rate, time on site, transactions etc).
Visibility KPIs
1. Traffic of Non branded keywords:This is the common Keywords Traffic report filtered to excludebrand name
combinations.
2. Traffic generated by specific terms: The long or short tail keyword strategy can be evaluated using this
segmentation. Usually the keywords traffic report that can be found in Google Analytics returns too many combinations.
By using filters you can break down the keyword list and focus on the ones that contain specific terms or you can check
for 2 words phrases, 3 words phrases or for terms that satisfy aspecific rule. To generate such a report, use regular
expressions in the advanced filter.
3. Bounce rate per keyword:This can be found on the table of keywords traffic report. Focus on the column called
“bounce rate”which shows the average bounce rate per keyword.
4. Keyword Ranking:Find your keyword rankings by using the keyword battle tool and then compare the results with the
Organic traffic reports of Google Analytics to find out if your keyword selection istargeted and if your SEO strategy is
successful. Focus on how much traffic you get from each top ranking keyword and see if you need to adapt/change
your SEO strategy by focusing on more popular or more targeted terms.

KPIs and Metrics of Online and Digital Marketing

KPIs and Metrics of Online and Digital Marketing

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