Search engine marketing (SEM), also known as paid search, is an advertising approach that has been around almost as long as the internet itself, and it has only grown in popularity in recent years. This is because paid search gives businesses and brands both large and small the ability to reach the top of search results pages with ease. With paid search, you can delve into the paid search metrics or SEM performance metrics provided by your ad platform to optimize every aspect of your ad campaign, including budget, keywords, target links, ad copy, ad extensions, and even the geographic locations where ads will be shown, known as “local targeting.”
What’s more, paid search campaigns are relatively simple to set up, run, manage, and pause when necessary. You’re probably familiar with paid search ads, even if you don’t realize it and have never used one yourself. The most common form of SEM is probably Google Ads. You’ve no doubt seen those results at the top of just about every Google search with the word “ad” next to them. Plenty of similar services exist, including Bing Ads, Yahoo Ads, and even SEM for search engines such as DuckDuckGo.
Those who utilize paid search to promote their company, brand, product, or service have a huge advantage: Almost every aspect of the digital ad presence is trackable. This means that a wealth of information is available right at your fingertips in the form of reporting from your chosen ad platform. This reporting allows you to monitor your ad campaigns in real time, utilizing valuable paid search metrics or SEM performance metrics to see what’s working, what isn’t, and what you need to change. In short:
Paid search metrics are important for understanding the quality of your ad traffic
What does that mean, exactly? It means that SEM performance metrics can tell you how often your ad is seen and how often it’s clicked. The former is called an impression, the latter, simply enough, a click. But this valuable data doesn’t stop there. It can also tell you the click-through rate, or CTR, which is simply the measure of how often someone who sees your ad clicks on it. Think of it as a fairly simple bit of arithmetic. Take the number of clicks that your ad receives and divide it by the number of impressions the same ad received to get a percentage.
This gives you an idea of how often people who view your ads are clicking on them. The higher your ad’s CTR, the better that ad is performing. It means that people probably find your ad helpful and relevant to their searches—or, at least, that it grabs their attention and makes them curious.
This same data also helps to calculate your cost per click (CPC) for an ad, which is simply how much you are paying each time a customer clicks on one of your ads. With all this data, you can adjust your paid search campaigns in real time to highlight what’s working and tweak what isn’t.
Paid search metrics are important for assessing the quality of actions performed by a user
Of course, while clicks are important, you don’t want the people who see your ads to stop there! Most ad campaigns are designed to do more than boost awareness. They’re meant to drive users to perform some specific action—buy a product, join a mailing list, request a free sample, install a mobile app, etc. These are called conversions.
When a user who clicked on your ad does whatever you had hoped for them to do, that’s the real measure of whether your ad is successful, and it can be gauged by calculating your conversion rate, which is simply the number of conversions compared to the total number of interactions with your ad. Just as the click-through rate is the number of clicks compared to the number of impressions, the conversion rate is the number of conversions compared to the number of clicks. This helps you to determine your overall cost per conversion in order to maximize your return on investment (ROI), making sure that you’re getting as much bang for your buck as possible.
From there, you’ll have the tools you need to perform conversion rate optimization. This has less to do with fiddling with your ads themselves (they did their job, after all) and more to do with optimizing the landing page that the ad takes users to, to ensure that they follow through with whatever made them click on the ad in the first place.
Paid search metrics and SEM performance metrics are important to ensuring the quality of your ads and their performance
There’s more to your ads—and how they perform—than what the user sees. Things are happening behind the scenes that determine everything from average position (where in the search rankings your ad is likely to be displayed) to your ad’s overall Quality Score. What is a Quality Score? Simply put, it’s one way that SEM performance metrics are used to calculate the overall quality of your ads.
Quality Score is usually a scale of 1 to 10, with higher numbers indicating that your ad is more relevant and useful to someone who is searching for the specific keyword or search term to which your ad is tied. This is calculated using three components: the expected click-through rate, the overall landing page experience, and the ad relevance of your particular ad.
This last is something we haven’t discussed yet, but it’s important. After all, you could tie an ad for new construction homes at a master-planned community to a search term like “lawn maintenance,” but it wouldn’t be very useful to do so, either for you or the end-user. Ad relevance is a measure of how well your ad matches the intent of the user. If someone is searching for “lawn maintenance” and finds new homes for sale, that won’t do them much good. Ad relevance is determined by comparing relationships between keywords and search terms, ad campaigns, and the pages users land on when they click your ad.
All of these factors combined contribute to your ad’s total Quality Score and, more importantly, to the actual quality and performance of your ads—how likely they are to generate clicks, conversions, and satisfied customers.
That’s the name of the game, after all. Reporting from Google, Bing, Yahoo Ads, DuckDuckGo, or your search platform of choice is full of valuable paid search metrics and SEM performance metrics that can produce incredible insights into the performance and quality of your ad campaign.
Making sense of all that data and turning it into actionable information can be a bit overwhelming. That’s why the smart plan is to have access to all that data and a team of experts who can interpret these metrics, optimize your ad campaign, and get you the results you want. For that, you need L&P Marketing. We can not only interpret your paid search metrics to make them easy to understand and apply, but we can also turn that data into action items that will improve your ROI and make your ads perform better, and faster.