Guest Blogger: Jordan Tag, Breezy PPC
Confessions of a PPC Manager: You’re Looking at The Wrong Metrics to Measure Google Ads Success
Quality Score, Cost Per Click & similar metrics are distracting you (or the agency you’re paying) from what matters most – revenue. Focus on profitability and success will follow.
By Jordan Tag, Update 02.2021
“Jordan, I just can’t understand why you’d want to cancel an account that’s running this well” said Matt Targett, a strategic partner manager at Google. The account Matt was referring to is a Google Ads account for a client we just started working with. The account was managed by a large advertising agency that also happened to be a Google Partner. Backed by Google’s internal AdWords team (now Google Ads), said agency was doing everything they could to keep the account.
“I’ve had my team here at Google audit the campaigns and we can’t find anything wrong with it.”
Surface level Google was right. Click Through Rate (CTR) held strong between 6-7%, Avg. Position was in the low 1’s, and leads averaged $27 each. With a $6,500 monthly budget, that’s a lot of leads. Revenue should be through the roof.
Except it wasn’t. Months with high Ad spend produced low profits, and months with little to moderate Ad spend met their monthly sales targets. There was no rhyme or reason for the success and failure of each month.
Why? Because the agency didn’t take the time to understand the client’s business. This is death for any marketing company and to this day it surprises me how often I see it happen.
Instead, said agency focused on:
- Vanity metrics like CTR, Avg. Position and CPC to measure success, while completely ignoring…
- The value of each lead type, &
- Sloppy conversion tracking and setup.
The client had problems in other areas too, but the problems listed here were created by the agency (not Google). Let’s dive right into it.
#1. Buzzwords like “Click Through Rate”, “Average Position” and “Quality Score” are not measurements of success.
If this statement pisses off the marketing company you’re paying, you might want to consider finding a new agency. In the wrong hands these metrics can be used to intimidate and scare clients into thinking Google Ads is too complex for anyone to understand. We call it “inking”, similar to a squid shooting a cloud of ink to distract from the real prize.
Revenue doesn’t care about Click Through Rate. It also doesn’t care about your average ad position, quality score, or any other metric reported in Google Ads. Speaking strictly within marketing boundaries, revenue only cares about two things – cost per acquisition & lifetime value (more on this below).
Everyone wants their Google Ads account to fire on all cylinders. The better your account runs, the more money you’re saving, right?
Not quite. Quality Score, CTR and the others are all circumstantial. Just because one business is seeing Click Through Rates around 10% doesn’t mean that your Click Through of 3% is a failure.
The closer your cost per acquisition is to your lifetime value, the more money you’re leaving on the table. So instead of focusing on ways to improve your Click Through Rate or Quality Score, focus on the quality of leads your campaign is producing. If your account is producing the wrong type of leads, you could have a CTR of 100% and it would all be for nothing.
#2. Operational hurdles can be just as damaging as a poorly executed marketing campaign.
In the client’s case, the lifetime value of each customer varied from $500 – $15,000 (or more). The leads broke down exactly as follows:
- The closing rate of the sales team was 6%.
- 25% of calls were generated off-hours, connected to a line with no voicemail.
- 25% of leads weren’t even related to hiring the clients service (wrong number).
- A significant portion of the remaining estimates didn’t get a call-back, because the team didn’t seem them as a “serious” quote opportunity.
It’s not always up to every agency to make sure a company is operationally sound, but in this case, more marketing dollars didn’t translate into more revenue, and that’s usually the first sign that something is wrong. Marketing companies will sometimes recommend spending more money – myself included – and the #1 sign of success will always be revenue. If revenue or occupancy isn’t going up after increasing spend, then it’s time to take a step back.
What does this have to do with Google Ads? It’s an often overlooked component of running a business, but operational opportunities carry just as much weight as marketing and sales. When speaking of a customer acquisition funnel, you’re only as strong as your weakest link. You can have the best marketing and sales team in the world, and if calls aren’t even getting through, your revenue falls flat.
In Closing
The internet will tell you anything you want to hear. While it’s an amazing resource for anyone looking to self-educate, it’s also a cesspool of misinformation. There are millions of articles telling you how to optimize Google Ads and increase “performance.” If I had a nickel every time I read an article talking about how to improve quality score… I promise, your revenue couldn’t care less about an abstract Google Ads metrics. I’ve also never seen an increase in CTR translate directly into more money for any business, ever.
So, the next time you read that online article discussing all the ways your Google Ads account isn’t performing as good as it could, please take a moment to recognize that everything is relative. Ignore the noise, focus on the basics and the quality of the leads, and the rest will follow.
About Jordan
Jordan is the founder of Breezy PPC, and has worked in the digital marketing space for over a decade. With extensive in-house marketing experience in web development, SEO, Paid Search, & branding, Jordan understands the unique hurdles facing every business. If he isn’t neck deep in a Google Ads account, you can typically find him spending time with his wife and two daughters.