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How to Improve Your 7 Most Critical Paid Media KPIs

Florian Cabirol
October 25, 2023
How to Improve Your 7 Most Critical Paid Media KPIs

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You can reach a target audience or a specific demographic in several ways in today’s marketplace. One of the fastest options is to invest in paid media.

Search engine optimization is considered a “free” option, while buying a specific advertising space or bidding on impressions is considered “paid.”

Unlike organic methods, which take time to build up, paid media can bring immediate traffic to your website or landing page. The platforms providing this service offer robust targeting options. You can focus on specific locations or interests, ensuring your ad reaches the right audience.

Even if people don't click on your ad, simply displaying it increases visibility and helps build brand recognition.

What Is Paid Media KPI?

Key performance indicators in this category are used to measure the effectiveness of your business’s paid advertising campaigns. This data helps you understand how well these investments engage with your targeted audience and covers several categories, including sponsored posts, pay-per-click ads, and banner advertising.

Your digital marketing report puts this information into an easily consumable format to gather valuable insights. Catchr helps you get this data with Google Sheets and Looker Studio to assess each outreach effort's pros and cons quickly.

What Are the Top Paid Media KPIs to Start Tracking?

Tracking the best key performance indicators for your paid media campaign can help you unlock potential growth opportunities. You can spot weak areas of the investment, retool your creatives to deliver a stronger message, and provide an outstanding value proposition.

Although each business has unique requirements to consider, the following KPIs deliver the data you need to find a path forward. 

1. Click-Through Rate

CTR is a classic KPI to track in almost any digital marketing effort, and for good reason. It shows the percentage of people who clicked on an ad after seeing it. 

A high click-through rate suggests that your ad resonates well with the audience. When you pair it on the digital marketing report with conversion activities and other metrics, you can see the effectiveness of your investment.

Improving this metric lets you get more value from each investment while delivering confirmation that your message resonates with the targeted audience. If you have a low CTR, the following steps can help you see some improvements in future digital marketing reports.

  • Write Compelling Headlines. This information is the first thing potential customers see with your paid media. Make it relevant and catchy while staying aligned with your vision and values.
  • Optimize Keywords. Focus on the most relevant keywords and phrases, especially if you have long-tail options for your industry. Then use persuasive language that speaks directly to the user's needs or pain points with the subject of those search times.
  • Focus on Positioning. Being in the top three positions usually results in higher CTRs. While higher bids can get you there, improving your Quality Score can also boost your ad position without increasing costs.
  • Schedule Wisely. Use ad scheduling to display your ads when your audience is most active. If you notice certain days or hours with higher CTR, consider increasing your bids during those times to get better results.

Improving your CTR requires a mix of data analysis, creative writing, and ongoing optimization. It is a dynamic process, but your sweat equity will pay off when you find the right combination. Remember – each click earned is a potential customer! 

2. Cost Per Click

How much are you paying for each click you earn from your paid media? CPC helps you understand this information to see if the budget outlay makes sense.

While lower costs per click are generally good because your money can stretch further, it's not the end-all data point that makes or breaks your campaign. You could have a low CPC and conversion rate, which is not a positive outcome.

If you want to keep your paid media KPIs in check, reviewing your CPC information is an excellent place to start. Here are some ways to get this expense under control or down into a more acceptable range.

  • Ad extensions offer additional information and can make your ad more compelling. You can increase multiple metrics simultaneously to reduce your cost per click.
  • Review the bids of your competitors to gain insights into what they’re doing, and then turn any insights you find into actionable steps to limit expenses.
  • Reduce bids for underperforming keywords and consider increasing bids for those meeting or exceeding expectations.
  • Precise targeting can lead to higher relevance and, as a result, lower CPC.

Reducing your cost per click focuses on optimizing the efficiency of your ad spending. By focusing on the elements that could benefit from improvement, you don't need to cut corners while being more innovative with your money.

3. Cost Per Conversion

This KPI tracks the cost your business incurs for each successful conversion. If you’re selling products or services, this number should be lower than the profit you make from the sale.

Let’s say your total paid media campaign generates $57,000 in revenue for a cost of $31,000. That means you’ve created $26,000 in profit from those investments. If you had 1,000 total customers for those figures, your cost per conversion would be $31.00.

Now, imagine what could happen if you could get 10,000 customers producing the same revenue while keeping the total cost at $31,000. Your profits could skyrocket!

It is easy to feel comfortable when your paid media creates profits. Are you maximizing that cash flow? Google Sheets and Looker Studio can help you catch this data point on your digital marketing report with Catchr’s help effectively. 

Improving this paid media KPI is a common goal for businesses in almost every industry. Here are the steps to follow.

  • Optimize Landing Pages. Ensure your content is relevant, visually appealing, and easy to navigate. A solid call to action can significantly improve conversion rates, thus lowering your CPC.
  • Improve Ad Quality. Review your creatives to ensure each advertisement is compelling and directly relates to what you promote.
  • Better Targeting. Be as specific as you can when defining your target audience. This approach increases the likelihood that the person seeing your ad is interested in what you have to offer.
  • Use Negative Keywords. This option filters out irrelevant searches to reduce wasted clicks. That saves your business some cash while focusing your investment on the hottest prospects.

Once you’ve taken these steps, don’t forget to adjust your bids based on the performance of keywords or demographics. If a certain one converts well but costs too much, you might want to lower your offer slightly to see if you can maintain performance while reducing costs.

4. Conversion Rate

Tracking this key performance indicator allows you to see the percentage of clicks that result in desired actions.
What you decide is a positive outcome counts as a conversion. It is often a sale, but it could be a newsletter sign-up, a click to a specific landing page, or anything else that helps your brand grow. 

A high conversion rate usually means your landing page and ad are doing their jobs well.

5. Return on Ad Spend

ROAS gives you a broader picture of your paid media investment. It's the revenue generated for every dollar (or euro, pound, and any other currency) spent on advertising. 

A ROAS of 3, for example, means you're making three dollars for every dollar spent. The higher you get this metric, the better your bottom line will be!

Several factors go into this metric, including ad quality, targeting, product pricing, and seasonality. Each element works independently or combined with the other to raise or lower the data found on your digital marketing report. 

Since a low ROAS indicates your paid media campaign could use some adjustments, these strategies could boost you when needed.

  • The more effective your landing page, the higher the likelihood of conversions and, therefore, a better ROAS.
  • Use audience data to refine your targeting. Reach out to people more likely to convert.
  • Keep an eye on your CPC and try to optimize your bids. Lower costs often lead to higher metrics, but always monitor quality and conversion rates.
  • Use A/B tests to find out what works and what doesn’t. Constant iteration can lead to incremental improvements.

This paid media KPI is a comprehensive indicator of how effectively you use your advertising budget. It encompasses various elements, from ad quality and targeting to pricing and seasonality.

Paying close attention to its changes can help you see more of what works and what needs improvement so that you can continue growing. 

6. Impression Share

This KPI tells you the percentage of impressions your ad received compared to the total number it could have gotten. It helps you gauge market share and visibility.

Think of it as a way to see how often your ads could show up compared to how often they appear. It’s a window into marketplace visibility.

Although it often flies under the radar, its value is substantial when included in your digital marketing report. A high number here means you're dominating the space so that you can review your ROI and overall spending efficiency.

Several elements can impact this KPI.

  • Budget. If you're not spending enough money on paid media, your advertising might not appear as often as possible.
  • Bid Amount. Lower bids often restrict brand visibility.
  • Quality Score. When you don’t get the expected number of impressions consistently, it can impact other KPIs and metrics. A lower Quality Score often leads to fewer placements, which lowers your Impression Share, and the cycle continues.
  • Ad Rank. This metric combines your bid amount, Quality Score, and the expected impacts of extensions and other advertising formats.

Spending more can help to move this metric upward quickly, but you can take other steps to improve it. Consider refining your targeting settings as one of your first steps. Showing your ad to a more relevant audience can increase engagement, improving both Quality Score and Impression Share.

7. Quality Score

Google Ads uses this information to gauge the relevance and quality of your ads, keywords, and landing pages. A higher number can lead to lower CPC numbers and better ad positions.

It is given on a scale of 1-10, with a 10 being the best possible score you can earn. To assign this figure, this metric looks at your keywords, landing pages, and ad quality.

A higher Quality Score can lead to lower costs and better ad placements. Conversely, a low figure can make your campaigns less effective and more expensive.

If you have a low score and want to improve it, consider taking the following steps with your paid media campaign.

  • Regularly update and refine your keyword list. Use long-tail options that are specific and relevant to your target audience.
  • Your ad copy should speak directly to the search intent. Make sure your headlines and descriptions are compelling and relevant.
  • The landing page should be user-friendly and have a strong call-to-action. It must be highly relevant to both the ad copy and the keywords.
  • Create tightly themed ad groups with closely related keywords to make your ads more relevant.

Keep an eye on this KPI and adjust as needed to keep your scores high. Even if you can only achieve a small increase, the cost savings could be substantial – not to mention the better positioning you receive. 

Why Do These Paid Media KPIs Stand Out?

Although there can be dozens of different data points to track on a digital marketing report, these KPIs stand out because they are integral to your success.

Start by figuring out which KPIs align most closely with your business goals. Once you have a place to begin, you can set benchmarks for your business. Regularly monitor the metrics and adjust your strategies accordingly so that your advertising investments deliver consistent value.

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In this template, you will find all the metrics and dimensions you would need to get a better view of your data.

If you need more templates, you could look at our looker studio template gallery.

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In this template, you will find all the metrics and dimensions you would need to get a better view of your data thank to our integrations.

If you need more templates, you could look at our PowerBI template gallery.

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