When it comes to choosing an ad testing metric, there’s no one size fits all solution. One has to choose a testing metric based on what he or she is attempting to accomplish. If you are looking to run ad tests for your PPC campaigns, there are six major metrics to use: Revenue Per Impressions (RPI), Conversion Per Impressions (CPI), Conversion Rate (CR), Return on Ad Spend (ROAS), Cost Per Acquisition (CPA), and Click Through Rate (CTR). Below is a detailed look at these metrics.
You’re Trying to Get the Most Revenue Possible
In this case, one should use the metric – RPI. It can show you the ratio between the amount of money you make and your impressions. One needs to use both the conversion data and add the actual revenue into the equation. In other words, you calculate the RPI by dividing total impressions by the total revenue.
You’re Trying to Increase Engaged Visitors
When your ads are displayed, there’s always a chance that they will convert. By featuring a specific keyword in your ad, someone may search for it. When that person does that, achieving a conversion becomes possible. To receive the actual conversion, that individual must both click on your ad and convert. One can measure from these impressions to find out the total conversions possible. Simply divide the total number of impressions by the total conversions.
You’re Trying to Increase Clicks that Lead to Conversions
CR focuses on how many clicks lead to conversions. Conversion rate can be used to evaluate the utility of incoming PPC traffic. For example, one can determine how many users’ clicks lead to an actual purchase. In other words, you can see which ads are bringing in a higher percentage of qualified traffic.
Although CR is a safe metric, it’s important that you continue checking other metrics before you declare the winner. After all, not all conversions are created equal. One needs to consider lead value and quality.
You’re Trying to Determine the Best Way to Invest Your Ad Budget
ROAS is designed to measure the efficiency of a PPC campaign. It compares one or more campaigns against each other to determine which is the most efficient and profitable. This metric has helped individuals invest their ad budgets in the right places, getting the best possible returns. You can calculate the ROAS by dividing your campaign revenue by the cost of the campaign.
You’re Trying to Determine the Cost of Getting Conversions
CPA is a metric that tells you how much a conversion may cost you. It is calculated by dividing your total costs by total conversions. This metric is best used for subscription sites, eCommerce sites (when the checkout amounts are consistently similar or vary greatly), and lead generation sites. Consider referencing CPA if your business model involves selling a single product or features a long sales cycle.
You’re Trying to Increase Visitors and Improve Quality Scores
CTR is one of the purest metrics. They refer to the ratio of impressions to clicks. One should use CTR as his or her testing metric because it can help increase quality scores and get the most traffic possible. After all an ad is useless if it only receives impressions but does not close deals. The potential customer or lead who lands on your website must click through! Remember, high CTRs typically correlate to high quality scores.
Before one runs any test, it is important to give his or her ad rotation settings a quick review. You need to ensure that the numbers you get are reliable.