Inside Google Ads podcast: Episode 18 - Metrics that matter
How do you know if your Google Ads are performing well?
It's a question I get a lot, and one that confounds business owners and practitioners alike. How do we know if we're getting the best results from our Google Ads campaigns?
Let's talk about it.
I'm your host, Jyll Saskin Gales. I spent six years working for other brands at Google, and now I work for you. This is Inside Google Ads: Episode 18, Metrics That Matter.
Let's dive in.
Our first question comes from dreenagh on TikTok, and they ask, what is a good ROAS?
I will put a stake in the ground to give you an answer, but let's dive into this a little first.
The first thing I want to say is that there's really no good or bad metrics. Metrics are morally neutral. There's just where you are today and where you want to get to.
So the simplest answer is actually a good ROAS is one where you are profitable, where you are getting more money out of your ads than the money you're putting into ads.
Let's dive one layer deeper into what that means.
ROAS stands for return on ad spend, and it's calculated as revenue divided by cost. In the Google Ads interface, the way you'll find your ROAS is not a ROAS column. There's not one of those. It is the Conversion value / Cost column.
Now in plain English, what does a ROAS mean? If you have a ROAS of 3.6, what that means is that for every $1 you're spending on ads, you're getting $3.60 back in revenue.
If what you care about in Google Ads is ROAS, you're likely going to use a Target ROAS Bid strategy. Maybe not to start, but that's where you're going to want to get to because then you can tell Google, rather than caring about how much I'm spending on each click or each view, this is the ROAS I want to get, set my bids accordingly to get me there.
An important thing to keep in mind is when you set a Target ROAS in Google Ads, you enter it as a percent. But when you see ROAS reported in the Conversion value / Cost column, it is as a decimal. So a ROAS of 3.6 is the same as the Target ROAS of 360%.
Yes, I did once have a situation with a client where they wanted a ROAS of 3. They entered their Target ROAS as 3%, which is actually 0.03. And not surprisingly, performance really tanked after that. So please don't make that mistake. I had to mention that here.
But when you set your Target ROAS, it's going to affect your bids and it's going to affect how scalable your campaign is.
The higher your ROAS, the less you're going to be able to scale, meaning the fewer people you're going to be able to reach. And the people you do reach are probably people who are already familiar with your brand. Maybe they heard about you somewhere else, it’s on a Brand search or it's on Remarketing.
Whereas, if you accept a lower ROAS, you're going to be able to reach more people who may not be as immediately profitable in that first click. Maybe they're not going to convert right away, but maybe on a second or a third click, they'll convert, for example.
So it's something to keep in mind. A high ROAS does not always mean better ROAS. If your ROAS is too high, that can actually be a problem.
When I was working at Google, there was one very large retailer we were working with and the ROAS on one of their campaigns was 34. A 34x ROAS! For every dollar they put into Google Ads, that meant they got $34 out.
Now that may seem amazing. Hooray! Best ROAS ever. But it wasn't.
This was a Brand Search campaign, and even then it had such a restrictive thing on it that like, of course, if you're getting a 34 ROAS, you're only reaching the people who are already searching for your brand and ready to buy. That's not bringing incremental value to your business.
So the question was, and I do want to answer dreenagh’s question, what is a good ROAS? Beyond the “it depends” and beyond the “a good ROAS is where you're profitable,” I will say when in doubt, 2-3x. Good ROAS, achievable ROAS with no other context. If you have no idea, that's a good starting point.
But in order to get a good idea of what your ROAS should be in Google Ads, I recommend you look at your profitability to understand what your profit margins need to be. I recommend you take into account the lifetime value of a customer, not just the value on a first purchase, and then use that to determine how much revenue you need to get back from every dollar you put into Google Ads.
Our next question comes from Wooden Art on TikTok, and they ask, what is a decent Impression Share?
I will give an answer, but first I need to say once again, there is no good or bad Impression Share. Impression share is a diagnostic tool. And all it means is of all the times you could have shown an ad, how often did you show an ad?
So if you have an Impression Share of 15%, for example, that means of all the times you could have shown an ad, because someone was searching for your keywords and matched your Location Targeting, like they were in the eligible audience, you showed an ad 15% of the time. It doesn't mean you got a click, just you got that impression. And then it means 85% of the time, you didn't show an ad, even though you were eligible to.
When you're looking at Impression Share, it's helpful not to look at it in a vacuum. You're going to want to add those two additional columns next to it for Search Lost Impression Share (Rank) and Search Lost Impression Share (Budget).
Because that'll tell you that for that 85% Impression Share you lost, for your lost Impression Share where you didn't get the impression, why did you lose out on those impressions?
Was your ad rank too low, which means your bids were too low or your quality was too low? Or both? Or was your budget too low?
Keep in mind, though, that if you are on a Maximize bid strategy, those columns, the difference between them doesn't really mean anything. But if you're on a Manual strategy or a Target strategy, they absolutely do mean something.
Okay, so for brand search, I like an Impression Share of at least 80%, because if we're advertising on our brand, it's because we want to be at the top of the page and people are searching for us.
If there's no one else competing on your brand at all, then I like even 90%+ Impression Share, and it should not be very expensive to get there.
If we're talking about non-brand search, again, there are no good or bad, but just personally, I don't like my campaign-level Impression Share to be less than 10%. Because if we're going to all that effort to optimize these keywords and these ads and settings and all that stuff, and we're not even showing an ad at least 10% of the time, it's just not worth it to me.
If your Impression Share is really low, again, that's not bad per se, but it's based on your targeting. So your Impression Share can get higher by targeting fewer keywords or fewer location or setting other restrictions.
So what is a decent Impression Share? It's one where you're getting enough visibility, enough impressions, to justify all the effort you're putting into your ads. And look at your Lost Impression Share to make sure you're not losing out by an easily fixable problem, like limited by budget, when you don't need to be.
Now, we've spoken about ROAS. We've spoken about Impression Share. There are a lot more metrics that could potentially matter to you in your Google Ads results. I talk about this in both my Google Ads courses, Google Ads for Beginners and Inside Google Ads.
Google Ads for Beginners is meant to be a more introductory overview to how Google Ads works. So if you have no marketing experience or minimal marketing experience, that would be the right course for you to start learning Google Ads.
Whereas Inside Google Ads is going to go into much more detail and show you how to actually apply these different things in the Google Ads platform. So if you do have some marketing experience or some Google Ads experience, then you would want to start with Inside Google Ads.
You can find both at learn.jyll.ca, that's J-Y-L-L dot ca, or follow the links in the episode description.
Our last question today comes from bisquick22 on TikTok.
And they say, “When I open the dashboard, it's just so much data. I don't know what numbers are most important to pay attention to. I'm trying to take over our Google Ads account, but it's very overwhelming. We rely on it for new customers, so I'm really scared to mess it up.”
The first thing I want to say bisquick22 is you are not alone.
The Google Ads interface is very overwhelming. There are more than a hundred different columns you could add to your report, and even more metrics you can see in the custom report editor or creating custom columns. We're not even going to go there.
So the way I like to break this down is into reach metrics and efficiency metrics. And this is Jyll language by the way, not Google Ads language.
A reach metric tells you how much of something you got. How many impressions, how many clicks, how much cost, how many conversions, and how much revenue? Those are all reach metrics.
An efficiency metric tells you the rate at which something happened, like click-through rate or conversion rate, or the cost per, so your cost per click, cost per conversion. Or comparing two reach metrics together, right? So your ROAS is an efficiency metric. It tells you how efficiently your cost is turning into revenue.
When you're trying to analyze your metrics, I recommend looking at a reach metric and an efficiency metric together, because one doesn't make any sense without the other.
And I'll give you an example of why. I had someone comment on one of my posts recently, “I got a 100% Conversion rate on my Google Ads and then it went down.”
And I'm like 100%... okay. Here's what happened. They turned a campaign on, they got one Impression, one Click and one Conversion. And then - shocker - after that, they got more Impressions, a few more Clicks and no more Conversions for a day or two.
That’s luck, my friends! The fact that you got a 100% Conversion rate on 1 Click is luck.
Now, if you told me that you got a 100% Conversion rate on 56 Clicks, I would be way more impressed, but that's not going to happen. And so that's why you can't just give one metric without the context of another.
And for a practical example, let's say that you got 10 Clicks. Is that good? Is that bad?
Well, if you had 50 Impressions with 10 Clicks, then that's a 20% Click-through rate. That's really strong.
Whereas, if you had 10,000 Impressions and 10 Clicks, that's less than a 1% Click-through rate, not so strong.
When you first start analyzing an account, I recommend focusing on Impressions and Click-through rate, because those put each other in context. And then Impression Share is really helpful to understand how you're making a mark, or not making a mark, on your chosen targeting.
On an ongoing basis, your metrics that matter - of course, it may be different for everyone - but usually, a good starting point is Conversion rate, Conversions or Conversion value, and then ROAS or CPA, depending on which makes most sense to your business. So those conversion metrics.
Just looking at the number of Conversions alone, or even your ROAS alone, isn't going to help unless you put those in context of another. And then I really like keeping the Conversion rate as a focus because that helps us understand if we are getting the right kind of audience to our website or not from those Clicks we're getting.
So keep your reach metrics and your efficiency metrics in mind, and analyze them together in order to really understand how your ads are performing.
Now, if you take one thing away from this episode, let it be this. There are no good metrics or bad metrics, just where your campaigns are today and where you'd like to get them to. And the way to get there is by setting goals and systematically testing new tactics until you get there.
Now, it's time for a new Insider Challenge, and then I'll share my response to the Episode 16 challenge, since there was no challenge during our special Google Marketing Live episode last week.
Here's your challenge. Your friend who has a business in the same industry as you tells you that their Google Ads CPCs are under a dollar. They're not trying to brag. You just both like to talk business together and share best practices with each other.
Now, your CPCs are not under a dollar. Yours are in the $3 to $5 range.
You tell your friend that and they say, “Oh, you should fire your Google Ads freelancer – $3 to $5 CPCs are terrible.”
How do you determine if they're right? How do you determine if your Google Ads are performing well or not, based on this information?
Now, you can participate by sending me your response for this challenge or any episode’s challenge. The beauty of the Insider Challenge is there's no right or wrong answer, just an opportunity to stretch your brain on real life Google Ads problem solving.
Shoot me an email at thegooglepro@jyll.ca, that's J-Y-L-L dot ca, or send me a voice note in my Instagram DMs. I'm @the_google_pro on Instagram.
In Episode 16, we talked about how budgets really work in Google Ads. So be sure to check that episode out if you haven't already.
And the challenge was this. You have a new B2B SaaS startup client that wants to spend $50,000 a month on Google Ads for at least six months. How do you pace the budget?
So here's my answer. Well, of course, it depends. I would lean towards front-loading the budget and then whittling down based on results.
$50,000 a month works out to about $1,600 or $1,700 per day, which is enough for us to really test some Search, Demand Gen, Video, different creative, keywords, and audiences.
I wouldn't start with PMax. Again, personal preference, because this is a brand new advertiser. I like to put the different pieces in place. If they work well individually, then absolutely, let's run a PMax campaign or a few Performance Max campaigns. But since this business is new to advertising, I like to learn on the individual standalone campaign types so that we can refine our creative and our messaging with much more data and targeting at our disposal than what you'd get in PMax. And especially since this is a B2B company, that can be a bit trickier.
It's not necessarily lead generation, you know, a SaaS subscription software usually, but that's where I'd probably start.
Now, one thing I would be really cautious of, since this is a startup, and since this is a subscription product, is to ensure that I'm communicating well with the founders and we have aligned goals from the get-go.
My experience with startups is that, rightly so, they can pivot quickly. They can change the product overnight. They can completely overhaul the marketing strategy at the drop of a hat. So with this kind of client, especially since they're new to ads, they probably have a lot of preconceived notions about them, I would focus hard on my client communication and education alongside my campaign management.
I once had a founder say to me, when I asked, “Can you send me some creative for the campaign?” They said, “Oh, just make 100 memes and run that as ads.”
Yeah, I fired that client shortly afterward, but it was also my fault for taking them on in the first place when they had unrealistic expectations about how ads work.
So what would you do? Do you like to start small and then scale up into a budget? Or do you like to go big or go home?
Shoot me an email at thegooglepro@jyll.ca, that's J-Y-L-L dot ca, or send me a voice note in my Instagram DMs.
I'm Jyll Saskin Gales and I'll see you next time Inside Google Ads.