The Importance of Setting a KPI for Google Ad Campaigns
Whether you're an in-house employee, work for an agency, freelancer or business owner it’s important to identify what Google Ad metric is going to be your key performance indicator (KPI) before starting the campaign.
What is a KPI and why is it important?
The KPI is simply the metric you will judge your campaign’s performance by. It’s important because not all metrics go up and down together. For example, just because your cost per conversion is going down doesn’t mean conversion volume is up. Just because your return on ad spend (ROAS) is up doesn’t mean conversion volume and revenue is up. Just because conversion volume and sales revenue are up, doesn’t mean your ROAS is higher. Just because the conversion rate is up doesn’t mean your ROAS is also up, etc.
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Whether you're an in-house employee, work for an agency, freelancer or business owner it’s important to identify what Google Ad metric is going to be your key performance indicator (KPI) before starting the campaign.
What is a KPI and why is it important?
The KPI is simply the metric you will judge your campaign’s performance by. It’s important because not all metrics go up and down together. For example, just because your cost per conversion is going down doesn’t mean conversion volume is up. Just because your return on ad spend (ROAS) is up doesn’t mean conversion volume and revenue is up. Just because conversion volume and sales revenue are up, doesn’t mean your ROAS is higher. Just because the conversion rate is up doesn’t mean your ROAS is also up, etc.
When you don’t set a KPI early on, what ends up happening is you’ll optimize the campaign to say lower cost per conversion because that’s what your boss or client said they want but then once you achieve their desired cost per conversion they complain that conversion volume is down.
Or you’ll optimize the campaign to increase ROAS and once you hit the desired ROAS on the campaign they complain about overall sales revenue being down.
It’s crucial they understand that they can’t have all these metrics go up which is why it’s important to propose and agree on a KPI, ideally before you even start the campaign.
Doing this will make your life as a Google Ad Manager much easier. And if you’re a business owner managing your own campaigns, it’ll alleviate a lot of confusion you may have around driving performance for your campaign. Just remember, you can’t have it all and you will have to decide what metrics are most important to you and your business.