SEM Metrics: Key Performance Indicators You Should Track

by | May 31, 2024 | Analytics

Whether you’ve just launched your first search engine marketing (SEM) initiative or have run multiple SEM campaigns, it’s essential to carefully measure your progress to see what works and what doesn’t. You’ll need to pay attention to the right SEM metrics to do that.

There’s just one problem. There are so many key performance indicators (KPIs) out there it’s easy to get lost in the data. To help you cut through the noise, the Full Circle SEM team has identified seven SEM performance metrics you need to be tracking.

What’s a KPI?

A key performance indicator is a quantifiable value that demonstrates how effective a company is at achieving a specific business objective.[1] KPIs are used to evaluate your company’s success at performing a particular activity in which it engages, such as driving conversions with your pay-per-click (PPC) campaign.

Think of each KPI as a piece of the puzzle. Alone, they give you a glimpse into your efficacy at a very niche level. However, when you combine multiple metrics, you can obtain a functional understanding of things like organic traffic volume or the cost-effectiveness of ad campaigns.

7 SEM Metrics You Need to Be Tracking

There are dozens of different SEM metrics that you can monitor. While it’s essential to customize your analytics strategy based on the unique needs of your business, you also want to avoid information overload. With that in mind, here are seven great KPIs to use as the foundation for your analytics strategy:

1. Click-Through Rate (CTR)

Click-through rate is a fundamental metric that records the ratio of users who click on your ad when they see it. A high CTR indicates that your content resonates with the target audience and generates intrigue.

To track CTR effectively, you can use analytics tools provided by search engines like Google or Bing. By analyzing CTR data, you can identify which ads are performing well and optimize those that aren’t connecting with users.

Remember, not everything is going to be a home run right away. However, you don’t want to run an underperforming ad for weeks. By tracking CTR, you can decide when to adjust the course.

2. Conversion Rate

Conversion rate measures the percentage of users who take a desired action, such as making a purchase or filling out a form, after clicking on an ad. Tracking conversion rate allows you to assess the effectiveness of your SEM campaign in driving valuable actions. After all, what good is an ad if it’s not turning prospects into customers?

However, a conversion doesn’t always have to be a sale. You should choose a conversion action that aligns with the goal of your campaign. For instance, if you want to build your email list, signing up for your newsletter might count as a conversion.

3. Cost-Per-Acquisition (CPA)

Cost-per-acquisition measures how much you spend, on average, to acquire a customer. It helps your team evaluate the efficiency and profitability of your advertising efforts by comparing the CPA to the revenue those customers generate.

By optimizing CPA, you can allocate your advertising budget more effectively and improve the overall return on investment (ROI) of SEM campaigns. For instance, let’s say that the cost per acquisition on social media is $1 less than the CPA for Google Ads. In this case, you may allocate more funds to social media marketing.

4. Return on Ad Spend (ROAS)

ROAS examines the revenue you generate for every dollar you spend on advertising. It provides insights into the profitability of your SEM campaigns and helps you assess the overall efficacy of your marketing efforts.

A higher ROAS indicates that the campaign is generating a positive return. A lower ROAS indicates you might need to retool your campaign strategy.

5. Average Cost-per-Click (CPC)

CPC is the average amount you spend on each click on your ads during a PPC campaign. It’s an essential metric for measuring the efficiency of SEM campaigns and determining the cost-effectiveness of advertisements.

If the CPC is too high, consider targeting less competitive keywords. Alternatively, you may want to focus on more affordable marketing channels, such as social media or email.

6. Quality Score

Google and other search engines use Quality Score to evaluate the relevance and quality of ads and keywords in SEM campaigns. Google’s algorithm accounts for factors including the relevance of your ad to the audience, expected click-through rate, and the experience visitors have on the landing page they click through to.

A higher score can help you achieve better ad placements and lower costs. Conversely, a lower score can lead to reduced visibility.

7. Impression Share

Impression share measures the percentage of times your ads are shown compared to the total number of eligible impressions. The higher the percentage, the better the visibility of your content.

A low impression share means a reduced reach. By increasing your impression share, you can expand your brand’s exposure and reach more potential customers.

Tracking and Analyzing KPIs Effectively

Ready to start tracking the reach of ad groups, cost per conversion, and other facets of your digital marketing strategy? If so, Google Analytics can provide a great launch point for your analytics journey. It’s free and user-friendly. It also offers a ton of insights.

After you’ve interpreted the data, it’s time to put it to work. You can also test various ad copies on your landing pages and other pages to see what resonates with your target audience. There’s always a trial and error component to SEM.

However, you can take the guesswork out of the trial-and-error process with KPIs. Instead of wondering what worked and why, you can support your choices with quantifiable data.

Once you’ve familiarized yourself with Google Analytics and the basics of KPIs, you can explore supplemental analytics platforms or partner with a third-party firm. A great SEM performance partner can help you collect, analyze, and use the data gleaned from KPI monitoring tools.

Unlock the Potential of Your Campaign With Full Circle SEM

At Full Circle SEM, we embrace the concept of metric-driven marketing. By analyzing relevant SEM metrics, we take the guesswork out of planning, orchestrating, and optimizing your campaigns.

Ready to learn more? Contact our team to chat about your digital marketing goals!




Justin Ober

Justin built his first website and eBay store while in high school (circa 1999) and has had a hand in internet marketing ever since. After graduating from Penn State University he headed for warmer weather in sunny South Florida, where he worked on both the client and agency side of digital marketing. Yada, yada, yada, he's since managed over $30 million in digital ad spend and is an expert in all things PPC.

If you’re ready to take your brand to the next level, call 888-757-2714 or contact us here today.