In online marketing, we talk every day about marketing KPIs such as conversions, click-through rates and impressions. At first glance, these online marketing terms seem inaccessible and abstract. That's why we now bring light into the darkness! In this magazine article we explain everything about the most important marketing KPIs and online marketing terms.
The abbreviation KPI stands for the term "Key Performance Indicator" and describes a key figure that shows the success of certain activities within a company and thus makes it tangible. For this purpose, measurement data is collected at regular intervals, which can then be compared with previous periods. The primary aim is to be able to consider and evaluate the efficiency and effectiveness of one's own activities.
Special KPIs are also used in online marketing. In the next section, we explain which KPIs are used most frequently in online marketing and what the individual key figures say exactly.
There are numerous technical terms and abbreviations in the area of paid Google Ads advertising. Some marketing KPIs can easily be misunderstood and cause misinterpretations. Here you will find the most important online marketing terms with simple and understandable explanations.
The Impressions column shows the total number of times an advertiser's ad was served. For example, if an ad is displayed in Google search, this is counted as an impression. It doesn't matter where exactly the ads are displayed: whether in the search network, the display network, Google Shopping or YouTube. And the position of the playout within the Google search is not particularly taken into account in this online marketing key figure. Incidentally, impressions are free for the advertiser as long as the ad is not clicked.
And that brings us to the next key figure in online marketing: the clicks. The "Clicks" column indicates how often users actually clicked on one of your Google ads. Compared to impressions, you have to pay for clicks. Google Ads only incurs costs when users actually click on your ads and land on the desired landing page.
The so-called "click-through rate" (CTR) or click rate indicates the percentage of your ads that were clicked on after an impression was made. This marketing metric can say a lot about the quality of your ads. A low click rate can, for example, alert you to existing errors within your advertisements. For example, if your ad was viewed a thousand times and only clicked ten times, your ad's CTR is 1 percent. In this case, you should think about why your ad is not engaging users and how you can fix this problem.
As mentioned above, an advertiser only pays when the ads are actually clicked. The so-called "cost-per-click" shows how much has to be paid on average per click on an ad. The respective click price depends on various factors. This includes, for example, the competition for the respective keyword and the ad relevance of your ad. We will go into these online marketing terms below.
"Keywords" are search terms that the user can enter into the search bar of a search engine and for which we can therefore place our paid ads. You can place a maximum CPC bid on Google Ads for each selected keyword. This bid is the maximum amount you are willing to pay for that specific keyword.
A "conversion" is an individually defined target action on a website. With shop operators, purchases on the website are usually defined as conversions. These purchases can then be displayed in detail over time in the Google Ads interface. Furthermore, advertisers can also define PDF downloads, telephone calls lasting more than 60 seconds or successfully completed contact forms as conversions. By tracking these marketing KPIs, the success of your own website can be measured precisely and compared with different periods of time. Conversions are therefore one of the most important online marketing key figures of a website.
This key figure in marketing can also be individually defined by the advertiser. An individual "conversion value" can now be set for the previously defined conversions. Shop operators often use the sales price of the products here. But contact forms can also be worth ten euros to the advertiser, for example, or calls five euros.
The "conversion rate" indicates how often an interaction with or a click on the ad led to a conversion on average. This marketing key figure can be used to determine whether the resulting clicks on the paid advertisements were also effective. For example, a low conversion rate with a high number of clicks can show that the user was drawn to the offer in the ad, but couldn't find that particular offer on the website or didn't want to take advantage of it for some reason. Was the information architecture of your own website perhaps too confusing? Were the users put off by certain elements or statements and did they leave as a result? Did the specific wording in the ad give users the wrong expectations? This marketing KPI offers important clues that the advertiser should look into carefully.
This online marketing metric is also known as “ROAS” (Return on Ads Spend). This KPI indicates how much revenue could be achieved from one euro of advertising budget. It shows the advertiser exactly how effective and profitable the paid advertising is. The metric can also help you decide between different campaigns.
The "Quality Score" consists of three different components: the ad relevance, the expected CTR and the user experience with the landing page. We will also go into these individual marketing key figures in the course of the magazine article. The quality factor indicates a value from a minimum of 1 and a maximum of 10. Basically, the higher the quality factor, the better. A high quality factor can also lower click prices, since Google rewards the quality of the ads to ensure a positive user experience.
"Ad relevance" indicates how closely the keyword matches the text of your ads (ranging from below average to above average). A below-average ad relevance can mean that the ads are kept too general and, for example, the keyword is neither in the ad title nor in the ad description. As described in the previous section, low ad relevance results in a low Quality Score and therefore higher click costs
We have already described the click rate (CTR) in a previous section. Now it's about the "Expected CTR". This assessment is determined by Google using a special algorithm and indicates the likelihood of users clicking on your ad when they see it. This marketing KPI also has a major impact on the quality factor of your advertisements.
With the KPI " User experience with the landing page", Google tracks the users on our website and uses this to decide to what extent the target pages are relevant for the user and to what extent the content of the target page matches the user's search term. Google also checks what actions users take after clicking on an ad on the target page or whether they may leave the page immediately after the click.
This marketing metric indicates the percentage of ads that are broadcast after the appropriate keyword has been entered. This marketing KPI therefore only relates to Google search. A bad value in this area can indicate, for example, that your own bids (maximum CPC) need to be increased.
Many of the above terms can also be found in social media marketing on Facebook and Instagram. However, these marketing channels also use some other special online marketing terms.
The terms “range” and “frequency” also appear on Facebook and Instagram. The reach indicates the number of people who have seen the advertiser's ads at least once. The frequency shows the advertiser how often a person has seen the ads on average.
Finally, there is also a “relevance rating” of the ads on Facebook. Like the quality factor within Google Ads, this can have a value between 1 and 10. The rating shows how well the respective target group reacts to the advertisement. Comments or likes, for example, have a positive influence on these marketing KPIs.