Paid search is one of the most powerful tools in the digital marketing toolkit, but only if you know how to manage it and measure its performance properly. With so much data at your fingertips, it’s easy to get bogged down by numbers that look positive on paper but don’t actually tell you much about the campaign’s effectiveness.
That’s where knowing which paid marketing metrics actually matter comes in. By focusing on the right data, businesses can make smarter decisions, optimise campaigns, and ultimately drive more revenue or leads. On the other hand, ignoring these key metrics or measuring them incorrectly can lead to wasted spending, missed opportunities, and poor business outcomes.
So, whether you’re trying to scale your campaigns, improve profitability, or grow your customer base, these five metrics should be on your radar as true signifiers of success (or otherwise).
They also happen to be the topics we discuss most with our clients regarding paid and performance marketing, so we thought it was about time to discuss them in an article.
Here, co-founder and Performance Marketing Director Emily Falkingham highlights the 5 key Paid Marketing Metrics that actually matter when it comes to performance and what you can do to fix things if you don’t have the right measurement in place.
Conversion Rate (Conv. Rate)
Conversion rate tells you the percentage of users who take a specific action after clicking your ad. Whether that’s making a purchase, filling out a form, or subscribing to a newsletter.
A healthy conversion rate is a strong indicator that your ads are attracting the right audience and your website is doing its job of turning visitors into customers.
A low conversion rate, however, could signal a number of problems:
- Mismatched Audience: Your targeting could be off, leading to irrelevant traffic.
- Poor Landing Page Experience: If your landing page doesn’t align with the ad’s promise or offers a clunky user experience, users will leave and head elsewhere.
- Pricing or Offer Issues: Sometimes, the issue is not the ad or the page but the product’s perceived value or cost.
On the flip side, an unusually high conversion rate can also tell a story. It may suggest there’s untapped potential, and you should consider increasing your budget to drive more traffic and scale up results.
What you can do:
- Make sure your landing page messaging matches your ad content.
- A/B test different headlines, calls-to-action (CTAs), and layouts.
- Review your site’s mobile experience! Poor performance here can tank conversions.
ROAS / COS / ROI / CPA
These financial metrics measure the profitability and efficiency of your campaigns:
- ROAS (Return on Ad Spend): The revenue generated per £1 spent on ads.
- COS (Cost of Sale): The inverse of ROAS. Ad spend as a percentage of revenue.
- ROI (Return on Investment): Profitability after factoring in all costs.
- CPA (Cost Per Acquisition): How much you spend to get one conversion or lead
If you don’t track these, you’re not tracking profitability, and your paid marketing performance will have many blind spots. It’s that simple.
ROAS and COS should align closely with your business’s margin and profitability targets, while CPA helps you understand efficiency.
When scaling campaigns, there’s often a trade-off between volume and efficiency, and keeping a close eye on these metrics ensures you strike the right balance.
What you can do:
- Set clear profitability targets and align your bidding strategy accordingly.
- Track CPA closely. Rising costs may point to issues with audience quality or creative relevance.
- Don’t fixate solely on high ROAD. Some campaigns (like those focused on brand awareness) will naturally have a lower immediate return but can drive long-term growth.
Click-through Rate (CTR)
Click-through Rate measures how often people click on your ad after seeing it. It is calculated as (Clicks / Impressions) x 100.
A high CTR suggests your ad is resonating with the audience, while a low CTR can indicate:
- Unengaging Creative: Your ad copy, images, or offer might not be compelling enough.
- Irrelevant Targeting: If your audience targeting is off, your ad won’t appeal.
- Competitive Pressure: Competitors might be offering better deals or more enticing ads.
How to deal with a low CTR:
- Refine your ad copy to focus on clear, benefit-driven messaging.
- Ensure your targeting aligns with user intent and audience profiles.
- Experiment with CTAs and promotional offers to see what drives engagement.
New Customers Acquired
This tracks how many first-time buyers or leads your paid search efforts are bringing in.
For eCommerce and service-based businesses, in particular, growth often hinges on acquiring new customers rather than just serving repeat buyers.
Therefore, tracking this metric helps to:
- Gauge the effectiveness of your prospecting campaigns.
- Understand the balance between new and returning customers.
- Allocate budget more strategically across different audience types.
How to fix it:
- Create campaigns specifically targeting new customers.
- Offer first-time buyer discounts or special promotions to encourage conversions.
- Segment your audience data to understand where your new customers are coming from.
Impression Share
Impression share tells you the percentage of total possible impressions your ad receives in the auction. A low impression share often means you’re missing out on valuable visibility.
This can happen due to:
- Budget Restrictions: You’re being outspent by competitors.
- Ad Rank Issues: Poor quality scores or low bids can reduce visibility.
- Increased Competition: More brands entering the auction can push your share down.
What to do:
- Increase your budget for high-performing campaigns.
- Improve ad quality by making sure your copy and landing pages are highly relevant.
- Monitor competitor activity and adjust your strategy when needed.
The risk of measuring the wrong Paid Marketing Metrics (or overlooking the right ones!)
It’s easy to get distracted by vanity metrics like impressions or clicks when it comes to assessing paid marketing performance.
Let’s face it: they make reporting numbers look high, but they don’t always tell you whether your campaigns are actually driving business results, and they don’t always result in pounds and pence.
Ignoring key metrics or measuring them incorrectly can lead to:
- Wasted Ad Spend: Without tracking ROAS or CPA, you risk funnelling money into campaigns that aren’t delivering returns.
- Missed Growth Opportunities: A high conversion rate with low traffic suggests you’re not scaling up when you should be.
- Ineffective Targeting: Low CTR or impression share often signals a mismatch between your ads and your audience.
- Stagnation: Without monitoring new customer acquisition, you may become over-reliant on repeat customers, limiting long-term growth.
In short: if you’re not measuring the right things consistently, you make decisions in the dark, which is a fast track to underperformance.
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To us at Green Ginger Digital, paid marketing success comes from focusing on the metrics that drive meaningful results. Conversion rate, profitability, engagement, customer acquisition, and visibility are the foundation of any high-performing campaign.
Get these right, and you’ll have a clearer understanding of what’s working, where to optimise, and how to scale. Ignore them, and you risk wasting your budget on guesswork, slipping further away from the results you need to keep growing.
If you’re finding your paid marketing performance reports are filled with vanity metrics that don’t paint an accurate picture of performance, it might be time to shake things up and find an agency that doesn’t hide, instead providing comprehensive forecasts on what’s truly possible for your business, whether that’s across Paid Search, Organic Search or Paid Social.
That’s what Green Ginger Digital can do, and has done, for the past 5 years.
Get in touch if you want to discover why we’re trusted by go-getting brands like PACK’D, Urban Lockers, Beal Homes and Face the Future.
