It’s that time of year again, budget meetings and market analysis time. With this comes the endless work of figuring out your advertising budget for the year and figuring out whether your advertising is working properly.
The good news is that will all the advancements in technology, there’s more information out there than ever to try and figure out what is and isn’t working.
The downside, of course, is that it is pretty much impossible for someone to actually look through all the information available without wasting a ton of time.
The real trick is not just making sure that you are looking at all the relevant information, but also making sure that you are looking at only the relevant information. In short, when it comes to PPC metrics/PPC campaigns metrics, you want to ensure that you are pinpointing the correct KPIs to focus on.
Pay per click advertising is quickly becoming one of the simplest and most cost effective means of getting your brand out there. With all the free extensions that custom tailor your ad experience to reach the customers you need it’s important know what data matters and what to look at.
All PPC’s have KPIs (Key Performance Indicator) that tell you how well that ad is performing. Most of them are fairly standard and should be part of everyone’s advertising report. Number of clicks, sales, return visits, all these things are important to your marketing budgets
Some data though, not so much.
Here is a freebie: the percentage of customers with red hair probably is not a valuable KPI.
There are a ton of different metrics that you can use to evaluate PPC marketing campaigns, but for the most part, they are going to be split into three different categories: traffic data, conversion data, and sale data. We are going to go a little deeper into each category in this article, but here is a simple rundown of the big three:
Ideally, your marketing analysis should be focused on all three of these categories.
Traffic data is probably the most dense of the three. You can learn a lot from all this data. User locations, likes, habits, demographics, all sorts of key persona information about potential customers.
This is useful stuff, and is often worth a deep dive, but it is not exactly the magic bullet KPI that we are looking for here. For traffic data, there are basically two major PPC metrics that you are going to want to check first:
If you’re using a PPC campaign then you probably know at least that much. The trick is figuring out whether or not it’s working.
For instance, if you have one campaign that costs $2 per click and gets you a CTR of 4% and a second campaign that costs $5 per click but gets you a CTR of 5%, you might think option two is better.
However, the cost per click is more than double so the CTR increase isn’t worth the advertising cost. Knowing this one metric is the difference between brilliance and disaster, unless of course you like throwing money away, but we figure you don’t.
The most important piece of data here is conversion rate, which is essentially the percentage of people who become customers after visiting your site. The average conversion rate can vary wildly depending on the industry and the services you actually provide, so you would have to look at industry-specific info to figure out whether you are performing well with your ad PPC campaigns or not.
You should be looking at your conversion data alongside your traffic data so that you understand how many users are visiting and out of those, how many are buying. The key question you want to answer is “Is my sight working? “ .
If people are visiting and not buying, then the answer is a flat no. Figuring this out will help you identify the problem instead of changing your ad campaign or throwing more money into advertising. If people are visiting but not buying, then the problem isn’t the ad, it’s your site.
The other big question is “Am I reaching the right people?” This is also best done by looking at traffic data and conversion data together, especially demographic and interest data. If you are a divorce firm with a low conversion rate and a CTR that is highest among the 14-19 age group, then you can probably figure out that the issue is not with your website. You cannot sell divorce to teenagers, no matter how good your site design is.
So, since your business makes money through sales and not through clicks, sale data is going to be the ultimate arbiter of whether or not your PPC marketing strategies approach is working for you. You do not just want to know if your Google ads are catching eyes, or creating customers, you want to know if they are driving sales.
The best metric for this is going to be ROAS, or “return on ad spend.” Basically, you’re finding out if what you’re spending on Google ads is translating to more sales for your business. We all have to make money to stay afloat, but if your advertising is costing more or even almost as much as you’re making from customers, then it’s not working.
At that point, it’s about taking an inventory of what ads are working and aren’t and eliminating waste. It’s easy to just let ad campaigns go since PPC is easy to automate, but at the end of the day, you’re ad spend or spending money hoping to make more than you’re spending, if that isn’t the case, your business won’t last.
While most KPIs include quantitative data analysis, there may be some qualitative issues you should track that may not be included here. For instance, understanding how your online brand is perceived and working to fix that may be more important than CTR. After all, who would convert to a brand who’s preceded reputation was sullied and irreparably harmed?
A KPI that is important to one company may not matter right now for another. What performance is considered “good” for you, another company may not care about. Track what matters for revenue, but also consider tracking areas that are sometimes hard to measure and not easily understood.
So, now you know what data to focus on. Hopefully, this makes managing your marketing budget a little easier and points you in the right direction when deciding on your next PPC campaign.
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When this apartment complex client partnered with PPC.co, their goal was clear: generate more qualified leads through Google Ads. In just 60 days—from January to March 2025—we transformed their paid acquisition performance. Total conversions more than tripled, jumping from 10 to 32, while the overall conversion rate soared by over 300%. At the same time, we drove down the cost per conversion by 44%, delivering significantly more leads at a much lower cost.
By strategically combining Performance Max and high-intent Search campaigns, we not only increased lead volume but improved overall efficiency and ROI. This rapid and measurable improvement underscores the value of data-driven optimization and expert campaign management.
This case study is a testament to what can happen when a well-structured campaign meets expert strategy and continuous optimization. Whether you're launching a new property or looking to boost occupancy in a competitive market, PPC.co delivers real results—fast.
Ready to grow your leads and lower your cost per conversion?
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If you’re running an e-commerce or retail business, you already know that visibility is everything. The best product in the world won’t sell if no one sees it. That’s where paid ads for ecommerce comes in.
Done right, they drive traffic, conversions, and repeat customers.
Done wrong, they drain your budget and leave you wondering what went wrong.
Whether you’re spending $500 a month or $50,000, your goal is the same: profitability. Not just clicks, and certainly not just impressions. You want to turn ad dollars into real, predictable revenue.
So how do top-performing e-commerce and retail brands make their paid ads work?
What are they doing that you’re not?
This guide breaks it down step-by-step, so you can start running profitable ads with confidence.
Before you launch a single campaign, you need clarity on your audience and goals. Are you trying to boost first-time sales? Increase average order value? Each objective requires a different strategy and metrics for success.
Don’t fall into the trap of launching ads just to “see what happens.” Paid media works best when it’s part of a bigger strategy. So before you log in to Google Ads or Meta Ads Manager, get specific about what success looks like.
If you want to run profitable paid ads, knowing your numbers is the foundation of your entire strategy. Without a clear understanding of your margins, break-even points, and how much you can afford to spend to acquire a customer, you’re essentially gambling with your ad budget.
And in e-commerce, that can get expensive fast.
Let’s start with the most critical numbers you need to know:
Your break-even ROAS tells you the minimum return you need on your ad spend to not lose money. It’s calculated by dividing 1 by your gross profit margin.
So if your margin is 50 percent, your break-even ROAS is 2.0. That means for every $1 you spend on ads, you need to make $2 in sales just to break even.
For example, let’s say you’re running Facebook Ads and spending $1,000 on a campaign. If your break-even ROAS is 2.0, you need to generate at least $2,000 in revenue to avoid losing money. Anything above that is profit. Anything below that eats into your cash.
Once you know your numbers, you can reverse-engineer your ad strategy instead of throwing money into the void and hoping for results. For instance, if your AOV is low (say $25), you might struggle to profit from ads unless you have a very low COGS or high conversion rates. In that case, you might want to:
On the other hand, if your AOV is $150 and your margins are strong, you have more room to compete in ad auctions, bid more aggressively, and test multiple audiences and creatives without instantly wiping out your profit.
A lot of beginner advertisers focus entirely on immediate return from ads. That’s understandable – but short-sighted. If you’re breaking even or slightly losing on the first sale, that might still be a smart move if you’re building long-term customer relationships.
That’s where Customer Lifetime Value (LTV) comes in. If you know that your average customer places three orders a year, each worth $60, then their LTV is $180. If you spend $40 to acquire that customer with your first ad, but earn $140 more over the next 12 months, that ad was extremely profitable in the long run.
Top e-commerce brands build their paid strategies around LTV-to-CAC ratio – how much they earn over time compared to what they paid to acquire the customer.
A healthy ratio is usually 3:1 or higher. So if you’re spending $50 to acquire a customer, you want to earn at least $150 from that customer over time.
Once you understand your numbers, you can plan your ad spend with precision. You’ll know exactly:
Let’s say you want to make $5,000 in profit this month, and your product has a 50 percent gross margin. That means you need $10,000 in sales. If your target ROAS is 2.5, you can spend up to $4,000 in ad spend to hit that goal. With those numbers in hand, you now have a roadmap for campaign budgeting, not just a shot in the dark.
Every ad platform has strengths. But if you try to use them all at once, you’ll burn through your budget without learning much. Instead, pick one or two that align best with your business model and customer behavior.
If you’re selling visually appealing products like apparel, skincare, or home goods, platforms like Instagram and TikTok can deliver strong returns – especially with the right creative. If you’re focused on high-intent buyers, Google Search and Shopping Ads are goldmines. And if you’re targeting professionals or B2B retail buyers, LinkedIn may offer surprising results.
Test channels strategically. Start with the one that matches where your customers spend their time and scale from there. The best platform for you is the one where your ideal customers are already shopping, scrolling, or searching.
One of the biggest mistakes retailers make is casting too wide a net. You don’t want everyone to see your ad – you want the right people to see it.
On Google, this means targeting high-intent keywords that signal buying behavior. Focus on terms like “buy,” “best,” “free shipping,” or product-specific searches. On Facebook, Instagram, or TikTok, you’ll want to dial in your custom audiences using demographic data, lookalikes, interests, and behavior.
Don’t forget retargeting. Most people won’t buy the first time they visit your site, but retargeting brings them back when they’re ready. Set up ads that follow people who viewed a product, added to cart, or engaged with your brand but didn’t check out.
The more relevant your targeting, the more efficient your spend and the higher your return.
Creative is the make-or-break factor in most e-commerce ad campaigns. You can have perfect targeting and the right product, but if your ad doesn’t grab attention in the first two seconds, it won’t convert.
Your creative needs to do three things quickly:
Use high-quality product photos or videos. Show your product in action. Highlight a clear benefit or solve a specific problem. Incorporate customer reviews or user-generated content to build trust.
For paid social, test multiple creatives at once – video vs. image, UGC vs. branded, short-form vs. long-form – and let performance data guide your iterations. On search platforms like Google, focus on copy that’s compelling and packed with relevant keywords. Test different headlines and descriptions to see what gets the best click-through rate.
Sending paid traffic to your homepage is a rookie mistake. You want every click to land on a page that’s designed to convert. That means fast load times, mobile optimization, and a clear call-to-action.
If you’re promoting a specific product, send users to that product page and not your full catalog. If you’re offering a bundle or a seasonal deal, create a dedicated landing page with copy, visuals, and layout tailored to that offer.
Remove distractions. Reduce friction. Make it stupid-easy for people to buy. The less effort it takes, the more sales you’ll see. And don’t forget to A/B test. Sometimes a simple tweak to your headline or CTA can double your conversion rate overnight.
Once your ads are live, your job isn’t done. In fact, this is where it really begins. You need to monitor performance regularly, looking at more than just the surface-level metrics.
Click-through rate (CTR) tells you how well your ad is capturing attention. Conversion rate shows how well your landing page is sealing the deal. ROAS tells you how profitable your campaign is. And CPA helps you compare efficiency across different products or audiences.
Watch for early indicators of success – or failure.
Treat your campaigns like living systems. Tweak, test, and improve them continuously.
Once you find a winning combination – an ad, offer, and audience that works – it’s time to scale. Increase your budget gradually while keeping an eye on performance. Scaling too fast can tank your results, so go step by step.
Duplicate high-performing campaigns to test new audiences or creatives. Experiment with upsells, bundles, or time-limited offers to increase AOV. Layer in email or SMS marketing to retarget paid traffic and drive repeat sales.
And just as importantly, don’t be afraid to kill underperforming ads. If something isn’t working after a reasonable test period, cut it. Your budget should be flowing to what works – not what you hope will work.
One of the biggest mistakes in paid advertising is chasing one-off sales without thinking about the bigger picture. Winning e-commerce brands think in terms of customer lifetime value.
If your first sale breaks even, that’s fine. (As long as you have a plan to turn that customer into a repeat buyer. ) You can use post-purchase emails, loyalty programs, and retargeting ads to bring people back.
At the end of the day, when you view paid ads as the beginning of a customer relationship – not the end – you unlock real long-term profitability. And at PPC.co, that’s where we want to help you! We offer industry-leading PPC management services for ecommerce and retail brands who want to stop wasting ad spend and start generating real ROI.
Contact us today to learn more!
