Google Metrics To Shoot For

Hey there, it’s Myles from Serendipityy.

In today's email I'm going to be covering:

1. The important metrics that you should be monitoring when running Google Ads.

2. Their formulas

3. How often you should be measuring them

4. A brief explanation into each.

It's an information-heavy email, that I think you will find incredibly useful.

Gross Profit

Total Revenue - COGS

Measure Monthly

This shows the total revenue after subtracting the cost of goods sold.

It tells you the immediate efforts of your marketing towards the sale of the product.

I.e. How much you can spend to acquire a new customer before the additional costs are incurred.

Gross profit is the biggest indicator of whether your business supports paid traffic.

Can your gross profit, factored in with the cost of traffic, be profitable?

It's one of the first things I will ask people on calls to figure out if Google Ads is a good idea or not.

Cost Per Click (CPC)

Total Ad spend / Number of clicks

Measure Weekly

This is a good metric to track trends inside of the application (Google) itself.

If CPCs become more expensive in-app it could be because you're acquiring more new website traffic that is more expensive. It should always be used in conjunction with other metrics to ask whether a rise/fall is a good/bad thing.

ROAS

Total Conversion Value / Total Cost

Measure Monthly

ROAS is a good in-app / in-campaign metric to look at.

It tells you how cold/warm the audience is that you're going after with that channel / campaign.

It does not tell you how profitable that campaign is at driving purchases for your brand.

That's because it is a click-attributed metric.

Meaning did they click and can Google see the return.

Very little clicks come from YouTube or Facebook video ads, therefore very little return can be identified.

So don't use ROAS to measure your advertising success on Google!!

New Site Visits

Amount Of Visitors To Your Site

Measure Daily - Using GA4

The more new visitors you have in your traffic, the more growth minded your company is.

It's difficult to scale new customers when an advertising campaign/platform is predominantly returning visitors.

So knowing the number of new visitors for a campaign/channel will tell you how effective that campaign will be for scaling.

Compare this with the number of returning website visitors to see how much re-marketing a channel is doing.

Effective Cost Per New Visitor (eCPNV)

Total cost of marketing and sales / number of new visitors

Measure Monthly

Any campaign will a mix between warm and cold traffic. The cold is much more expensive than the warm typically.

PMax will have a fair amount of warm traffic that is inexpensive.

When you're trying to scale a campaign you might see that your traffic is half warm and half cold.

If you have a $1 CPC that means your eCPNV is $2, so that campaign is twice as expensive as you think.

If I want to scale you need to know how much every $ is going to generate in new visitors to the site.

New Customer Acquisition Cost (nCAC)

Total Marketing Cost / New Customers

Measure Monthly

Most companies can only scale by acquiring new customers.

Sometimes pushing more money into a channel doesn't change the existing sales cycle of your customers.

Knowing your overall nCAC allows you to determine whether a channel has a good top-line effect of pushing new customers.

A good way to test if a channel is efficient at optimising for new customer growth is that if you start to push in ad spend to an area that you believe is more top of funnel / prospecting and it works well then you should see an increase in new customers but the nCAC should stay fairly static.

Every $ in is working well to generate a 1:1 ratio new customers.

Media Efficiency Ratio (MER)

Total Revenue / Total Marketing Expenses

Measure Quarterly

This is metric that is the best indicator of the overall health of your business as it is literally all cash in vs. all cash out.

It's good to find out if you're spending money in the right direction.

If I do X, Y, Z is the revenue coming back at the same rate?

I.e. Say you're at a MER of 5x and then you put $10,000 into a channel. If your MER drops then that channel / the strategy you used can't be scaled efficiently otherwise your MER would have stayed static.

Maybe there's other places to put it that would work better for the customer journey.

I hope I made good on my promise of this being useful. Let me know if you have further questions.

All the best,

Myles

PS. If you’re running an ecommerce brand making $30k+ a month and want a free Google Ads strategy call, ​book a time with me here »​