Measure Your SEM Success with Metrics (and Math)
How do I know if my SEM campaign is working?
What are 3 common SEM goals?
What metrics do I use to track those goals?
You’ve chosen your keywords, you’ve created compelling online ads...now it’s time to bask in the glory of search engine marketing (SEM) success. Or is it?
To figure out if your SEM campaign is bringing in customers and making you more money, you need to set a clear goal and use key metrics to track that goal.
Your goal depends on your business needs, but 3 common ones are generating leads, driving purchases, and creating brand awareness.
Chances are, you’re familiar with all of those, but let’s do a little refresher.
You may want to achieve all 3 of those SEM goals, but you should focus on 1 main goal and use 1 key metric to track it.
For lead generation, you should track cost per lead, or CPL. Purchases can be measured with return on ad spend, or ROAS.
There isn’t 1 perfect metric to measure brand awareness, but you can track reach, frequency, or impact. We’ll focus on reach. To measure it, track how many unique visitors clicked on your SEM ads and landed on your website.
LISTEN UP
Measuring leads and purchases come with their very own math formulas. (Try and contain your excitement.)
Never fear...we’ll show you how to do the calculations.
Let’s start with generating leads and its metric CPL.
Imagine that Connor’s Karaoke wants to generate leads by having site visitors complete an online inquiry form. This is how he can measure how well his SEM campaign reached that goal: money spent on ads ÷ number of leads = CPL.
Now plug in these numbers: Connor spent $5,000 on his SEM campaign. His ads got 10,000 views. From those, 500 people clicked on his ads and visited his site. Of those 500 visitors, 50 did the inquiry form (AKA became leads).
With that information, the formula for calculating CPL looks like this: $5,000 (money spent on ads) ÷ 50 (number of leads) = $100 (CPL).
Connor had previously determined that a lead is worth about $150 to him. At $100, his CPL is lower than that. So he knows the return on investment of his SEM campaign is positive.
Connor can also use the same formula to get the CPL for each of his SEM keywords. He’d then boost his spending on keywords that have a CPL below or equal to his $150 lead value, which will help him capture more leads.
Now let’s look at driving purchases as a goal and how to track ROAS.
Dylan’s Designer T-shirts wants to increase revenue by selling more shirts online. To measure his SEM success, Dylan uses this formula: revenue ÷ money spent on ads x 100 = ROAS %.
Here are his numbers: He spent $1,000 on his SEM campaign and got 5,000 views on his ads. 100 people clicked on his ad and visited his site. From those visitors, 20 people bought a designer T-shirt. His total revenue from those sales was $1,600.
His formula for calculating ROAS would be: $1,600 (revenue) ÷ $1,000 (money spent on ads) x 100 = 160% (ROAS %) – which is a pretty good percentage.
Like Connor, Dylan can use his formula to measure his individual keywords. He can spend more on those with a higher ROAS percentage and less on those with a lower ROAS percentage.
Finally, let’s look at brand awareness and measuring how many unique visitors are clicking on your SEM campaign and landing on your website.
Arlene wants to drive more visits to her website so more people will know about her art gallery. Unlike Connor and Dylan, she can skip math equations and use tools like Google Analytics or Adobe Analytics to measure her success.
With those tools, she can track how many of her unique site visitors came from her SEM campaign specifically.
She can also check the click-through rate for specific keywords. This helps her figure out which keywords are better at driving people to her site and raising her brand awareness, and are therefore worth bidding more on.
DO THIS NOW
Now that you’ve seen how to track metrics for 3 common SEM goals, let’s figure out which goal might be best for your business.
If you’re participating in the course, go to the next section to access your self assessment.
KEY TAKEAWAYS
To measure your SEM success, pick 1 goal and the right metric to track it.
The most common SEM goals are generating leads, driving purchases, and creating brand awareness.
Track CPL for lead generation, ROAS for driving purchases, and click-through rate for specific keywords to see which are better at driving people to your site.