B2B PPC – Key Metrics to Focus On - Move Forward Strategies

Today's post is an excerpt from The MFS Guide to B2B PPC - A Strategic Approach to B2B PPC.

The danger with PPC metrics is that there are so many data points available to you, possibly spread across multiple platforms, that it is very easy to lose focus on what ultimately matters - namely revenue. It is our contention that there are two key principles to keep in mind regarding B2B PPC metrics.

Maintain a Revenue Focus - The more in-depth metrics around impressions, click throughs, etc. are important and will help you optimize your campaigns - but they are only important when considered in the correct revenue context. For example, if you are spending time working on a way to increase impressions on a PPC campaign that is breaking down further along your sales process - you will not generate any extra revenue by increasing impressions. Alternatively, if you have a campaign that is resulting in a good number of closed won opportunities, then improving impressions and clicks can generate an increase in revenue.
Create a Unified View - Presenting PPC metrics in isolation is a very quick way to lose the attention of the C-suite. If - as is the case in many companies - you are running PPC campaigns across multiple channels, you should be looking to set up metrics that measure and present all PPC campaigns in a single dashboard. You should also have the lower level metrics that measure cost per click etc., ROI, etc. from each platform - but, when presenting and measuring your PPC progress, stick to the initial high level and unified PPC metrics - and, in particular - revenue-related metrics.

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B2B PPC - Types of Metrics

Broadly speaking, there are two types of metrics to consider as your set up your B2B PPC dashboard:

B2B PPC Business Metrics - These are the higher level PPC metrics that specifically relate to business performance.
B2B PPC Program Metrics and KPIs - These are the metrics that are specifically tied to the performance of the company’s PPC program. Honing these lower level and more in-depth metrics can lead to improvements in the higher level PPC business performance metrics.

B2B PPC - Business Metrics

Return on Ad Spend (ROAS) - ROAS is your fundamental B2B PPC metrics and is a very simple but important metric that shows you the return you are getting on every $1 spend on PPC. The calculation is total ad revenue / total ad cost. Any ROAS greater than 1:1 means your PPC program is returning a profit. For more in-depth analysis, you can compare your ROAS with other marketing channels like email marketing, SEO, etc. to see how valuable a channel PPC is for your company. You can also break down your ROAS by each digital PPC channel to see if certain channels are working better than others.

PPC Customer Acquisition Cost (CAC) - PPC CAC divides the total amount of money spent on PPC by the number of sales aka acquisitions. The formula is straightforward: Total Campaign Cost / Number of Acquisitions = CAC. Again, this metric is valuable in that it will help you analyze the success of your PPC program and how it compares to other marketing initiatives.

PPC Average Deal Size - Track how PPC average deal size compares with other channels with this metric. Formula = Total value of all PPC closed won deals divided by number of closed PPC deals.

PPC Win Rate - The percentage of PPC opportunities that you successfully convert into paying customers. This is calculated by dividing the number of won deals by the total number of opportunities coming from your PPC program.

PPC Sales Cycle Length - Track how long it takes PPC customers to move through your sales pipeline: Total Days to Close All Deals / Total Number of Closed Deals.

PPC Customer Acquisition Cost (CAC) Payback Period - This metric will help you track how many months it takes to recover your PPC costs. The formula involves the PPC CAC which we showed how to calculate above and monthly gross profit per customer which is calculated with the following formula: Monthly Gross Profit Per Customer = Monthly Revenue Per Customer - Monthly Variable Costs. The CAC payback period can then be calculated with the following formula CAC Payback Period = CAC / Monthly Gross Profit Per Customer. This metric will give you some insight into company cashflow and how your PPC program is impacting it.

PPC Customer Lifetime Value (LTV) - This metric is calculated by multiplying the average revenue per account that comes from your PPC program by your average PPC customer lifespan.

B2B PPC - Program Metrics and KPIs

CPC (Cost Per Click) - How much you pay, on average, each time someone clicks your ad. This metric will vary per digital channel but will help you gauge performance and is something to work on lowering it as you iterate and test your various ads. The formula for CPC is Total Spend ÷ Total Clicks

Cost per 1,000 Impressions or cost per mile (CPM) - CPM shows how much it costs for every 1,000 times your ad is shown. The formula for CPM is (Total Spend ÷ Total Impressions) × 1,000. Your CPM will give you some insight into the success of your ad headlines, copy, and images.

Ad Relevance / Keyword Quality Score - This metric is one offered by certain digital platforms and is worth tracking as you iterate on your ads. Examples here are Google who provides a keyword Quality Score out of 10 and Facebook’s ad relevance diagnostics.

Website Metrics from PPC Visits - The goal of many PPC ads is to bring prospects back to the company website. As a result, it is important to track website performance as part of your PPC metrics. In particular, you want to focus on the segment of web traffic that PPC is directly responsible for and how it compares to other traffic sources. The metrics to track here are:

Bounce Rate = (Single-page sessions ÷ Total sessions) × 100
Avg. Time on Site = Total time on site ÷ Total sessions
Pages per Session = Total pageviews ÷ Total sessions
Conversion Rate = (Conversions ÷ PPC sessions) × 10

This post is an excerpt from the MFS Guide to B2B PPC: A Strategic Approach to B2B PPC. If you would like to read more you can access the guide in full here. If you have a marketing challenge you are looking for support with, feel free to reach out today - we’d love to talk with you about what you’re trying to achieve with your B2B marketing and how we might be able to help.