To execute a successful paid search marketing campaign, one of the most important elements needed is good data. Paid search is full of data points that search marketers use all the time to understand trends and make optimization changes. However, with so much data available it’s often hard to know which numbers to focus on. This article will discuss the five most overvalued metrics, how they’ve been misused and the best ways to look at these metrics to really understand and optimize your paid search account.  

Number 5: eCPM (effective Cost Per Thousand Impressions)

Many advertisers try to compare cost per click costs to more traditional offline advertising. Comparing offline CPM to eCPM in search leads to poor management decisions for several reasons, but primarily due to the fact that paid search impressions are FREE. So comparing a $100 eCPM Google SEM buy to a $4 CPM Advertising.com buy does not provide any value to marketing managers.

Number 4: Brand vs. Generic Breakdown

While understanding how your branded terms perform vs. your generic terms, it is important not to overvalue the impact of each individually. Instead, focus on the impact each has to one another. There are many studies, and now tools, to help understand the relationships between bidding on branded terms and both organic listings and generic keywords. A lot of clients focus on the fact that many generic terms are more expensive, and often can have a lower ROI. However, marketers need to consider the impact that the generic terms drive to the overall marketing funnel. These generic terms often serve as introducers to your brand/products. A user who searches for ‘Checking Account’ may not have a brand in mind at that time, and that search creates the consideration set. While that user may not convert on that first visit, it was that click that ultimately is responsible for the sale, even if your analytics package gives credit to the last click.

Number 3: CPC (Cost Per Click)

Certainly CPC is an important metric that is needed to better understand how to manage maximum bids at the keyword level. However, often this metric is viewed in a vacuum, which can be detrimental to optimization. A high CPC does not imply that the keyword is or is not working. The focus here should be on conversion. If a marketing program requires a ROI of 4, then it shouldn’t matter if the CPC is $0.40 or $4 as long as the revenue is $1.60 or $16, respectively.

Number 2: Average Position

Too many marketers get excited when they see their search listing in the #1 position, and this really can be a small victory. However, in the long run position is a poor metric in determining actual success. Average position should only be used to determine if there is additional opportunity to increase the share of voice for the keyword by increasing position. Average position should never be used to determine if a campaign is or is not working. The correct metric to determine success is ROI and Profit.

Number 1: Number of Keywords

This is an important note: In paid search marketing you do NOT pay by the number of keywords in your list, you pay for the clicks they receive. Therefore, each additional keyword in the list does not necessarily cost incremental dollars. The correct number of keywords is different for each campaign/product, and should be measured by the profitability of the campaign and the number of impressions received by an exact match search. A program’s keyword list should be a dynamic force increasing and decreasing in size, allowing the gathering of data to help understand consumer searching behaviors.