Ever stared at a PPC report and felt like you were reading another language?
All those acronyms—CPC, CTR, ROAS—can make your eyes glaze over. But when you understand what they mean (and what to do with them), you can turn a wall of numbers into a roadmap for growth.
This PPC glossary isn’t just about definitions. It’s about showing you:
- Which Google paid search metrics matter for each stage of the journey.
- How to use them to improve your pay-per-click campaign performance.
- What actions to take to turn data into real business results.
Top-of-Funnel Metrics — Measuring Awareness
These metrics tell you how many people you’re reaching and how visible your brand is in a Google Ads or other paid search campaign.
Impressions
Definition: The number of times your ad was shown on a screen in a Google paid search or display campaign.
Why it matters: This is your core “reach” metric. It shows the size of the audience that has been exposed to your ad.
Action tips:
- To increase your impressions, consider increasing your budget.
- Broaden your location and interest targeting, or your keyword list (with caution).
Impression Share (IS)
Definition: The percentage of times your ads were shown compared to the total number of times they could have been shown.
Calculation: IS = (Your Impressions ÷ Total Eligible Impressions) × 100
Why it matters: This shows if you’re losing out on visibility to competitors. A 60% IS means you’re missing 40% of your potential audience.
Action tips:
- If lost due to budget, increase your daily campaign spend.
- If lost due to rank, work on improving your Ad Rank and Quality Score.
Frequency
Definition: The average number of times a single person has seen your ad.
Calculation: Frequency = (Total Impressions ÷ Unique Users Reached)
Why it matters: Too low, and your message won’t sink in. Too high, and you risk annoying your audience with “ad fatigue.”
Action tips:
- On Display and Social platforms, set a frequency cap (e.g., 3 views per person per week) to prevent oversaturation.
Middle-of-Funnel Metrics — Measuring Engagement
These metrics show whether people are interacting with your ads and finding them relevant.
Clicks
Definition: The number of times your ad got clicked on, directing someone to your website.
Why it matters: This is the first step toward a conversion. It shows your ad was compelling enough to provoke action.
Action tips:
- Track which ads and keywords drive the most clicks to see what resonates.
- Pair this metric with conversions to ensure clicks are turning into business.
Click-Through Rate (CTR)
Definition: The percentage of people who saw your ad (impressions) and then clicked on it. A 5% CTR means 5 out of every 100 people who saw your ad clicked it.
Calculation: CTR = (Clicks ÷ Impressions) × 100
Why it matters: It’s a key sign of your ad’s relevance. A high CTR boosts your Quality Score, which can lead to lower costs.
Action tips:
- Ensure your main keyword is in your ad’s headline.
- Use compelling, action-oriented language (e.g., “Get a Free Quote”).
- Add ad extensions to make your ad bigger and more informative.
Cost Per Click (CPC)
Definition: The average amount you paid for a single click on your ad.
Calculation: CPC = (Total Cost ÷ Total Clicks)
Why it matters: This measures cost efficiency. The goal is to get the most valuable clicks for the lowest possible cost.
Action tips:
- The best way to lower CPC is by improving your Quality Score.
- Pause expensive keywords that aren’t leading to conversions.
Bottom-of-Funnel Metrics — Measuring Action
These are the “money” metrics. They tell you if your ad spend is generating actual business results like leads and sales.
Conversion
Definition: When a user completes a desired action after clicking your ad (e.g., making a purchase, filling out a form, making a call).
Why it matters: This is the ultimate goal of bottom-of-the-funnel PPC campaigns. It’s the direct link between your advertising and your business growth.
Action tips:
- Ensure conversion tracking is set up correctly—you can’t optimize what you don’t measure.
- Define different conversion actions to track both primary (sales) and secondary (newsletter sign-ups) goals.
Conversion Rate (CVR)
Definition: The percentage of clicks that resulted in a conversion.
Calculation: CVR = (Conversions ÷ Clicks) × 100
Why it matters: This shows how effective your website or landing page is at turning visitors into customers or leads.
Action tips:
- Improve your landing page: ensure it’s fast, mobile-friendly, and has a clear call-to-action.
- Make sure the message on your landing page matches the promise in your ad.
Cost Per Lead (CPL)
Definition: The average cost to generate one lead (e.g., a form submission or a phone call).
Calculation: CPL = (Total Cost ÷ Total Leads)
Why it matters: Essential for service-based businesses. It answers: “How much am I paying for each new prospect?”
Action tips:
- Compare your CPL to the average lifetime value of a customer to ensure profitability.
- Optimize your campaigns to pause high-cost, low-quality lead sources.
Cost Per Acquisition (CPA)
Definition: Similar to CPL, but more broadly refers to the cost to acquire a customer or any single conversion. Often used for sales.
Calculation: CPA = (Total Cost ÷ Total Conversions)
Why it matters: This is your “cost per sale.” It’s the core efficiency metric for measuring if your campaigns are profitable.
Action tips:
- To lower CPA, focus on improving your Conversion Rate and Quality Score.
Return On Ad Spend (ROAS)
Definition: The total revenue generated for every dollar spent on advertising.
Calculation: ROAS = (Total Revenue from Ads ÷ Total Ad Cost)
Why it matters: This is the ultimate profitability metric for e-commerce. A 3:1 ROAS means you earned $3 for every $1 you spent.
Action tips:
- Focus budget and bids on the campaigns, products, and keywords that drive the highest ROAS.
- Use a “Target ROAS” bidding strategy to automate for profitability.
View-Through Conversion (VTC)
Definition: When a customer sees your ad (but doesn’t click it), and then later converts on your website through another channel.
Why it matters: It shows the impact of your Display, YouTube, and social media ads that build awareness, even if they don’t get the final click.
Action tips:
- Include this metric when evaluating the success of awareness campaigns.
- Use it to understand the full customer journey and the “assist” role your ads play.
Core Concepts You'll See Everywhere
Ad Rank & Quality Score
Definition: Quality Score (1-10) is Google’s rating of your ad’s relevance. Ad Rank determines your ad’s position and is calculated by (Your Bid × Your Quality Score).
Why it matters: A high Quality Score is the key to success. It allows you to win higher ad positions for a lower cost than competitors with low scores.
Action tips:
- Improve ad relevance by matching ad copy to your keywords.
- Boost CTR by writing compelling ads with clear calls-to-action.
- Enhance the landing page experience with fast load times and relevant content.
Attribution Model
Definition: The method for deciding which ad gets credit for a sale or lead, especially when a customer sees or clicks on multiple ads before converting.
Why it matters: A “Last-Click” model gives 100% of the credit to the final ad clicked, ignoring all previous touches. A “Data-Driven” model distributes credit across multiple ads that influenced the sale.
Action tips:
- Switch from “Last-Click” to “Data-Driven” attribution in your ad account to get a more accurate picture of what’s working.
- Use this insight to value your awareness (TOFU) properly and consideration (MOFU) campaigns.
From Decoding to Doing
Now that you can decode your PPC report, you can see the story it tells about your campaigns. You know what the numbers mean and have a checklist of actions to improve them.
When your agency discusses strategy with you or presents you with a report, this will help you interpret it to make knowledgeable decisions about your marketing and the money you put into it.
But knowing what to do and having the time and expertise to do it are two different things. If you’re ready to turn these insights into a powerful, profitable strategy, our team is here to help.
Ready to stop just reading reports and start improving the right numbers inside them? Speak to a consultant at Fahrenheit Marketing today, and let’s build a campaign that speaks the language of results.