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What are Impressions, Clicks, and Conversions?

These are three common terms we hear when talking about Google Ads. In this article, I am going to talk about these and some other essential terms you will want to know about.

Impressions

This is where it all starts when you’re running Google ads.

An impression is someone who sees your ad. 

The number of impressions is the number of times that your ad was actually ‘shown’ to people. 

Take note, this does not mean they looked at it, or even noticed it. It simply means the ad truly appeared on their screen. Whether it was clicked on or remembered is not measured by impressions. 

Somewhat related to impressions is a metric called CPM, which means cost-per-thousand impressions. Sometimes you’ll see that in a display campaign. You can actually bid based on this metric. Instead of bidding per click, you can bid per thousand impressions.

Note: About “CPM”. The Roman numeral for 1000 is “M”. Hence, the abbreviation CPM.

Clicks

If impressions are number of times people ‘saw’ your ad, clicks are the number of times people clicked on your ad. Sometimes clicks show up in Google ads in the “Interactions” column.

Depending on the type of campaign you’re running, there may be different metrics that show up in the interactions column.

Typically for a search campaign, the interaction is going to be a CLICK. You will also find information like this within the column, such as which of these interactions were clicks. 

But there are other sorts of interactions.

In other campaigns (example: YouTube Ads campaign), an interaction might be a VIEW. 

In YouTube, a view is when somebody watches 30 seconds or more of an in-stream video ad. Also in YouTube, an interaction might be an ENGAGEMENT. For a YouTube ad to count as an engagement, someone has to watch 10 seconds or more of the video. If the video ad popped up and was skipped, that does not count as a view or an engagement, but it does count as an impression.

With YouTube ads, you are only charged for a VIEW if somebody watches at least 30 seconds of your video ad. The engagement metric is mostly just something that YouTube might use to optimize a campaign for you. But you are not charged for engagements just because someone watches for 10 seconds of your video.

When someone sees your ad on a search network, Google counts it as an impression. The same goes for YouTube. If someone sees your ad at all on YouTube, that also counts as an impression.

Clickthrough Rate (CTR)

The CTR also shows up in a column referring to interactions. This will be your interaction rate.

  • clicks = interaction
  • clickthrough rate = interaction rate

What CTR specifies is the percentage of the impressions that led to a click out of all the impressions that your ad got. So if your ad had 100 impressions, and 10 clicks, your CTR is 10%.

Average Cost per Interaction

If we’re talking about clicks, that’s the average Cost Per Click (CPC). That means, if you had ten clicks , and your average CPC is $1.00, that means you would spend $10.00. 

But that doesn’t mean that each of those clicks costs exactly $1.00. You might have had one click that was $1.50, and another click that was $0.50, so the average between those two clicks is $1.00. 

So, it’s not an absolute cost per click, it’s just the average. Especially if you’re looking at Ad Group totals. You can look at specific search queries to see a specific cost for specific clicks.

Conversions

A Conversion is a click that is converted into an action. As you are setting up your campaign, you’ll be setting up Conversion Tracking. A Conversion could be a lot of different things depending on how you set this up and depending on what you want to track. Some common thing that you’d want to track as a Conversion would be 

  • Phone call – people contacting your company 
  • Opt-in form submission – lead generation, email collection
  • Purchase – if somebody buys your product from your website

If someone visited your website more than once, you can also set that up as a conversion. If someone is on a particular page for a certain amount of time, you can also consider and count that as a conversion. Just a reminder, do this very sparingly. There will always be a better type of conversion that you can track in a campaign.

Conversion Rate

This is the percentage of conversions out of all the clicks you’ve had. If you’ve had 100 clicks with 10 conversions, your conversion rate is 10%.

Cost per Conversion

Here, we are not just taking the total cost that we spent on all those clicks, we’re looking at how many conversions that we got out of the amount that we’ve spent, and divide it into that. If you’ve spent $100.00, and you had 10 conversions, your average cost per conversion is $10.00

Conversion Value

This is actually a better metric to pay attention to rather than conversions. We can set different values for different conversions. 

Here, we’re actually assigning a dollar amount to the conversion. We could assign this as a value per conversion. For example, I can set up a value for a Phone Call for $50.00. Then when this data is showing up in my campaign, that $50.00 value is going to be added every time a phone call comes in.

It’s not perfect. We don’t know the actual value of every phone call, but it’s better than simply looking at the number of conversions.

Some businesses might value an Opt-in form submission more than a phone call. Now when you’re looking at the data in your campaign, and you’re looking at the conversion value data, it’s weighed appropriately. So if you’re getting more people filling out a form from a particular subset of your campaign, you know that would be good to focus on because your Return On Ad Spend (ROAS) is much higher.

If you have an eCommerce site where people are purchasing, there are ways to set that up so it does show the value of those purchases. When someone completes a checkout, the shopping cart total gets reported back to Google Ads, and that actual conversion value is going to show up in your statistics. That’s a very powerful way to track conversion value.

Return on Ad Spend (ROAS)

If we spent $100.00, and we sold $500.00 in product, our ROAS is 500%. Ultimately, the things to pay attention to are: 

  • How much are we spending on ads? 
  • How much are we getting back?

When doing that, you need to pay attention to Gross Sales vs. Net Sales. If your profit margins are small, maybe you have a lot of gross conversion value, but the margins are too small. You could be losing a lot of money in a campaign even if it looks like the ROAS is high.

As a business owner or a marketing professional, you need to take all of that into account. Pay attention to all of those metrics and it will pay off!