In pay per click circles there is a lot of talk about click through rates, cost per clicks, quality scores, and a host of other criteria that are nice to measure, but in reality the only real metric that matters is conversion data. Specifically, you want to know your total conversions and your conversion rate. These are the metrics that will make you your money and determine your ROI.
It’s OK to have a low CTR. It’s OK to have a high average CPC. What really matters is how many conversions you get and whether that is making you money. But even if you are converting large numbers of your traffic, you could be losing money on your pay per click campaign. That’s because you’ve likely bid your keywords too high.
If you bid too high on your keywords then it doesn’t matter how many conversions you have. You will lose money. Even if all the other metrics meet your satisfaction. Lower those keyword bids and see what happens to conversions. Sometimes they go up, sometimes they go down. But what you really want to see is a return on your investment – a measurement between how much you are spending on your pay per click campaign and how much it is earning you in return. That last part of the equation is wholly dependent on conversions. And that’s why it is the only real metric that matters.