Search engine advertising (SEA) plays a central role in almost any successful marketing strategy. In order for you to measure the success of your campaigns, we present the eight most important SEA key figures. Which KPI do you use in the SEA analysis?
Definition: What is SEA?
SEA is the abbreviation for the English term pbow Eengine ONEdvertising and translated means search engine advertising. These are all types of paid ads in search engines like Google.
For many search queries on Google, the paid search engine advertising marked as an ad appears before the organic search results, which can be improved due to good SEO work.
Why is SEA relevant to marketing managers?
With well over two billion users, Google is by far the largest search engine and at the same time the most important digital platform in the world. According to Statista, there were over 85 billion (!) hits on Google.com in May 2022 alone.
So if you want to be found by people, search engine advertising is a powerful marketing tool that should be part of most online marketing campaigns.
KPI: These are the 8 most important SEA key figures
However, in order to run really successful search engine advertising, it is important to analyze the data correctly. It is important to know and calculate SEA KPIs.
To ensure your foray into the world of paid search advertising goes smoothly, we present eight key SEA metrics, including definitions and calculations.
1. Click-through rate (CTR)
The click-through rate describes the number of people who have seen an ad on Google and clicked on it.
CTR is calculated using the following formula:
- Number of clicks (100) / number of impressions (1,000) = CTR (10.0 percent)
2. Price per clicks (CPC)
Price per clicks is the second of the SEA metrics that you should definitely know. CPC describes the average cost of a click on your ad.
CPC is calculated using the following formula:
- Price in currency (100 euros) / number of clicks (1,000) = CPC (0.1 euros)
3. Conversion Rate (CVR)
The third SEA KPI from the standard search engine marketing repertoire is the conversion rate – CVR for short. The CVR relates the number of conversions to the number of clicks.
CVR is calculated using the following formula:
- Number of conversions (100) / number of clicks (1,000) = CVR (10 percent)
4. Price per order (CPO)
The next key SEA term is the so-called price per order. This metric is how expensive it is to close a sale, order or lead.
CPO is calculated using the following formula:
- Cost ($1,000) / Conversions (100) = CPO ($10)
5. Turnover per click
In particular, store operators and companies from the e-commerce sector want to know how much money they have earned by clicking on an SEA ad. The right key figure for this is the so-called turnover per click.
The turnover per clicks are calculated using the following formula:
- Generated revenue (100 euros) / number of clicks (20) = revenue per click (5 euros)
6. Return on Ad Spend (ROAS)
ROAS is definitely one of the most important and well-known KPIs in the SEA area. It ultimately describes how much money a campaign has brought in. For this purpose, the costs of the campaign are set in relation to the turnover. A ROAS of over 100 percent is therefore positive.
ROAS is calculated using the following formula:
- (Revenue ($100) / Cost ($10)) * 100 = ROAS percentage (1,000 percent)
7. Cost/sales ratio (KUR)
Another key figure in search engine advertising is KUR. KUR is the abbreviation for cost-sales ratio and – you guessed it – puts advertising costs in relation to the sales generated.
KUR is calculated using the following formula:
- (Costs (100 euros) / sales (1,000 euros)) * 100 = CUR in percentage (10 percent)
8. Average cart value
The final SEA KPI that every online marketing manager should be familiar with is average cart value. This means: How much revenue or money does the average user generate when shopping in the online store?
The average cart value is calculated using the following formula:
- Sales (1,000 euros) / number of conversions (100) = average shopping cart value (10 euros)
Of course, the key figures, terms and KPIs mentioned and presented represent only a basic set of calculation and analysis options in search engine advertising.
It is of central importance for every SEA manager and online marketing manager to tailor the existing measurement methods to their own needs and requirements.
Concretely, this means that if you do not run an online store, you do not have to deal with the average shopping cart value. Therefore, everyone responsible should collect their own key SEA key figures in an Excel sheet and check them regularly.