Revenue Per Click: The Forgotten Metric
January 16th, 2009 by Joe Teixeira
Tags: click-revenue, cpc-revenue, paid-revenue, ppc-revenue, revenue-click, revenue-per-click, rpc
I am one of the few people who really appreciate the Revenue Per Click metric for paid (cpc) keywords and ads. In fact, I heart it. I may even carve the Tree of Luv with “RPC + JT” for Valentine’s Day. 🙂
So, what is this Revenue Per Click metric that makes my heart flutter? It’s simply the average revenue for each individual click on all of your pay-per-click keywords and ads. When your Google Analytics account is synced with your Google AdWords account – and “Destination URL Auto-Tagging” and “Cost Data” are enabled – the AdWords sub-section of reports within the Traffic Sources section becomes enabled. Within that first “AdWords Campaigns” report, you should see a new 4th tab in the main report area, named “Clicks”. This is an import of all of your top-level Google AdWords data, just as it appears in the AdWords interface.
Because Google Analytics is so awesome, the good engineers at Google have thrown in three metrics in the top row of metrics on the report table that are not available in AdWords. These are ROI (Return on Investment), Margin (which is Goal Value + Ecommerce Value, minus Cost, divided by Revenue; which I also really like), and my favorite of the three, Revenue Per Click.
Revenue Per Click in Google Analytics
As our loyal readers and subscribers to our blog will tell you, I am not a big fan of taking actions, or even thinking about taking actions, based upon the results of one metric or one statistic, with Bounce Rate being the only exception to this rule. Knowing this, you may be thinking “well, if that’s the case, how can Revenue Per Click help me?”
I like RPC in contrast to Average Cost-Per-Click, or CPC. Since you can do this in Google Analytics at the Campaign, Ad Group, or Keyword levels, you can very easily compare the two metrics side-by-side, and quickly determine the ratio of money spent (CPC) vs. money earned (RPC). This will allow you to quickly discover which Campaigns, Ad Groups, or Keywords are responsible for your (hopefully) high profit margin, or which parts of your AdWords marketing efforts need to be optimized.
For example, you may see an average CPC of $0.17 for one of your top keywords, with a click-through rate (CTR) of 9.45%. This sounds good so far, but when you look over at the RPC column, you may see $0.21, which means you are just barely breaking even in terms of profit. Having the RPC metric right there in front of you, you’ll be able to quickly glean this insight and work on figuring out why this keyword isn’t performing anywhere near as well as your other keywords (perhaps you need some landing page optimization?, use Google Website Optimizer for testing diferent proposals of landing pages).
In another example, you may see an average CPC of $0.43 for a newer, product-oriented keyword, with a good 8.89% CTR. It’s RPC is literally through the roof at a high-flying $22.48! The math is pretty simple here: on average, you make $22.48 for every $0.43 that you spend. This now becomes a very subtle call-to-action that reads: “Focus more money here right now!!!
Start using Revenue Per Click today! Log-in to your Google Analytics account, click on “Traffic Sources”, then click on “AdWords >> AdWords Campaigns”, and click on the “Clicks” tab to begin making your analysis life a bit easier from now on!