These are the 8 most important KPIs and terms

Search engine advertising (SEA) plays a central role in almost every successful marketing strategy. So that you can measure your campaigns successfully, 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 Sarch Eengine Advertising and translated means search engine advertising. These are all forms of paid ads within search engines like Google.

For many search queries on Google, the paid search engine advertising, which is marked as an ad, appears before the organic search results, which can be improved due to good SEO work.

Why is SEA relevant for 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. In May 2022 alone there was according to stats over 85 billion (!) hits on Google.com.

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

But in order to operate really successful search engine advertising, it is essential to analyze the data correctly. It is important to know and calculate SEA KPIs.

To ensure that your entry into the world of paid search engine advertising goes smoothly, we present eight important SEA key figures, including definitions and calculations.

1. Click-Through Rate (CTR)

The click-through rate describes the number of people who saw an ad on Google and clicked on it.

The CTR is calculated using the following formula:

• Number of clicks (100) / number of impressions (1,000) = CTR (10.0 percent)

2. Cost Per Click (CPC)

Cost-per-click is the second of the SEA metrics that you should definitely know. The CPC describes the average cost of a click on your ad.

The CPC is calculated using the following formula:

• Cost in currency (100 euros) / number of clicks (1,000) = CPC (0.1 euros)

3. Conversion Rate (CVR)

The third SEA KPI from the standard repertoire in search engine marketing is the conversion rate – CVR for short. The CVR relates the number of conversions to the number of clicks.

The CVR is calculated using the following formula:

• Number of conversions (100) / number of clicks (1,000) = CVR (10 percent)

4. Cost per order (CPO)

The next central SEA term is the so-called cost-per-order. This metric is how expensive it is to close a sale, order, or lead.

The CPO is calculated using the following formula:

• Cost ($1,000) / Conversions (100) = CPO ($10)

5. Revenue per click

In particular, shop operators and companies from the e-commerce sector want to know how much money they made by clicking on a SEA ad. The right key figure for this is the so-called revenue per click.

The revenue per click is calculated using the following formula:

• Generated revenue (100 euros) / number of clicks (20) = revenue per click (5 euros)

6. Return on Ad Spend (ROAS)

The 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 over 100 percent is accordingly positive.

The ROAS is calculated using the following formula:

• (Revenue ($100) / Costs ($10)) * 100 = ROAS percentage (1,000 percent)

7. Cost-sales ratio (KUR)

Another key figure in search engine advertising is the KUR. KUR is the abbreviation for cost-sales ratio and – you guessed it – puts the advertising costs in relation to the generated sales.

The KUR is calculated using the following formula:

• (Costs (100 euros) / sales (1,000 euros)) * 100 = KUR in percent (10 percent)

8. Average shopping cart value

The last SEA KPI that every online marketing manager should be familiar with is the average shopping cart value. That means: How much turnover or money does the average user generate when shopping in the online shop?

The average shopping cart value is calculated using the following formula:

• Sales (1,000 euros) / number of conversions (100) = average shopping cart value (10 euros)

Conclusion

Of course, the key figures, terms and KPIs mentioned and presented only represent 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.

In concrete terms, this means that if you don’t run an online shop, you don’t have to deal with the average shopping cart value. Accordingly, everyone responsible should compile their own central SEA key figures in an Excel sheet and check them regularly.

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