Hiring a Google Ads agency can be a great way to optimize your campaigns and drive more conversions. But how do you know if your agency is actually performing well and delivering results? Evaluating an agency’s performance takes more than just looking at your monthly ad spend – you need to dig into the details to determine if they’re truly driving growth for your business.
In this comprehensive guide, I’ll walk you through the key metrics and KPIs to analyze when assessing your Google Ads agency’s performance. We’ll cover campaign structure, quality score, conversion tracking, ROI analysis, and more. With the right approach, you can regularly review your agency’s work to ensure they’re delivering the results you expect.
Set Clear Goals and Expectations Upfront
Before diving into performance metrics, it’s critical to align on goals and expectations with your agency. What does success look like for your campaigns? Do you want to drive more leads, phone calls, or site conversions? How much growth are you aiming for each month or quarter?
Make sure your agency understands your objectives, ideal customer profiles, and target CPA/ROAS. This gives them a North Star to optimize towards. Track progress against the goals regularly to keep your agency accountable.
Some key performance indicators (KPIs) to define upfront:
- Target cost per acquisition or return on ad spend
- Growth goals for conversions, revenue, etc.
- Target cost per lead or call
- Geographic and demographic targets
- Expected impact on overall sales funnel
With clear goals defined, you can better analyze performance on the metrics that matter most to your business.
Review Account Structure and Implementation
Before evaluating campaign performance, it’s important to audit the high-level structure and implementation set up by your agency. A solid foundation is critical for driving optimal results.
- Is billing/payment information correct? Double check that the correct credit card is on file and billing settings are established correctly.
- Are campaigns properly separated? Best practice is to separate brand, non-brand, and remarketing campaigns. This allows for better organization and optimization .
- Are there redundancies or inefficiencies? Review campaign settings for duplication. For example, overlapping audiences or unnecessary ad groups.
- Is location targeting correct? Verify geographic settings match your business locations and target markets.
- Are campaigns aligned to goals? Structure should allow measurement against your defined KPIs.
- Is conversion tracking set up properly? Confirm goals, lead forms, and ecommerce tracking are implemented correctly.
- Is UTMs tracking in place? Parameters should be added for traffic source, medium, campaign, etc.
- Is Google Analytics linked? Accounts and properties should be connected to enable deeper analysis.
- Are offline conversions being measured? If applicable, work with your agency to implement offline conversion tracking.
Getting the fundamentals right in your account is critical. Before analyzing campaign metrics, validate proper setup and tracking to ensure you’re getting accurate data.
Monitor Campaign Quality Score
Google uses a quality score (QS) system to assess the quality and expected performance of ads and keywords. The specific 1-10 score is based on:
- Landing page experience – Does your site offer a smooth, relevant experience?
- Ad relevance – How closely do ads match the user’s query and intent?
- Expected CTR – How likely is a user to click on your ad for a given term?
Higher quality scores can improve ad rank and decrease your costs. As a rule of thumb, aim for an account-level average QS of at least 7/10.
Red flags include:
- QS averages below 6
- High impression share but low CTR
- Sudden unexplained drops in QS or rank
Troubleshoot any major declines with your agency right away. Potential fixes include updating underperforming keywords/ads, optimizing landing pages, or adding more closely related keywords.
Monitoring changes in quality score helps assess if your agency is properly optimizing relevance over time.
Analyze Conversion Tracking
Setting up accurate conversion tracking is crucial for understanding the ROI of your campaigns. Work with your agency to implement tracking for your most important goals:
- Phone calls
- Email signups
With conversion tracking in place, regularly analyze:
- Conversion rates – What % of clicks drive conversions? Is this improving over time?
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- Cost per conversion – Are conversion costs in line with targets and improving month-over-month? Lower CPAs indicate greater efficiency.
- Conversion lag – How long from click to conversion? Shorter is better to optimize towards fast converters.
- Assisted conversions – What % of sales/leads are influenced by ads? Analyze pathing to estimate assisted conversions.
- Offline conversion import – If tracking offline goals like phone calls, ensure data is being properly imported.
Monitoring conversion metrics tells you how effectively your agency is generating the results you care most about. Prioritize optimizing towards lower CPAs and higher conversion rates.
Calculate Return on Ad Spend
Return on ad spend (ROAS) measures the revenue generated per dollar of ad spend. It’s a key metric for assessing overall profitability.
To calculate ROAS:
`(Revenue from conversions) / (Total ad spend)`
For example, if you gained $5,000 in revenue from sales with $1,000 in ad spend, your ROAS would be 5X.
Benchmark targets vary by industry, but aim for ROAS of at least 2-3X over the long run. If ROAS dips below 1X for multiple months, your campaigns are likely unprofitable.
- By campaign, ad group, keyword, etc to find top performers
- Over time to track growth/declines
- Against your target and industry benchmarks
ROAS directly measures how profitable your ad spend is. Keep a close eye on this metric and work with your agency if you see sustained drops.
Set Optimization Benchmarks
With a solid understanding of performance, work with your agency to define incremental benchmarks for optimization.
For example, you could aim to:
- Improve overall conversion rate by 10% quarter-over-quarter
- Decrease cost per lead by 15% month-over-month
- Increase impressions by 20% in key regions
- Drive 100 more conversions from enhanced landing pages
Whatever goals you set, they should tie directly back to your overall KPIs. Consistent incremental improvements add up over time into major impact.
Make sure your agency shares a detailed optimization plan to hit the benchmarks. Track progress closely to keep them accountable. If targets are missed without good reason, escalate immediately.
Audit Ad Copy Relevance
Your ads themselves are a crucial part of performance. If ad copy is off-target or poorly written, it will hurt CTR and conversions no matter how optimized other factors are.
Regularly conduct ad audits to ensure:
- Ads match keywords – Does the copy directly relate to the term it’s triggered by?
- Key benefits highlighted – Do ads communicate your core value prop and differentiators?
- Good call-to-action – Do they include a compelling CTA that drives clicks?
- A/B testing – Are new versions being tested against the originals?
- Ad extensions utilized – Are sitelinks, callouts, etc. added to boost CTR?
- Keyword insertion – Where relevant, is the keyword inserted dynamically?
- Compelling offers – Do ads promote special offers, promotions and deals?
Ads are your first impression – make sure they make a strong one. Collaborate with your agency to continuously refine copy and layout.
Managing a Google Ads agency requires more than setting it and forgetting it. To ensure you get the most value from your investment, you need to monitor performance closely across all key dimensions.
By regularly analyzing campaign structure, quality score, conversion metrics, ROI, reports, and ad copy, you can identify opportunities for ongoing optimization. Don’t be afraid to give your agency direct feedback on areas for improvement.
Set clear benchmarks and expectations around the results you want to achieve. Review progress every month and quarter. If you see sustained underperformance across critical KPIs, don’t hesitate to make changes or find a new partner.