Which KPI is typically used to measure the cost efficiency of paid search campaigns?

Which KPI is typically used to measure the cost efficiency of paid search campaigns?

• A. Brand searches
• B. Conversion traffic
• C. Awareness
• D. Cost per conversion

Answer: (D)

In paid search, measuring cost efficiency means linking how much you spend to the specific action you want users to take. The KPI that does this best is cost per conversion, which equals total spend divided by the number of conversions. It reveals the average cost to achieve a conversion, letting you compare campaigns, ad groups, or keywords on how efficiently they turn spend into results. For example, spending $2,000 to generate 80 conversions gives a cost per conversion of $25, helping you judge whether a campaign is more cost-efficient than another. Brand searches focus on interest in your brand and aren’t about cost efficiency. Conversion traffic tells you how much converting traffic you have, not how much you spend per conversion. Awareness measures how many people know about your brand, again not tied to spending per result.

In paid search, measuring cost efficiency means linking how much you spend to the specific action you want users to take. The KPI that does this best is cost per conversion, which equals total spend divided by the number of conversions. It reveals the average cost to achieve a conversion, letting you compare campaigns, ad groups, or keywords on how efficiently they turn spend into results. For example, spending $2,000 to generate 80 conversions gives a cost per conversion of $25, helping you judge whether a campaign is more cost-efficient than another.

Brand searches focus on interest in your brand and aren’t about cost efficiency. Conversion traffic tells you how much converting traffic you have, not how much you spend per conversion. Awareness measures how many people know about your brand, again not tied to spending per result.