What metrics or KPIs do you monitor to gauge the effectiveness of your bidding strategy?

Awesome question—tracking the right metrics and KPIs is key to knowing whether your bidding strategy is actually working or just spending budget. The best mix of KPIs depends on your campaign goals, but here's a comprehensive breakdown of the ones that really matter:

🔑 Core KPIs for Bidding Strategy Effectiveness
1. Cost per Acquisition (CPA)
What it shows: How much you're paying per conversion

Why it matters: Indicates bidding efficiency—lower CPA = more cost-effective strategy

2. Return on Ad Spend (ROAS)
What it shows: Revenue generated per $1 spent

Why it matters: Critical for e-commerce and revenue-driven goals

Target example: 4:1 ROAS means $4 earned for every $1 spent

3. Conversion Rate (CVR)
What it shows: % of clicks that result in conversions

Why it matters: Helps determine if the bid is getting high-intent traffic

If CVR is low: You might be overbidding on low-quality traffic

4. Impression Share (and Lost IS Due to Rank/Budget)
What it shows: How often your ads are showing vs. eligible impressions

Why it matters: Helps measure visibility and competitive positioning

Use case: If your impression share is low due to rank, you may need to increase bids

5. Average CPC
What it shows: Cost per click over time

Why it matters: Helps determine if your bidding is becoming more or less expensive and whether your strategy is efficient

6. Click-Through Rate (CTR)
What it shows: % of impressions that result in clicks

Why it matters: Indicates ad relevance and quality—better CTRs often reduce CPCs via Quality Score (especially on Google)

7. Conversion Value / Cost
What it shows: Value returned per dollar spent (like ROAS, but can be customized)

Why it matters: Better for value-based bidding strategies

🔍 Supplementary & Strategic Metrics
8. Quality Score (Google Ads)
Affects how much you pay per click—bidding higher won't solve poor ad relevance

9. Budget Utilization
Are you maxing out daily budgets? Under-spending could be a sign of too-conservative bids

10. Share of Top / Absolute Top Impressions
Measures how often your ad shows in premium positions

Especially important if visibility or dominance is a goal (e.g., for brand terms)

11. Incremental Metrics
Incremental CPA / ROAS: How much more it costs to get the next conversion

Marginal return: Helps assess scaling potential—are more dollars getting more results?

🧠 Pro Tip: Customize KPIs by Funnel Stage

Funnel Stage   Priority KPIs
Awareness   Impressions, CTR, Cost per Click (CPC)
Consideration   CVR, Time on Site, Engaged Sessions
Conversion   CPA, ROAS, Conversion Volume
Retention / LTV   Customer LTV, Repeat Purchase Rate
⚙️ How to Use These to Adjust Strategy
High CPA → Lower bids or improve targeting/landing pages

Low Impression Share → Increase bids or improve Quality Score

Low ROAS → Shift bids to higher-performing segments or adjust strategy type

High CPC but low CVR → You're bidding too much for low-converting traffic