The essentials
- Metric: a raw measure supplied by the platform (clicks, impressions, cost, conversions); there are more than 200 of them in Google Ads.
- KPIs: a metric or ratio chosen because it measures progress towards an objective (cost per conversion, ROAS, share of qualified leads); three to five are enough.
- Objective: an expected result, quantified and dated (“60 quotes a month at under €40 by December”); it comes before the choice of KPIs, not the other way round.
- The classic mistake: tracking the metrics that are available instead of the KPIs that are useful, and mistaking a rising KPI for an objective reached.
A Google Ads account produces hundreds of figures. Without a distinction between what is measured, what is steered and what is aimed at, reporting becomes a stack of columns where everything looks important and nothing guides a decision. The three terms have precise definitions, and their logical order starts with the objective. This article defines them, then builds the full hierarchy on a Search campaign example.
The three definitions
| Term | Definition | Examples in SEA | Who sets it |
|---|---|---|---|
| Metric | A measured quantity, with no value judgement | Impressions, clicks, cost, conversions, CTR, average CPC, impression share | The platform |
| KPI (key performance indicator) | A metric or ratio kept because it measures progress towards an objective, with a threshold | Cost per conversion below €40, ROAS above 500%, share of qualified leads above 60% | The advertiser, with the account manager |
| Objective | A result to reach, quantified, dated, tied to revenue or margin | 60 quotes a month at under €40 by December; €25,000 of monthly sales at 500% ROAS | Management |
Any metric can become a KPI; none is one by nature. CTR is a KPI when comparing two ads, and a simple metric when judging a campaign's profitability. The general definition is set out in what a KPI is ; what follows deals with how the three levels fit together in an advertising account.
The logical order: objective, then KPIs, then metrics
The path runs from the top down. The objective states what the business expects from Google Ads in business terms; the KPIs turn that objective into indicators followed each month; the metrics explain the movements of the KPIs. Doing the opposite (starting from the available metrics to deduce objectives) leads to click or impression objectives, which bring in nothing.
- Objective: expressed in euros or in business volume, with a deadline. An objective with no figure (“raise awareness”) allows no KPI.
- KPIs: three to five indicators, each with a threshold and a reading frequency. Beyond five, attention scatters.
- Diagnostic metrics: consulted only when a KPI moves out of its range, to understand why.
A full example: a small services business
A renovation business sells jobs worth €8,000 on average, with a 25% margin and a 20% signature rate on quotes. A quote is therefore worth 8,000 × 0.25 × 0.20 = €400 of expected margin. It agrees to devote 10% of that margin to acquisition, i.e. €40 per quote.
| Level | Wording | Threshold or target | Frequency |
|---|---|---|---|
| Objective | Get 60 quotes a month through Google Ads by December, at an average cost below €40 | 60 quotes, €2,400 of budget | Quarterly |
| KPI 1 | Cost per quote | Below €40, alert above €50 | Monthly, 3-month rolling |
| KPI 2 | Number of quotes | 60 a month, alert below 45 | Monthly |
| KPI 3 | Share of qualified quotes (matching area and job type) | Above 70% | Monthly, sales feedback |
| KPI 4 | Share of spend on off-target terms | Below 15% | Monthly |
| Diagnostic metrics | Average CPC, conversion rate by page, CTR by ad, lost impression share, Quality Score | No threshold | On request |
If KPI 1 moves to €55, the diagnostic metrics say why: a CPC that has risen by 30% points to competition or Quality Score; a conversion rate that has dropped points to the landing page or a badly measured conversion. The alert thresholds for each KPI are detailed in the Google Ads KPIs.
The confusions that distort steering
- Mistaking a rising metric for an objective reached: impressions have doubled, but quotes have not moved; the campaign has widened its reach, not its result. This trap is described in vanity KPIs.
- Setting a KPI with no objective: “improve the CTR” only makes sense if a higher CTR brings a business result closer; on off-target queries, the opposite is true.
- Stacking up KPIs: a report with fifteen indicators and no hierarchy no longer allows a decision; every extra KPI must answer the question “which decision does it change?”.
- Confusing a bid target with an objective: the target CPA set in Google Ads is a parameter of the algorithm; the objective remains the real cost per quote, measured on qualified contacts.
- Forgetting the time dimension: an objective with no deadline can be neither reached nor missed.
Adapting the hierarchy to the campaign type
The same logic applies to every advertising objective, with different KPIs. A video awareness campaign is steered on cost per completed view and the rise in brand searches; an e-commerce campaign on ROAS and margin after advertising cost; a candidate recruitment campaign on cost per qualified application. The choice of objective also determines the campaign settings, described in which objectives to set for a Google Ads campaign. In every case, the objective is expressed as a business result, the KPIs as ratios with a threshold, and the metrics stay in reserve for diagnosis.
How GreenRed helps
Rather than juggling several tools, GreenRed's return on investment module brings these metrics together in a single dashboard, compares them over time and tells you which actions come first. You can try it free, with no card, from the Pricing.
Frequently asked questions
Can a metric become a KPI?
Yes, as soon as it is tied to an objective and given a threshold. Conversion rate is one metric among others as long as you merely observe it; it becomes a KPI when the objective is to improve the landing page and a threshold of 5% is set. The difference lies in the use, not in the nature of the figure.
How many KPIs should you track on a Google Ads account?
Three to five. Beyond that, no one knows which one takes precedence when they move in opposite directions. A lead generation account is steered with cost per lead, volume, share of qualified leads and share of off-target spend. The other figures stay available for diagnosis without appearing in the main view.
How do you set a quantified objective when you start with no history?
From the value of a customer: average margin multiplied by the rate at which a contact converts, of which you take a fraction (often 10 to 20%) as an acceptable acquisition cost. The volume follows from the budget divided by that cost. After three months of campaign, the objective is revised with the real figures.
Is the campaign objective in Google Ads an objective in the steering sense?
No. The “objective” chosen when creating a campaign (sales, leads, traffic) is a setting that shapes the options offered and the algorithm's optimisation. A steering objective is a quantified, dated business result defined by the company. The two must be consistent, but the second is not read in the interface.