A drop in Google Ads performance does not always mean your ads are performing badly. Sometimes the cause sits outside your account, in the wider market. The reverse is also true: if you assume the market is down when the problem is actually internal, wasted spend can continue unchecked.
The challenge is knowing which one it is before you, or your CMO, start cutting budgets or restructuring campaigns unnecessarily. That is why, at Bidnamic, we talk so much about benchmarking.
Start with year-on-year context
Week-on-week reporting creates a lot of noise. A few weak days, a change in the weather, the end of a promotion or a competitor sale can all move the numbers, making it hard to tell whether a dip comes from your account or the market.
Year-on-year analysis gives more useful context because it compares performance against a similar trading period. Start by reviewing the following metrics YoY:
- Revenue
- Cost
- ROAS
- CPC
- CTR
- Conversion rate
- Impression share
- Average order value
With this data to hand, you can then check whether the rest of the market has seen the same rise or fall.
Check CPC and CTR together
CPC and CTR are useful early signals of change in the wider market.
If CPC is rising, competition may be increasing. In that case, your costs may simply be moving in line with the rest of the industry as a result of market pressure.
If CTR is falling, your products may be less appealing or less relevant to shoppers than those of your competitors. That points back to your own account, where you may need to improve product relevance, pricing, imagery or position.
On their own, though, these signals do not tell you for certain whether the cause is your account or the market.
Look at conversion rate
Conversion rate shows whether the issue is happening before or after the click, which helps narrow down where the problem lies.
If CTR and CPC are stable but conversion rate drops, the problem may sit on your website, or with pricing, delivery, stock availability or checkout. If conversion rate has dropped across the whole category, however, shoppers may simply be less ready to buy, and the entire market is feeling it.
The only reliable way to know what the rest of the market is doing is to benchmark your performance against it.
Review competitor behaviour
Competitors can change the market quickly. A large discount, a free delivery offer, a new entrant or an aggressive bidding strategy can all affect your performance, even if nothing in your own account has changed.
Sometimes the simple answer to weak performance is that your competitors have become stronger. We recommend starting with our Google Ads benchmarks to see how your performance compares with others in your market.
