Interpreting the Tea Leaves of Google Ads Data

After running a Google Ad for a week or two, you'll start gathering data that can help you understand what demand might look like for your product. But how do you read these digital tea leaves? Here’s a guide to the key metrics you should focus on and what they can tell you about your product’s potential.

1. Do People See and Click My Ad?

These are the main metrics I focus on to ballpark initial interest. Start here to see whether your ad is grabbing customer attention.

• Clicks: This shows how many people clicked on your ad. In our case, I’m not expecting a huge number (our budget and ads aren’t great), but it’s a useful indicator of interest. It answers the simple question: Are people intrigued enough to click?
• Impressions: This shows how many people saw your ad, but it’s not the total number of people searching for your terms (because our budget is low). It’s the denominator for your CTR, and it can also give you a sense of whether your keyword targeting is on point. If impressions are low, you might need to tweak your keywords to capture more search traffic.
• Click-Through Rate (CTR): Calculated by dividing clicks by impressions. A higher CTR means people are clicking your ad at a decent rate. It can indicate that either your ad copy is effective, or your product is something people are interested in. If your CTR is low, that’s fine—that’s expected since we just started writing ads.

You can find all of this data in the Campaigns >> Overview section of Google Ads.

2. How Many People Are Searching for My Product?

Aside from ad performance, you want to know how many people are searching for your product keywords. This gives you a sense of overall demand.

• Search Volume and Forecast: Head to Tools >> Keyword Planner >> Search Volume and Forecast. This section shows how many people have searched for the keywords you're targeting. Remember, this number represents the total searches, not how many people saw your ad. With a low budget, your ad only reaches a small slice of this potential audience.

Search volume can also tell you about things like seasonal trends (are people more interested in your product at certain times of the year?) and give you a sense of how popular your keywords are over time.

3. What Will It Cost to Acquire Customers?

Now that you have a sense of ad performance and overall interest, it’s time to consider one of the most important factors: how much will it cost to acquire a customer? Here’s a simple breakdown to ballpark your Customer Acquisition Cost (CAC).

• Cost per Click (CPC): This is what you’ve spent on ads divided by the number of clicks you’ve received. Lower is better, but what’s “good” varies. A few pennies per click is considered good (mine are always higher than that).
• Conversion Rate (CR): We haven’t set up formal conversion tracking yet, but I define a conversion at this stage as someone who signed up for our waitlist. My proxy for conversion rate is waitlist signups divided by clicks, multiplied by CTR.
  Example: Let’s say you got 10 waitlist signups, 100 people clicked on your ad, and your CTR was 5%. This gives you 10 / 100 * 5% = 0.5% conversion rate.

You might hear people bragging about conversion rates as high as 60% (thanks, internet!), but ours will likely be much lower—and that’s okay. You can use this rough calculation to play around with different conversion scenarios.

• Customer Acquisition Cost (CAC): Here’s the interesting calculation: how much are you spending to get each person on your waitlist? Divide your total spend by the number of signups.
  Example: If you spent $100 on ads and got 10 signups, that gives you a $10 CAC. This isn’t the same as getting a paying customer, but it’s a starting point for estimating costs. You’ll likely have a lower conversion rate once people are actually buying the product, but at least you have a baseline.

The goal is to have a CAC that’s lower than your estimated product price, leaving you room to cover costs and make a profit.

4. Bonus Data: Dig Deeper into Your Audience

Google Ads a lot of really interesting data besides clicks and costs. Explore the Campaign Overview for additional data like:

• Demographics: Who’s searching for and clicking on your ad (age, gender, etc.)
• Geolocation: Are your ads more successful in certain regions? This can help you refine your targeting.
• Device breakdown: Mobile vs. desktop users—this might influence how you tailor your landing page or ad copy.

These details can help you imagine who your customers are and how you might serve them better. There’s nothing like real data to get your wheels turning on how to refine your product and business strategy.

Seeing this data for real might feel overwhelming, but it’s also exciting. You’re getting real-world signals about who’s searching for your product and how they’re interacting with your ads. Each piece of data helps you understand the demand and business of your future product. That’s pretty great, considering you haven’t built your product yet and just placed a Google ad.

Go read those tea leaves!