Every month, your Google Ads report lands in your inbox. It's full of impressions, clicks, CTR, CPC and percentages. What you really want to know is simpler: are the ads bringing in work, and is the money well spent?
The good news is that you don't need to understand every column. A handful of numbers tell you most of the story, and Google's own definitions are clearer than the jargon suggests. For example, Google defines click-through rate as "clicks ÷ impressions" (Google Ads Help). That's it.
This guide explains what each number in a typical report means, which ones matter most for a small business, and the questions worth asking your agency. It's written for owners and managers, not marketers.
Key takeaways
- Conversions are the number that matters most. Google defines a conversion as "a specific customer activity that is valuable to your business", such as a form, a call or a booking (Google Ads Help). If your report has no conversions, ask why.
- Clicks and CTR show interest, not results. A high click-through rate is good, but only if those clicks become enquiries.
- The search terms report shows what people really searched. Google says the terms listed "might be different from your keyword list" (Google Ads Help).
- Impression share shows missed opportunities. It tells you how often your ads didn't show because of budget or Ad Rank.
- Optimisation score and Quality Score aren't results. Google calls optimisation score "an estimate of how well your Google Ads account is set to perform" (Google Ads Help). A high score doesn't mean more enquiries.
What do the numbers in a Google Ads report mean?
Most reports show the same six core numbers: impressions, clicks, click-through rate, average cost per click, conversions and cost per conversion. Google defines each one in plain terms. An impression, for example, "is counted each time your ad is shown on a search result page or other site on the Google Network" (Google Ads Help). Here's what each number tells you.
| Number | What it means | The question it answers |
|---|---|---|
| Impressions | How many times your ad was shown | Are people seeing the ads? |
| Clicks | How many times someone clicked the ad | Are people interested? |
| CTR | Clicks divided by impressions | Is the ad appealing to the people who see it? |
| Avg. CPC | Average cost of each click | What is each visit costing? |
| Conversions | Enquiries, calls or bookings you've set up to track | Are the ads producing leads? |
| Cost / conv. | Average cost of each conversion | What is each lead costing? |
Impressions
Impressions count how often your ad appeared. They show reach, nothing more. A rise in impressions with no rise in enquiries usually means your ads are showing to more people who aren't the right fit.
Clicks and click-through rate (CTR)
Google counts a click when someone clicks your ad, "like on the blue headline or phone number of a text ad" (Google Ads Help). Click-through rate is "clicks ÷ impressions" (Google Ads Help). If 1,000 people see your ad and 60 click, your CTR is 6%.
For context, LocaliQ puts the average search ad CTR across industries at 6.64% in 2026 (LocaliQ). That's based mostly on US advertisers, so treat it as a rough guide. Your own trend over several months tells you more.
Average cost per click (avg. CPC)
Average CPC is the total cost of your clicks divided by the number of clicks (Google Ads Help). It changes with competition. Clicks in busy local markets, such as legal services, cost more than clicks in quiet ones. Our guide to what family law firms spend on marketing shows how much this varies in one industry.
A lower CPC isn't always better. Cheap clicks from the wrong searches cost more in the end than fewer, more expensive clicks from people ready to hire.
Conversions
A conversion is "a specific customer activity that is valuable to your business" (Google Ads Help). For a local service business, that usually means a contact form, a phone call from the ad or a booking. Conversions only appear if tracking has been set up, and they only count the actions your account is told to count.
Calls need their own setup. With call reporting turned on, Google assigns a forwarding number to your ad and can count a call as a conversion when it lasts longer than a minimum length you choose (Google Ads Help). That way, a two-second wrong number doesn't count as a lead.
Conversion rate
Conversion rate is "the average number of conversions per ad interaction, shown as a percentage". Google's example: "if you had 50 conversions from 1,000 interactions, your conversion rate would be 5%" (Google Ads Help). LocaliQ puts the average Google Ads conversion rate at 8.18% in 2026 (LocaliQ).
Cost per conversion
Cost per conversion "tells you how much, on average, each of your conversions cost" (Google Ads Help). This is the number to compare with what a new client is worth to you. If a new client is worth thousands and each enquiry costs a fraction of that, the ads are likely paying their way, even if the cost per click looks high.
Which numbers matter most?
Conversions and cost per conversion matter most, because they connect ad spend to enquiries. Google's "Conversions" column "shows the number of conversions that you've received across your primary conversion actions" (Google Ads Help). Everything else in the report helps explain why those two numbers went up or down.
A simple way to read any report is in this order:
- Conversions. How many enquiries, calls or bookings came from the ads this month? Is that up or down on last month and the same month last year?
- Cost per conversion. What did each enquiry cost? Is that affordable given what a new client is worth?
- Search terms. Were the ads showing for the right searches?
- Impression share. Are you missing people because of budget or Ad Rank?
- Clicks, CTR and CPC. Use these to explain changes in the first two numbers.
Then check the conversions against your own records. If the report says 30 enquiries but your inbox and call log show 12, something is being counted that shouldn't be.
What does the search terms report tell you?
The search terms report shows the actual words people typed before seeing your ad. Google says to use it "to know how your ads performed when triggered by actual searches", and warns that "the search terms listed might be different from your keyword list" (Google Ads Help). Keywords are what you bid on. Search terms are what people really searched.
This is where wasted spend usually shows up. A family law firm bidding on "divorce lawyer" might find its ads showing for "free divorce forms" or "divorce lawyer jobs". A plumber might appear for "plumbing apprenticeship". Those clicks cost money and rarely turn into work.
Ask to see the top search terms each month, or at least a summary. A good report notes which irrelevant terms were found and added as negative keywords, so the ads stop showing for them.
What is impression share?
Impression share is the percentage of times your ad showed out of the times it could have. Google's formula is "impressions / total eligible impressions" (Google Ads Help). If your search impression share is 40%, your ads missed six in ten chances to appear.
Two related numbers explain why:
- Search lost IS (budget): "The percentage of time that your ads weren't shown on the Search Network due to insufficient budget."
- Search lost IS (rank): "The percentage of time that your ads weren't shown on the Search Network due to poor Ad Rank in the auction."
Both definitions come from Google Ads Help. Lost to budget means more money could buy more visibility. Lost to rank usually points to weak ads, low bids or a poor landing page. More budget alone won't fix that.
What about Quality Score and optimisation score?
Neither is a result. Google says Quality Score "is a diagnostic tool meant to give you a sense of how well your ad quality compares to other advertisers", rated from 1 to 10 for each keyword. It also says "Quality Score is not an input in the ad auction" (Google Ads Help). It's built from expected click-through rate, ad relevance and landing page experience.
Optimisation score is Google's estimate of how well the account "is set to perform", from 0 to 100% (Google Ads Help). It goes up as Google's recommendations are applied, and some recommendations, such as raising budgets, mean spending more. A score of 100% tells you the account follows Google's suggestions. It doesn't tell you how many enquiries you got.
Both are useful for the person managing the account. Neither should be the headline of your monthly report.
What are the warning signs in a Google Ads report?
Most problems show up as a mismatch between the numbers and your phone. Watch for these:
- No conversions shown. The report only lists clicks, impressions and CTR. That usually means tracking isn't set up.
- Conversions that don't match your enquiries. The report claims far more leads than you received. Page views or button clicks may be counted as conversions.
- Clicks rising, enquiries flat. Ads are reaching more people, but not the right ones. Check the search terms.
- Cost per conversion climbing for months. Competition, landing pages or targeting may need attention.
- A high optimisation score as the main result. It's a setup score, not an outcome.
- No explanation of changes. Numbers alone, with no notes on what was changed and why.
One thing you usually don't need to worry about is fake clicks. Google filters out invalid clicks and says "You won't be charged for invalid clicks or impressions" (Google Ads Help), so most accidental or automated clicks are already removed from your bill.
What should you ask your agency about the report?
A good report answers your questions before you ask them. Google itself treats conversions as the actions "valuable to your business" (Google Ads Help), so a report built around clicks alone is missing the point. These questions help you get a clear picture:
- What counts as a conversion in our account? Forms, calls over a set length, bookings? Ask for the list.
- How do the reported conversions compare with the enquiries we actually received? A small gap is normal. A big one needs explaining.
- What were the top search terms, and which ones did you exclude? This shows someone is actively managing the account.
- How much impression share are we losing, and is it budget or rank? This tells you whether more budget would help.
- What did you change this month, and what happened? Every report should link actions to results.
- What's the plan for next month? One or two clear priorities beat a long list.
- Do we own the Google Ads account? You should have admin access to your own account and data, even if an agency runs it.
If you're still deciding whether paid ads suit your business at all, our guide to SEO or Google Ads for a small firm compares the two. And because ads now appear inside Google's AI answers in Australia, our article on how Google's AI features affect local businesses explains what that means for your campaigns.
Frequently asked questions
It depends on your industry and how specific your keywords are. LocaliQ puts the average search ad CTR across industries at 6.64% in 2026. That figure is mostly from US advertisers, so use it as a rough guide. A steady or rising CTR in your own account matters more.
LocaliQ's 2026 data puts the average Google Ads conversion rate at 8.18% across industries. Your rate depends on what you count as a conversion, your landing page and how ready searchers are to buy. Compare month to month, and check conversions against real enquiries.
The most common causes are ads showing for the wrong searches, a landing page that doesn't match the ad, or conversions that aren't being tracked. Google says search terms "might be different from your keyword list", so start with the search terms report.
A high score isn't a goal in itself. Google describes optimisation score as "an estimate of how well your Google Ads account is set to perform", from 0 to 100%. It reflects how closely the account follows Google's recommendations. Judge results by conversions and cost per conversion instead.
Google says "You won't be charged for invalid clicks or impressions", and flagged clicks are "filtered out of your campaign metrics and removed from your billing". If invalid clicks are found after you've been billed, Google says you receive a credit where appropriate and possible.
Need a second pair of eyes?
A Google Ads report should tell you three things quickly: how many enquiries the ads produced, what each one cost and what's being done to improve it. If yours doesn't, it's worth asking why.
The Digi Lab manages Google Ads for local businesses in Brisbane and the Gold Coast, with reports built around enquiries, not jargon. Learn more about our Google Ads management, or talk to us about your project.