If you advertise with Google Adwords or are thinking of initiating a campaign with it, the most important thing about thing to do once you start is to measure performance in order to make improvements. Albert Einstein used to say that the definition of madness is to do the same thing over and over hoping to get different results.

Now, each advertising campaign is different and each industry is different too. Nevertheless, there are measurement standards for most of them:

Daily budget.
The result of dividing your budget between the number of days you want your campaign to appear.

Impression.
The number of times your ad was shown.

Click through rate, CTR.
The percentage of clicks your ad received for every impression.

Conversions or contacts to measure how effective your website is.
Once people click on your ad, they are redirected to your website. A conversion is the positive result of this, examples can be, receiving a phone call, an e-mail, downloads or a sale.

Cost per click.
The average you pay for each click your ad receives.

Cost per contact or conversion.
Divide the investment between the total contacts or conversions.

Contacts quality.
The result of calculating the percentage between sales and the contacts obtained. Not every customer that contacts you qualifies to be given an estimate.

Closed sales percentage.
Sales that are made with contacts received. Depending on the industry, there can be sales that take a long time to materialise, that's why it is important to keep data from the first time they contacted you and when the sale was made.

Gross profit.
Sales total minus the cost of goods and the advertising investment.

Average sale.
From closed sales, what's the average amount?

There are many more measurements to try improving, but primarily you need to know the number of visits your website has, number of customers contacting you and the actual sales you close. Every little improvement in these measurements has a multiplying effect in the actual results of an advertising campaign. With every little detail, your campaign can improve notoriously.