It is near impossible to answer the question because each campaign is unique to the organization it is designed for. A slew of factors may affect the performance of your pay-per-click investment. The driving force behind PPC is to funnel people to your website and then convert them into customers.
Just like any business investment, there is no guarantee of success. However, the methods used by pay per click services are so advanced that failure is rare. But the metrics of success hinge on your objectives. For example, the goal of some organizations is for users to register for a webinar or a survey. Others, like e-commerce sites, the objectives are more straightforward, and that is to sell products.
However, if you generate just $2 for every $1 you spent on your PPC campaign, then it is considered a positive return on investment.
Based on Google’s estimates, businesses earn $2 for every $1 spent on Google Ads. On average, they get five clicks for every one click on their ads on the search engine results page. It means that you get twice the ROI for every dollar you spent on your PPC. If all assumptions are true, you will earn $11 per every $1 you invest in Google Ads.
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Calculating your ROI
There is a need to calculate your ROI for two reasons:
- You have to know how much value you are getting from your investment
- It will help you determine your budget for PPC
The standard formula for computing the ROI is:
Revenue – Cost of goods
Cost of goods
If you recorded a profit of $200 from your PPC ad and invested $100, the formula would be (200 – 100/100). The result would be 1 and multiplying that with 100 will get you a 100% ROI. If you made $400 from your PPC ad, then your ROI is 400%.
Then you decide how much is the acceptable return for your investment. When your ad is not performing according to your standards, are you willing to spend more to optimize it even further or craft a new strategy? If so, how much are you going to spend to implement your new plan into action?
How do you modify your campaign?
- You can modify your ad copy to convert your leads
- You can modify your landing page for increased conversion
- You can modify your keywords and target keywords with high conversion potential
- You can modify your number of clicks goal to cut your losses or boost profits
Quick Tips in Enhancing Your PPC Campaign
Here are some ways to make sure you get the most out of your PPC campaign:
- Measure, measure, measure – You need to test and calibrate so that you can tighten your campaign. For example, tightening your match types will help you cut the deadweight. There are available apps you can use for analytics on your PPC.
- Do not forget to strike negative keywords – Analyzing data will help you identify the negative keywords. They are keywords that are not relevant to your website but are being pulled in accidentally. You can check the negative keywords on the dashboard of your Google AdWords. Look for the “Search Terms” and then create your strategy to ward off unwanted traffic.
- Make your keywords consistent – Your ad copy should successfully drive the right traffic to your website, and it means your keywords must be cohesive and consistent. You strategise the use of the keywords so that you do not waste money on keywords that are not providing their desired results. It means that you do not bid on keyword groupings simply because they are cheap.
These are all very doable. Do not worry, because most business goes through this phase. The idea is to tweak your PPC campaign further to make it even more effective. It is not like trial and error because everything is calculated and deliberate. Besides, PPC agencies always rely on analytics to limit their mistakes and increase the likelihood of success.
Even if you only get a dollar in return for every dollar spent, you are breaking even but still benefited from the pay per click services.
How so? Well, PPC ads reach out to your target customers. While some of them may need a little more convincing, you have made the first step to connecting with them. You are not going to persuade everybody on one go.
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