Calculating ROI is an essential part of assessing how successful and beneficial a PPC campaign will be to a business. Although conversion rates and cost per conversion play important roles in evaluating the success of a PPC campaign, you still need to pay close attention to the overall ROI. In this article we will explain what the terms mean and why assessing ROI is paramount in setting up PPC campaigns.
Pay Per Click campaigns can offer great return on investment, providing that they are set up properly and managed effectively.
What do ROI and PPC stand for?
ROI simply stands for ‘return on investment.’ It evaluates the result of an investment and the value of the benefits compared to the cost. It is calculated by dividing the benefits of an investment by the cost of an investment.
PPC stands for ‘pay per click’ and is a form of online advertising used to direct traffic to websites. Basically advertisers pay a publisher (usually a website owner or search engine) whenever their advert is clicked. The amount they pay will depend on their bid and their daily limits.
PPC campaigns require careful monitoring and management. It is simply not a case of chucking money at it in hope that it will increase your conversion rates.
There are two costs associated with pay per click campaigns. The first is the initial set up costs. Most businesses have to pay professionals to research keywords and set up pay per click campaigns on their behalf. Although there are many guides online which can help beginners, setting up an effective PPC campaign takes knowledge and experience, which is why most businesses leave it to the professionals.
Whilst business owners must account for the initial cost of their PPC campaign when assessing return on investment, they must also account for the continuing costs of managing the campaign. It is essential that PPC campaigns are managed efficiently to ensure that the right amount of money is being spent on the advert at the right time in order to reap the most benefits.
Assessing the ROI of a PPC campaign
Assessing the return on investment of a PPC campaign can help business owners to see if the campaign will be financially viable. It is also important to evaluate whether the pay per click campaign will be used to generate sales or leads. In order to maximise the ROI of a PPC campaign you may need to create landing pages for your website. These are pages that visitors are directed to when they click on your PPC link. It is essential that your business website’s landing pages are optimised to maximise conversion rates.
It is also advised that you assess the competition for your chosen keywords as this will ultimately have an impact on your pay per click campaigns return on investment. Carrying out thorough assessments will help you to see if PPC is going to be the right internet marketing tool to use to promote your business, or whether it would be more beneficial to use an alternative like organic SEO marketing instead. It’s recommended to use a quality agency like Buyability to assess whether organic SEO or PPC works best for you.
It is essential to assess the return on investment of a pay per click campaign to see if your business will financially benefit from the initial and continuing investments. It is simply not a case of spending lots of money on a PPC campaign and expecting to see an increase in clicks and quality leads. Pay per click campaigns require testing to see if they are going to produce the desired results for your business. If you are unsure how to set up a pay per click campaign for your business or require help assessing the return on investment, it is best to get in contact with a professional pay per click manager. They will have the skills, experience and knowledge to create the most effective and profitable campaign for your business website.