Digital marketing has become an essential tool for businesses to reach their goals. Companies are increasingly utilising online methods to find new customers, create interest, assess potential customers, and ultimately turn them into paying customers. Pay-per-click (PPC) digital advertising is a cost-effective way to do this. Brands are investing in comprehensive PPC campaigns to increase brand recognition, bring more visitors to their websites, and generate more qualified leads.
However, despite all of that, it is important to track the success of your pay-per-click campaigns and adjust them accordingly to ensure that you are getting the desired results from your investment.
Today, we're going to help you better understand ROI for PPC and teach you how you can properly calculate PPC ROI.
Analysing the performance of your PPC campaigns is essential in order to ensure their success. It is necessary to measure both the tangible results, such as return on investment, as well as the less tangible metrics, like impressions, to assess the success of a paid search campaign.
PPC campaigns come with a range of financial costs beyond the click rate. You must account for expenses such as technology tools, advertising budget, third-party fees, and personnel costs. All of these need to be factored in to get a true picture of the total expense of the campaign and understand your ROI. Also, you need to know your total revenue to complete the equation.
With that, the formula to calculate your ROI is this: (profit - cost) / cost.
ROAS stands for Return on Advertising Spend, which is a measure of how much money a business earns from its advertising and marketing efforts compared to the amount of money it spends on those activities. This is what people generally refer to when talking about ROI in marketing.
That said, the formula is quite straightforward, and you can easily understand your overall PPC performance from it. The formula is as follows: (PPC revenue - PPC cost) / PPC cost.
Profit per click (PPC) and profit per impression (PPI) are two popular performance-based marketing models used to measure the success of an online ad campaign. Both models measure the profitability of an ad by determining the amount of money an advertiser earns for every click or impression generated.
Now, there are two formulas here that you can use. For-profits per impressions, the formula is simple: profit / impressions. As for profits per click, it would be: profit / click. As you can see, it is quite straightforward, and with the results, you can figure out which metric to go for to test further if necessary.
And those are the formulas you need to know to get a rough impression of how your PPC ads are doing. Remember, these are just numbers, and how you expand on them or use them is entirely up to your needs. You can use them to capitalise on PPC ads that work well, improve the ones that aren't, and so much more!
Kickass Online is a digital marketing company that services the world, offering impactful campaigns that help clients generate plenty of leads. If you are looking for a PPC calculator, check out our resources.
