Improve the #ROI on your #PPC

Improve Your Paid Search Marketing ROI in Five Steps

Improve the #ROI on your #PPCPaid search is a great way to get visitors to your website NOW. No need to wait months for the search engines to pick up your website and blog posts – just pay, and your listing shows up! When you use Google AdWords, LinkedIn ads or Facebook ads, you’re spending money on each click you generate, so you need to know how much you’re spending to acquire each visitor and each lead, as well as how much of a profit you’re making on that adspend.

You can get some very specific tips on improving the ROI of your paid marketing from our blog.

1. Click-Through Rate (CTR)

The percentage of the audience that viewed your ad and actually clicked on the link provided, calculated by dividing total clicks by the number of impressions.

What to Look For

As you become more skilled with paid search, your CTR will go up.

How to Improve Your Click-Through Rate

Monitoring your CTRs over time will help you determine the quality and effectiveness of your ad. If you want to improve CTRs for specific keywords, you can test different ad headlines, copy treatments, and landing page URLs to see which combination boosts your CTR for a given term.

2. Cost Per Click (CPC)

This is the amount you pay each time someone clicks on your ad.

What to Look For

Obviously, lower is better here, but a “good” CPC is impossible to define, as average costs per click will vary widely from industry to industry.

How to Lower Your Cost Per Click

Optimizing your adgroups, ads and keywords will bring your CPC down, but really this number is only helpful in determining ROI if you are also tracking conversions (leads or sales generated).

3. Conversion Rate

The percentage of visitors who completed a desired action (e.g., product purchase or lead generation form completion) after clicking on one of your PPC ads.

What to Look For

Conversion rates are a good measure of the quality of your PPC landing pages. If the landing page headline, copy, and offer are all relevant to the original PPC ad, then you should expect to see a higher conversion rate.

How to Increase your Conversion Rate

If you have a good click-through rate but low conversions on a specific ad, then you should carefully examine the landing page to determine why visitors aren’t converting. Is the page relevant to the text of the ad and the original search phrase? Is the value proposition clear? Is the offer compelling?

4. Cost-Per-Acquisition (CPA)

A measurement of how much you are spending on PPC advertising for each conversion. Calculate your overall paid search CPA by dividing total ad spend by your total PPC conversion rate. Or, calculate it on a per campaign basis by dividing your average cost-per-click by your conversion rate for a specific ad/keyword combination.

What to Look For

Obviously lower is better here, but, depending on what a conversion is worth to you, this could be a substantial number.

How to Lower Your Cost-Per-Acquisition

Tracking your CPA can help you optimize your PPC bidding strategy. For example, Google AdWords now offers a conversion-based bidding option that lets advertisers set their maximum ad bids according to a  target CPA. If you know your historical CPAs from previously successful PPC campaigns, you can use that figure to help bid more efficiently on new keywords.

5. Return on Ad Spend (ROAS)

ROAS measures the return on your PPC advertising investment, calculated by dividing your total ad spend by the total revenue generated from those PPC conversions.

What to Look For

Look for any positive number here. Clicks and visits are all very nice, but unless you have an overall positive ROI here, PPC is not working for you.

How to Improve your Return on Ad Spend

If you’re not seeing a positive ROAS, consider investing in some training, hiring a PPC specialist to get more for your money, or think about using this part of your budget differently. Our blog post Stop Wasting Money on AdWords might also help.

Ultimately, relying on paid advertising alone is not your best strategy. Combine paid ads with content marketing (blogging and social media) as well as email marketing. When you start getting more organic traffic than paid traffic, you will find you need less and less help from paid ads. Not sure how well you’re doing with that, or what you can do to improve? Claim your free online marketing consultation. We’re happy to provide some ideas you can use to take your online marketing to the next level.

 

About the Author Alisa Meredith (311 Posts)

As co-owner and chief inbound marketing consultant at Scalable Social Media, Alisa Meredith spends a lot of time keeping up with online marketing trends for the benefit of our customers. Computers have been a passion of hers since her first T1-99, so inbound and social media marketing is a natural fit.

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