If you're still on the fence about whether pay-per-click (PPC) is worth your time, effort, and money, let me tell you that it is. When done correctly, PPC may significantly increase sales and income for your company. In fact, according to recent statistics by WordStream a leading provider of data-driven digital marketing solutions companies that use paid search marketing generates $1.64 in revenue per dollar spent on their campaigns compared with just $0.50 per dollar spent by those companies who don't run PPC campaigns at all (or only rely on organic search). So if you want to get more bang for your buck, here are some metrics that will help you gauge the success of your Pay Per Click (PPC) campaigns:
Return on Ad Spend (ROAS)
The success of your PPC campaign may be determined by looking at the return on ad spend (ROAS). ROAS is the ratio of revenue generated by a campaign to the amount spent on the campaign:
- Revenue generated = Total gross profit from all sales
- Amount spent = Total cost of all clicks and impressions, less any refunds or returns
Cost Per Click (CPC)
So how do CPC and ROAS relate to one another?
- The better it is for you in terms of ROAS, the greater the conversion rate of your website. Conversion rate is a term used to describe how many visitors turn into customers (or leads).
- This means that if you have a high conversion rate then you have a high chance of making more money than you spend on advertising.
- However, this does not mean that if your conversion rates are low then it would automatically be less profitable for your business. In fact, there are many factors that can affect whether or not your campaign is profitable or not. Some examples include: – How much time has passed since someone clicked on an ad? – Do they browse through multiple pages before making a purchase? – How often do people come back to make another purchase after visiting once before? These questions need answers because they help illustrate why some sites may see lower profits from their campaigns despite having lower costs per click (CPC).
Cost Per Conversion (CPC)
The cost of a conversion divided by the number of conversions is known as the cost per conversion (CPC). The cost per conversion is a way to measure campaign effectiveness. The higher your CPC, the more expensive it’s getting to acquire customers through ads.
Divide the campaign's whole cost by the total number of conversions to determine CPC.
Quality Score
A Google indicator called Quality Score evaluates the effectiveness of your landing page and advertisement. The greater your Quality Score, the higher up on the search results page your ad will appear.
In fact, some marketers have found that increasing their Quality Score by even one full point can increase clicks by 20% or more!
How do you improve your Quality Score? It's actually quite simple: make sure that everything from ad text to landing pages meet all of Google's criteria for high-quality ads and landing pages.
Conversion Rate (CR)
By dividing the total number of conversions by the total number of visitors, you can get your conversion rate. So if you have 30 conversions on 50 visits, your CR is 0.6 (30 / 50). This number reveals how many internet visitors must watch or click an advertisement before one actually results in a sale.
Conversion rates that are too low could mean that users aren't interested in what you're selling, or they're getting lost along the way and don't know where to go next. Optimizing for better conversion rates includes making sure all relevant information is available at each step along their path toward purchasing a product or service with you, so they have no reason not to convert.
Optimizing for better conversion rates also means ensuring that as many people as possible see your ads—and then continue clicking them until they reach their intended destination (buyer's remorse does happen!). You can do this through ad rotation, which shows different ads on each page refresh instead of just showing whatever was last shown; this way there will always be new options available for viewers who want more insight before making purchases online.
Average Time on Page
- To calculate the average time on the page, you need to add up the total number of minutes each visitor spent on your landing page.
- This indicator is crucial since it demonstrates how interested your visitors are in the material you're presenting to them. For example, if someone spends a few seconds looking at something and then leaves, it could mean that they didn’t find what they were looking for or that something isn’t visually appealing enough to keep them engaged (either way, it means there might be room for improvement). If a visitor spends several minutes reading through all of your content and then purchases from you, though, that means that everything is working as intended and doing its job well! You could even use this information to see which parts of your landing page require more explanation or clarifying text so people understand exactly what they are buying or why it would benefit them in some way.
Bounce Rate Percentage
One of the most crucial indicators to track while evaluating your PPC campaign is the bounce rate percentage. A bounce rate is simply a number that represents how many people leave your site without visiting another page or clicking on any of the links on your landing page. This can be a signal that you are doing something wrong on your landing pages and need to make changes or tweak things.
The ideal bounce rate for any given website will vary, but there are some general rules of thumb:
- If you’re in the e-commerce business and want people to spend money at your store, then you should aim for a lower bounce rate than normal so they stay longer and convert into sales (or sign up for an email list).
- If you have information-based sites such as news outlets or blogs, then it's okay if there's some amount of bouncing because this means users are finding what they need quickly. But if it's too high then consider revamping things so people don't feel like leaving right away.
Customer Lifetime Value (LTV)
The amount of money you anticipate making from a client during their lifetime is known as customer lifetime value. It’s calculated by multiplying your average order value by the percentage of customers who will purchase again. This can be thought of as your customer base’s “lifetime contribution” to your business; how much revenue do they bring in before they stop buying from you?
The formula for calculating LTV is:
LTV = Average Order Value * Recurring Revenue Percentage / Customer Acquisition Cost
Organic Search Traffic
Google and Bing offer free search engine traffic, which means you don't have to pay for it. In fact, you can't buy it at all because it is not sold on a marketplace like Google AdWords. Rather, organic search traffic happens when people search for your product or service using natural language such as “buy [product name].” This search engine algorithm determines what keywords are most relevant to the searcher's query and then ranks those results accordingly.
Organic search traffic is free because it does not involve any paid advertising costs or bidding on keyword phrases (like paid PPC campaigns do). Instead, it relies on getting discovered by users who are searching within your industry or topic area. Organic SEO takes time although some organizations may see results in less than 90 days its value continues long after the initial launch has ended since there is no ongoing expense associated with generating this type of web traffic.
Pay-per-click is a viable marketing channel if done correctly.
Particularly when it comes to the text on landing pages, PPC is a terrific approach to test messages and obtain feedback. It can also help you build brand awareness and drive traffic to your website.
- Test messaging and get feedback: PPC allows you to test out different versions of ads before sending them out to all your customers. Before launching a significant campaign where you can wind up spending money on clicks from individuals who aren't interested in what you're selling, this enables you to locate the most successful ad wording. Build brand awareness: With PPC, it's easy for people searching for related keywords or phrases about your products/services/brand name, so long as those keywords are relevant enough that they trigger an ad. Drive traffic to websites: If someone finds an online article that mentions something positive about your company (or negative) while they're browsing the web on their smartphone or computer at work then they might decide that since they've already come across this information once why not click through the link?
Conclusion
While PPC is not the only marketing channel you can choose, it is one of the most effective. PPC generates a significant return on investment when done correctly (ROI). Before launching any campaign, you must be clear about your objectives and your success metrics. You should also consider using other channels alongside PPC such as organic search and social media advertising because these complement your other marketing efforts.
