Today, a good number of consumers rely on the internet for information to make smart purchase decisions. As such, if your business is not online, you may be missing out on business opportunities. To be successful online, however, will require that you increase your online visibility and ensure your brand message reaches the target customers. Pay-per-click, or PPC advertising, is a powerful form of marketing that helps to attract qualified traffic. To leverage PPC, however, you need to understand what it is and how it works. Learning more about it will also enable you to focus your efforts on activities that are likely to increase your return on investment.
What Even is PPC?
Pay-per-click is an internet marketing model that lets advertisers place ads on an ad platform and pay a fee every time their ad is clicked. While there are different types of PPC ads, the most common one is the paid search ad.
Ad networks will usually allow interested advertisers to bid on relevant keywords in an open auction. With search engines, the Ad Auction is an automated process through which the platforms determine which ads will appear alongside search engine results. Your bid is an indication of how much you are willing to pay each time someone clicks on your ad. Bidding is an important part of the process since it is one of the factors that determine your ad placement. Other factors that are taken into account are the quality of the ad and extensions.
Search engines will also evaluate the relevance of your ad to your keywords, the relevance of your landing page as well as the ad’s click-through rate. It is important to note that all ads under this form of advertising are subject to the Ad Auction. In essence, you will not have your ads appearing more prominently than your competitors’ simple by paying more.
In case a user searches for something on a search engine, and there is an ad spot on the search engine results page, an Ad auction will take place immediately for the keyword. However, this will also depend on whether there are advertisers who want to have their ads displayed for the given search query. The auction will be triggered based on the specific keywords that advertisers bid on. Complex algorithms calculate the ads to be shown, the order in which they will appear, and from which advertisers. In the end, the ads that win the auction will be displayed in the top spots of the search engine results page.
Is it Worth the Money?
Just like with any other marketing effort, it will be important to establish whether your PPC campaign will deliver a return on investment. To do this, you will have to track progress and measure results throughout the entire period of the campaign. Learning how to calculate PPC ROI should be an essential part of your strategy.
Strictly speaking, the return on investment is calculated by subtracting the cost of PPC management from profit and dividing the figure by cost. However, things are a bit different in the world of advertising. Most advertisers talk about return on advertising spend, which is PPC revenue minus PPC cost, divided by PPC cost. Typically, the costs of a PPC campaign go beyond PPC click costs.
They include other expenses such as costs to make products, credit card processing costs, the cost of returned goods, and customer service costs. You will also have to think about the costs of running your website, marketing automation, and salaries for your salespeople. Simply put, you will have to factor in a number of costs.
Forecasting Pay Per Click ROI
If you are looking to forecast your Pay-per-Click ROI, you will have to take into account the key components of PPC ROI. You will want to increase the money that comes in and reduce the money that goes out. Here is part of the information you will need.
Monthly Ad Spend
Since information relating to cost is important in calculating ROI, you will need to know how much you are spending on your PPC campaign in a month.
Conversion Rate
How well you optimize your account structure and landing pages will have a huge impact on your PPC conversion rate. The marketing intelligence associated with the paid search will make it easy for you to establish your conversion rate.
Cost Per Click
Cost per Click is one of the most important costs when it comes to a PPC campaign. Several tools and services can help you get this information. You should consider looking at the CPC for some of the most popular terms and use mid to long-tail keywords to keep your costs low.
Average Sales
It is already clear that you will have to know your average sales to calculate ROI. You can get this information from your website as well as offline sales.
What Can I do to Increase my ROI?
In case you realize that your PPC ads are not making you money, there are several areas you should consider focusing on. Here are some of the steps you can take.
Targeting
One of the reasons why your conversion rate may be low is because your ads are not targeted properly. Regardless of the platform, you are using, make sure your ads are shown to people who are interested in your offering and will want to go through your sales funnel.
Build Relationships
Instead of sending people straight to a sales page, you should take time to build relationships. Considering that the internet is awash with ads, people are more likely to buy from you if they connect with your brand. Increased engagement will help to boost the profitability of your PPC campaign.
Improve Your Conversion Process
If you do not know how to convert leads to buyers, your ROI will remain low. Make sure the emails you send, as well as your landing pages, contain engaging and interesting content that catches the attention of your audience. You may also want to lead prospects through the purchase process to boost sales.
Make Sure Your Product Offers Value
Pay-per-click ads are just a way of getting your products in front of your target customers. If your product does not offer value or solve any problems, your sales performance will remain low. Even as you improve your PPC campaign, make sure people will want to buy your products.
See a Return on Your PPC Investment
There is a lot that goes into running a successful PPC campaign. To avoid common pitfalls and develop the right strategy, you should consider working with experts. At BizIQ, we have a wide range of marketing solutions that small businesses can use to achieve their business objectives. Contact us today to learn more about our services.