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Ensuring PPC Campaign Effectiveness: A How-to Guide
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Marketing & SEO
October 10, 2024

Ensuring PPC Campaign Effectiveness: A How-to Guide

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Peter Devereaux
Peter is a Marketing Director with extensive success in SEM/PPC, SEO, email, social media, and digital marketing that...
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Making money is the goal of any business. Without profit, companies cannot expand, hire more personnel, or develop more products. The primary way businesses make money is through the revenue generated by selling products and services. To make money, you need customers. Attracting customers can be done in many ways, but one of the most effective is pay-per-click advertising.

Pay-per-click (PPC) is an online advertising model in which businesses can display ads on search engines and other websites. When a customer clicks on one of these ads, the business pays a fee to the advertising platform. The fee can be based on a number of factors but is typically based on the amount of money the business is willing to pay for each click.

When it comes to PPC campaign management, there are many factors to keep track of. From your click-through rate (CTR) to your cost per click (CPC), it can be challenging to know what's working and what's not. If you want to figure out how effective your PPC strategy actually is, you'll want to follow our PPC agency top tips on how to measure PPC effectiveness.

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Choose the Right Platform to Display Your Ads

social media_Kyiv, Ukraine - September 5, 2019: A paper cubes collection with printed logos of world-famous social networks and online messengers, such as Facebook, Instagram, YouTube, Telegram and others

The first step in measuring PPC effectiveness is to choose the right platform to display your ads. Different platforms have advantages and disadvantages.

Some of the most popular platforms for displaying PPC ads include:

  • Google Ads: A very popular PPC platform, Google Ads offers a variety of features, including the ability to target ads to specific demographics and interests.
  • Bing Ads: Bing Ads is another popular PPC platform that offers similar features to Google Ads.
  • Facebook Ads: Facebook Ads is a good choice for businesses that want to target their ads to specific demographics.
  • Instagram Ads: For businesses that want to target a younger audience, Instagram Ads is a good choice.
  • Twitter Ads: Twitter Ads is great for businesses that want to target a specific audience with short, concise ads.

Select Keywords and Headlines That Pop

The next step in measuring PPC effectiveness is to make sure you're targeting the right keywords and headlines. When it comes to PPC, the quality of your keywords and headlines can make a big difference in your results.

Some things to keep in mind when choosing keywords and headlines include:

  • Relevance: The keywords and headlines you choose should be relevant to your products or services.
  • Search Volume: The keywords and headlines you choose should have a high search volume. This means that people are actually searching for these terms.
  • Competition: The keywords and headlines you choose should have low competition. This means that there aren't a lot of other businesses bidding on these terms.

Use Ad-Specific Landing Page

Website,Landing,Page

When it comes to PPC, you want to use an ad-specific landing page. A landing page is a specific web page that's designed to convert visitors into customers. When creating an ad-specific landing page, ensure that the page is relevant to the ad and that it includes a call to action.

Some things to keep in mind when creating an ad-specific landing page include:

  • Relevance: The landing page should be relevant to the ad.
  • Design: The landing page should be well-designed and easy to navigate.
  • Call To Action: The landing page should include a call to action, such as "Buy Now" or "Learn More."

Analyze Data

Last but not least, you'll want to make sure you're analyzing the data. This includes everything from your CTR to your CPC. Examining this data will help you see what's working and what's not. You can make changes to your strategy based on this data.

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Average Order Value

The average order value (AOV) is a key metric for e-commerce businesses. It measures the average amount that customers spend per order and can be an important indicator of growth. There are a few different ways to calculate AOV, but the most common is to simply take the total revenue from all orders in a given period and divide it by the number of orders. This will give you the average amount spent per order.

However, it's important to note that AOV can vary significantly by business and even by product category. As such, it's important to track AOV over time to get a sense of how your business is performing. Additionally, if you're running promotions or marketing campaigns, it can be helpful to track AOV before and after to see how effective they were.

Conversion Rate

return on investment_Do you know the real value pay-per-click advertising is bringing to your business? Are you measuring PPC ROI accurately to ensure you’re not just wasting money on an underperforming advertising channel? When used effectively, PPC ads are a rapid way to drive traffic, increase brand awareness, and generate quality leads. However, many businesses and agencies tend to focus on ego-boosting stats, such as impressions, clicks, and click-through rate, rather than ROI. You wouldn’t neglect ROI in other areas of your business, so don’t do it for PPC. Measuring and calculating pay-per-click ROI informs you of the actual value it presents to your business and ensures you remain on track to break even or make a profit—this stops you from wasting valuable dollars on ads that don’t work. If you are neglecting it, our PPC consulting agency can help you get back on track. In this article, you’ll learn a few different ways to measure PPC success, including return on investment (ROI) and return on ad spend (ROAS). According to Google, for every $1 a business spends on Google Ads, they make $2. But, let’s not just believe their calculations—we’re going to show you how to do your own. What Is PPC ROI? Return on investment is one of the most well-known and popular KPIs used in business. PPC ROI is the comparison of how much PPC advertising costs your business vs. how much money it makes. It is a calculation used to understand the effectiveness of digital advertising channels. To calculate PPC ROI, you first need to know the revenue generated from PPC and the total of all costs that can be attributed to the channel. These costs include: Ad Spend This amount is easy to find in all of the PPC advertising platforms you use. Be sure to add together the money you spent with Google, Facebook, Bing, Instagram, or any other tools you use. Labor Costs Whether you’re using an agency or an in-house team, you’ll have some form of labor costs. For an in-house team or individual that oversees an agency, you’ll need to know their hourly salary and how much time they spend managing PPC campaigns. Third-Party Costs Many businesses outsource their PPC management to an agency. This is a much easier calculation than labor costs as you’ll likely be paying a contracted monthly amount for their services. How To Calculate PPC ROI Now that you’ve collected all your data, it’s time to put your PPC ROI calculator to work. It’s a simple formula, resulting in a percentage. (Net Profit / Total Costs) x 100 = ROI As an example, let’s say your PPC net profit for 2021 was $100,000, and your total costs were at $75,000, making your ROI calculation as follows: ($100,000 / $75,000) x 100 = 133.33% Top tip: when calculating ROI, 100% is the break-even point; meaning, if you’re in profit, you will see a percentage over 100, and if you’ve made a loss, it will be under 100. What is ROAS & How Is It Calculated? A variation of digital ad ROI is ROAS (return on ad spend). Rather than factoring in the total of all the costs mentioned in ROI, ROAS is comparing the amount you spent on ads against the revenue they generate. Again, expressed as a percentage, you calculate ROAS using the following formula: (Money Gained From Ads / Money Spent On Ads) x 100 = ROAS Let’s say your company spent $10,000 on ads and generated $15,000 in revenue. Your ROAS would be: ($15,000 / $10,000) x 100 = 150% As with ROI, your break-even figure is 100%, so setting that as a goal is a good start. Comparing ROAS with ROI When ROAS is showing greater than 100%, but ROI is coming in under 100%, you can look at your calculations to see which overheads are hampering your pursuit of profit. You may realize that your ads are performing brilliantly, generating a great amount of revenue, but your third-party agency costs too much. In this situation, it may be time to relook at your budget, metrics, and relationship with your agency. You may need to increase your budget to increase the revenue generated, renegotiate the cost of the contract with your agency, or look for a new PPC company to pick up your account management. Either way, it’s always beneficial to compare the two calculations. Conversions That Aren’t a Purchase When using a PPC platform, it’s incredibly easy to find the cost-per-click data. However, profit-per-click information is a little harder to find, and it’s a calculation you’ll have to do yourself. Sometimes, businesses find it hard to attribute a value to PPC conversions because there aren’t always users making a purchase. Alternatively, a conversion could be filling out a form, calling your company, downloading a brochure, or booking a meeting. None of these conversions have an actual dollar value, so you need to assign one to them. For example, you could use your average sale value and conversion rate to assign a value to a form fill. Let’s say one in every five users that completes a form converts to a customer—that’s 20 percent. Your average sales value is $100. Twenty percent of $100 is $20, so you could assign a value of $20 to every conversion that is a form fill. Using this method won’t give you a wholly accurate representation of ROI. However, you would need every transaction to be completed online to achieve this. In Summary Using a pay-per-click ROI calculator is imperative for any business to assess the value PPC brings to their company. Even if you don’t make sales online or your conversions are directed toward non-sales-related activity, you can still get an accurate picture of how much revenue PPC is contributing. ROI and ROAS are the holy grail of understanding how PPC is performing. Yes, the fluffy stats that agencies and marketing managers like to quote are great for monitoring progress. However, business owners care about making a profit; and just like any other expenditure, PPC needs to prove its worth.

The conversion rate is the percentage of visitors to a website who take the desired action, such as making a purchase. The calculation is simple: divide the number of conversions by the number of visitors, then multiply by 100 to get the percentage. For example, if 100 people visit your website and 10 of them make a purchase, your conversion rate would be 10%. 

In general, a high conversion rate is indicative of a successful website, while a low conversion rate could indicate problems such as poor design or a lack of compelling content. By monitoring your conversion rate, you can get an idea of how well your website is performing and make changes accordingly. With a little effort, you can ensure that more visitors to your site take the action you desire.

Summing Up

PPC agencies can help you with every step of your PPC ads, from choosing the right platform to selecting keywords to analyzing data. A good PPC agency will work with you to create a strategy tailored to your business and your goals. They will also be able to help you track your progress and make changes as needed to ensure that your campaigns are as effective as possible.

Digital Authority Partners is an experienced PPC agency that can help you with every step of your campaign. We will work with you to create a customized strategy that fits your needs and budget. Contact us today to learn more about our services and how we can help you grow your business.

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