How San Diego Small Businesses Increase PPC ROI

A large return on investment (ROI) makes pay-per-click (PPC) appealing to digital marketers and small businesses. What you might not know, unless you work with a San Diego SEO agency, is that success is neither instant nor guaranteed. You have to carefully watch the numbers. This guide details reliable steps to increase your San Diego business’s PPC ROI, including:

• Formulas to derive basic vital stats for PPC
• Five strategies for improving your PPC ROI

There’s a lot to discuss, so get ready to take notes. Let’s go!

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If you want to learn how Digital Authority Partners can increase your PPC effectiveness, watch this video!

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Basic Formulas You Should Know for PPC

The top reason every San Diego SEO agency recommends PPC for small businesses is that it is a budget-friendly and high-return option for marketing. Even though people with zero digital marketing experience can grasp the basics of PPC, they can just as easily fail at it big time. To keep your strategy afloat, you must know basic computations so you can make sense of whether your ideas work and make appropriate changes here and there. Check these regularly and frequently. Here are the four points you need to know and use to get the most out of your San Diego PPC strategy.

     1. How To Calculate PPC ROI

One of the more common concerns for business owners and digital marketers is ROI, specifically PPC ROI. However, a San Diego SEO agency can tell you that this is a shallow measure of success. Even so, you still need to know how to compute it.  Here is the formula:

PPC ROI = Net Profits from PPC / Cost of PPC Campaign

You can derive net profits by deducting all costs related to a PPC campaign from the total profits gained (total PPC profits – total PPC costs). Then, to calculate the PPC ROI divide the net profits by the campaign cost. Remember, this is the return for the entire campaign, not just the ads.

     2. How To Compute ROAS

San Diego small businesses benefit most from PPC because they can track campaign progress and adjust budgets accordingly. That mainly refers to ad spend since it is a simple matter to increase or decrease it as needed. This formula is just for your return on ad spend (ROAS).

ROAS = Net Profits from PPC Ads / Cost of Ad Spend

Similar to the previous formula, start by calculating net profits from running PPC ads (i.e., the conversions created from click-throughs). Next, divide that amount by the total cost of the ad spend. The result is the ROAS, which indicates how much of ad spend was returned as profits.

     3. Determine Cost-per-Click and Impression

Although keyword tools like to suggest a cost-per-click (CPC) amount, they are rarely an accurate measure of how much you spend on PPC. After all, you can raise or lower your ad bids depending on your campaign’s performance. Here is a more precise way to calculate CPC:

CPC = Net Profits from PPC / Total Number of Clickthroughs

Start by computing net profits from PPC (total PPC profits – total PPC costs) before anything else. Then, divide that amount by the number of click-throughs your ads accumulated. This formula also works for impressions; just replace total click-throughs with total impressions.

     4. Determine PPC Cost-Per-Conversion

Unlike the ones above, this formula is less about vanity metrics and more about the actual cost or worth of running a PPC campaign. Conversions are your end goal, so you should always be conscious of whether PPC helps or hurts your San Diego small business.  To see this with greater accuracy, use this formula:

Cost-Per-Conversion = Total Cost of Click-throughs / Total Number of Conversions

Using the previous formula, get the total cost of clicks by multiplying the total click-throughs by the CPC. Then divide the cost of clicks by the total number of conversions (this depends on what you define as a conversion). The resulting figure should paint a realistic picture of what PPC does for you.

5 Best Practices for Better PPC ROI

Now that you know how to compute your PPC campaign’s vital statistics, the next thing you should learn is how to improve them. There is hardly any point in knowing what your campaign’s ROAS or cost-per-conversion is if you have not the slightest idea how to improve them, right? Investing in your PPC’s performance is the best way to improve ROI. Of course, hiring a San Diego SEO agency works best, but that is not the only way forward — you can follow an agency’s methods to get similar results. Here are five steps to help you achieve better PPC:

1. Always plan your campaigns to the last detail. Prepare everything from data on your target market and their needs to your keywords to when and how long you run a PPC ad campaign.

2. Create diverse ad copy to broaden appeal and capture as many leads as possible. Remember to do the same for your landing pages, but limit them for SEO.

3. A/B test your PPC ads and landing pages. There are no shortcuts to success in running a business, so take the time to build ads well and design landing pages with a clear purpose.

4. Watch closely for changes in analytics, especially at the beginning of your campaign. Sometimes, you get traffic from unexpected places. Use data to determine whether or not a source is worth pursuing.

5. Use dynamic ads to boost conversions. Even if you cover a wide range of demographics with your ads, you cannot intentionally match them to ideal audiences.

Use these strategies alongside the statistics you derive from the formulas above to find the perfect approach to PPC for your business. The biggest takeaway from this process should be that you need great patience and practice to increase ROI, especially in digital marketing. 

Summing Up

Increasing PPC ROI is a challenge for everyone, but it has to start with knowing your current campaign’s effectiveness. When you know where your spending is inefficient, you can repair your strategy. Testing is usually the best way to boost ROI and optimize landing pages. Need help improving your San Diego business’s PPC ROI? Contact Digital Authority Partners to learn how we can help.