PPC ROI: Is Your PPC Campaign Making Money or Wasting it?
The goal of any PPC campaign is to make you money. Any PPC ad that doesn’t drive clicks or conversions to your website is a waste of time and possibly money. But how do you tell if your PPC strategy is a successful one? We’ll explore that concept in this blog post and explain how to improve unsuccessful campaigns and calculate PPC ROI using a few core metrics, as well as some red flags to look for during your PPC evaluation.
PPC Evaluation and Optimization
Continuous analysis and optimization of your PPC campaign is crucial to its success. After all, how can you measure your campaign’s effectiveness if you don’t regularly check in on its progress? Tools like Google Ads (formerly AdWords) make it easy to zero in on everything you need to be able to tell if your campaign is a success or a flop. Here are some things to keep in mind throughout the evaluation process:
- Tweak your campaigns for better performance. Make gradual, incremental changes to your PPC campaigns and see if those changes have had any effect on your conversion rate. Avoid making too many changes at once as this can muddle the results.
- Enhance the campaigns that are doing well. If something’s working, make it even better. Use your successful ads as a baseline to build out and expand your PPC campaign.
- Cancel or pivot campaigns with poor performance. There’s no time (or money) to waste on poor-quality PPC campaigns. You’ll need to ask yourself some tough questions. Is it worth putting an extra money or effort into your campaign? By making some alterations, do you think your campaign will improve? If you feel like all hope has been lost, you may have to cut the cord and start anew.
Important PPC Metrics to Note
If you’re not measuring the following metrics, you should as they will help you determine if your PPC ads are making you money:
- Traffic and CTR – An ad that drives traffic to your site is doing its job. Your campaign’s click-thru rate is a firsthand indicator of its success — if people aren’t clicking on your ad at all, you need to adjust your strategy.
- Conversion rate – Arguably the most crucial of the PPC metrics, your conversion rate shows what percentage of visitors that click on your ad convert to a sale. Remember, clicks that don’t convert are essentially wasted dollars, so be sure to continuously optimize your ads for better results.
- Phone calls – Many customers convert over the phone instead of online, but a number of businesses fail to accurately track these conversions. As a result, call tracking has become an increasingly popular way to measure which PPC ads are driving phone calls to your business. By measuring phone calls as conversions, you can see firsthand which campaigns are working and which ones need improvement.
- Quality Score – An important factor in search ranking, Quality Score is a combination of a number of factors relating to your ad including CTR, keyword relevancy, geographical relevance, landing page quality and landing page load time, all of which combine to ultimately provide a better user experience to customers. Quality Score can also influence the cost per click (CPC) of your ad — the higher your Quality Score, the lower your CPC, and the better your chances are of getting your ad seen by the right people.
Signs That You’re Probably Wasting Your Money
Looking for red flags in your campaigns is vital to the success of your overall paid strategy. If any of these sound like you, you’re at risk for having a poor PPC ROI:
- Broad targeting – Targeting your campaign to too broad of an audience is a common mistake that can result in wasted ad spend. Why? Because if you’re not properly targeting what customers are searching for, you’re most likely not going to attract the right visitors to convert.
How can you tell if your PPC ad campaign is too broad? For starters, revisit your targeted keywords. You’ll want to see whether your keyword match type is broad match or exact match; this determines the size of the audience that can see your ad. If your ad is being viewed by too many people who aren’t clicking or converting, you may want to consider the exact match option for your campaign.Speaking of keywords, you should revisit your list of targeted keywords as well. Can you be more specific in your keywords to improve results? By tightening up your keywords to better align with what your customers are searching for, you’ll have better chances of your ad displaying to the right people, in turn increasing your pay per click success.
- Low conversion rate – A low conversion rate means that something’s not working. Remember, the goal of any PPC campaign is to drive conversions, and if your campaign isn’t giving you a great ROI, then you’re wasting money.
- Poor phone lead count – An ad campaign that features a phone number should be driving phone calls. If that’s not happening, then you need to revisit your campaign strategy. Remember, accurately tracking this metric is vital to determining PPC success. Call tracking is a great addition to PPC campaigns for this reason.
- Low goal completions – If your campaign aims to have customers complete certain goals, like signing up for an e-newsletter or filling out an online form, the evidence you need to support your campaign’s success is right in front of you. If people aren’t completing your goals as much as you would have hoped for, you’ll want to find out why. Is your landing page design confusing? Is your verbiage too unclear or misleading? Revisiting your ad campaign goes beyond just the ad itself — you’ll want to reexamine every aspect of the customer’s journey, including the landing page that they’re directed to after clicking on your ad.
How to Calculate ROI for PPC Campaigns
In the simplest terms, PPC ROI is calculated by dividing the total revenue you’ve received as a result of your PPC ad campaign by the cost of your ad spend. If your ROI is a positive number, then you’ve clearly gained some sort of return from your campaign. If your ROI is in the negatives, you’ll probably want to revisit and revise your campaign to improve your numbers.
In order to accurately measure your PPC ROI, you’ll need to make PPC evaluation and optimization a top priority. By measuring a few important metrics and knowing which red flags to look for, you’ll be well on your way to a better optimized campaign that will set you up for pay per click success.