by Brian Basch

ROI, or Return on Investment, is the basic measurement of whether a PPC advertising campaign is successful. A high ROI means you are achieving maximum profits compared to the amount of money you spend on clicks. This equates to pure profit.

By utilizing good managerial skills, you can maximize your ROI. Remember, a neglected campaign will eventually stop performing. Trends change, and in order to make money from your campaign, you need to keep up with those trends.

The three areas that should be maintained throughout your campaign are keywords, bidding, and ads. Your PPC engine offers tools in order to track your keywords and bidding. Your advertisements can be optimized using split testing.

A good ROI is created by generating as many sales as possible from as few clicks as possible. By making sure your PPC advertising campaign is well managed, you will be able to ensure a strong ROI for your campaign.

ROI is fairly simple to calculate. First, you will need your sales conversions. This is the number of total clicks that result in one sale. An average sales conversion rate is between 1% and 5%. This number of total clicks is then multiplied by the price you are paying for each click to get the cost of each sale.

Lastly you will add up the amount you will make when you make a sale. If you are selling digital products you will make close to 100% of the profit from the product. With hard goods you will need to take out the cost of the product plus drop shipping fees or shipping and handling. Once you have calculated the profit from the sale, you will then subtract the cost of the clicks needed to make the sale. This will be your ROI.

Although PPC advertising campaign management can be quite time consuming, it is necessary if you want to achieve an optimized ROI. Keywords will need to be analyzed to make sure they are in the correct position for their performance. A strong performer which is currently in a low position should probably be moved up in position to achieve more sales and profit. On the other hand, a weak keyword in a high position is wasting money. It will need to be dropped in position or put on hold all together.

By simple adjustments you can greatly increase your ROI. You will need to track traffic and sales from keywords on a weekly or even daily basis. It is important to keep an eye on your campaigns so that you can catch any keywords that are not performing well but are still costing you money.

About the Author:
To receive more up-to-date info about pay per click management, head over to Brian’s site about adwords consultant.

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Filed under: Business Online

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