How to measure PPC ROI:
(Revenue - Cost)/Cost x 100 = ROI%
We know you're busy so there's a basic way to measure and report PPC ROI. In short, it's that formula, but the full explanation is below the title image.
How To Measure PPC ROI
We are concerned with bottom line impact, here.
As long as you can isolate the revenue generated by conversions from your PPC campaign, you can use this formula to quickly work out your PPC ROI percentage.
Remember to make sure your Revenue includes only conversions arising from the PPC campaign.
It's important to define the Cost item when reporting to your bosses too; is it the cost of the campaign solely in terms of Ad Spend? Or are you including product and costs too for a full investment cost?
How To Report PPC ROI
How you report PPC ROI depends on how you define what forms the Cost in the formula.
It can be any of the following but be consistent and well defined when reporting;
- Based on Cost of the PPC Campaign
Cost of the campaign itself will give you Return On Ad Spend.
- Based on Cost of the Product & PPC Campaign Together
Cost of both the campaign and the product will give you the full ROI (it depends on company policy whether you should include overheads).
- As Profit Per Impression and Profit Per Click
Sometimes it's beneficial to look at your ROI in terms of impressions (number of times shown) and clicks (number of times users clicked through your ad).
This is useful for analysing which of your ads are working and which aren't. The design, copy and timing of future ads can be adjusted accordingly.
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