Your Guide to PPC Campaigns – Reduce Costs and Improve ROI

When a lot of people think of marketing, they think of creative graphics on billboards or extravagant promotional events, and while some aspects of marketing are geared towards the creative side, other aspects of it are very technical and data-driven. For digital marketing campaigns like PPC campaigns, understanding the numbers and technical practices is important if you’re looking to launch a successful campaign.

If you’re looking to run a PPC campaign that converts, here’s the rundown of everything you need to know to get a successful campaign that costs less, and gets you more!

What is a PPC campaign?

PPC is an acronym for pay-per-click and is one of the models of search engine marketing. With PPC campaigns, you can “buy” visits to your website or application instead of getting these visits organically. A PPC campaign is a digital ad campaign in which your ads are pushed to be shown to your target audience, and as the advertiser, you would be charged a fee for each click your ad gets.

What is ROI?

ROI is short for return on investment, and it’s a way to measure how efficient or profitable a certain investment you’ve made is. It’s measured as a ratio between the net income an investment makes and the amount of money spent on said investment.

Your marketing activities could have different ROIs measured against it to check their efficiency. For example, your social media accounts could have their own ROI separate from your PPC campaign’s ROI.

How to calculate PPC ROI

There are three main methods you could calculate your PPC ROI depending on your business goals and targets:

Method 1: Return on Ad Spend

While a lot of people in the marketing field refer to return on ad spend as ROI, the two metrics are usually different ratios.

Your return on ad spend, or ROAS, is your PPC revenue minus your PPC cost, and then divided by your PPC cost again. The amount is usually displayed in percentages.

For example, if the revenue from your PPC campaign is 1000 GBP, and the amount of money you’ve spent through clicks was 500 GBP, then your ROAS is calculated as follows:

(1000 GBP – 500 GBP) / 500 GBP = 1.0 or 100%

Method 2: Return on Investment

The more traditional way to calculate your ROI, this method is calculated with the exact same formula as ROAS. What’s different isn’t the formula itself, but what metrics are being measured. To calculate ROI, you’d calculate ALL costs incurred in an ad campaign besides the clicks.

To sell a product, there are other costs associated with manufacturing or shipping the product, as well as credit card processing fees and returned goods fees. This method calculates all of these factors and all of the costs incurred against your PPC campaign revenue.

Method 3: Profit Per Impression or Profit Per Clicks

This method takes a more comprehensive approach into calculating your ROI. Instead of calculating how much profit you’re making through your general campaign, it calculates how well your ads are performing against specific performance metrics, allowing you to identify ways to improve it and to conduct tests.

To calculate your profit per impression, divide your total profit by the amount of impressions your ad has gotten. To calculate your profit per clicks, divide your total profit by the amount of clicks your ad has gotten.

How to improve your marketing ROI

Here are three hacks that you can use to almost instantly improve your PPC campaign’s ROI:

1. Target the right audience

Spending money to target as many people as possible is a recipe for a bad campaign, and a waste of your hard-earned money. Ask yourself what kind of people would want to see your ads, and what kind of people would be interested in purchasing your product.

List the different audiences that could be interested in your ad, and break them down to more specific segments. To better identify the right audience for your campaign, set up multiple campaigns targeting different audiences, and check which one performs better.

Once you’ve identified the ads that performed better, you’ll know who your target audience is. Using this method, you’ll be able to target the right crowd and set up highly-targeted ads that generate more revenue.

2. Run ads at the right time

For PPC campaigns, timing is everything. It doesn’t matter if you’re showing your ads to the right audience if they’re in no mood to click or view them.

Test ads at different times throughout the day and see if there’s a pattern or a specific time of the day where these ads perform better.

Besides the time of the day, test different days throughout the week, or different periods throughout the year. For example, an ad for a sweater might perform better around fall than it would around summer.

Collect your data from ads run at different times and identify what times work best for each ad. Once you know what times work best, you’ll be able to schedule and standardize your ads for maximum clicks.

3. Use the right keywords

Keywords not only help your written ads be discovered by the right people, but they also catch your audience’s attention to get you clicks.

Find out what keywords work best by looking into what words are commonly used to describe your product, and what your audience might be searching for. Look at the keywords your competitors are using and use tools such as ubersuggest to find out what keywords would work for your ads.

Depending on what form of ad you’re displaying and what format it’s in, you can bold and highlight certain keywords to make it stand out more.

Any pay per click campaign has a lot of potential, but without testing, your campaign may not be getting utilized correctly and you might be spending more money than you should be. Having a comprehensive understanding of what performs better, measuring your ROIs regularly and following the best practices when it comes to PPC will save you a lot of time and money, and in turn generate more leads and conversions. Pay attention to your campaign, and test different aspects of it to make sure it’s optimised and bringing you as many sales as possible.