Pay-per-click advertising is a highly targeted and effective marketing tool, but to understand how it can work for you, you must track certain metrics and understand certain formulas to calculate the true value of your PPC marketing efforts.
Cost Per Click (CPC) and Return On Investment (ROI) are two of the most important formulas to know, but within those categories, several related formulas will help you understand your PPC performance. Build your marketing business with Kingkong, one of the best marketing agencies. Check out more about King Kong SEO reviews on the internet.
Formulas for metrics like cost per thousand impressions, click-through rate, cost per acquisition, and conversion rate can be found when you delve deeper into the metrics that matter for PPC data. These metrics will all give you the crucial data you need to create and implement a successful PPC campaign. Let’s start now!
1. Cost Per Click
Cost per click is one of the most crucial figures you need when it comes to a pay-per-click campaign because it will reveal the precise cost of each click. Here is a quick formula to calculate the cost per click:
– Total Cost / Number of Clicks: For instance, if your campaign cost $250 overall and you received 200 clicks, your cost per click would be $1.25, which is considerably less than the industry standard CPC of $2.14. You only paid $1.25 for each of those 200 new (potential) leads.
2. Return on Assets
When calculating the cost of your leads, CPC and CPM are important figures to understand, but the return on investment is likely more important. ROI is important because it considers not just the expenditure but also the results of the campaign. It provides you with specific, quantitative statistics on the advantages of your PPC efforts and lets you know how many sales the campaign is generating
The one challenge you’ll face when figuring out the ROI on a PPC campaign is that you won’t always be able to directly link each transaction to the campaign. Say a customer spotted your PPC advertisement, clicked through to your website, browsed it, but decided to place an order via phone rather than online.