Increasing Your Return On Investment

Posted 17.01.2020

By Luke Pickering

Pay Per Click (PPC) advertising is a way of driving people to your website by creating targeted adverts. The idea is that when people search certain keywords on Google they will be presented with an advert for your website or product. For your Google Ads campaign, it’ll cost on average between £0.66 and £1.32 per click which isn’t a lot but it’ll start eating into your advertising budget if you’re not generating any leads or sales off of your adverts. So it’s your job to make sure that you’re converting those clicks into sales and maximizing your ROI. We’ve been speaking about your Return On Investment, but how do you actually calculate it? It’s a simple calculation, your ROI = Net Income/Cost Investment. For example, you spend £500 on your product and adverts and you get £1500 in sales your ROI would be 200%. But how can you increase your ROI?

Experiment Frequently

More likely than not your first PPC advert isn’t going to be the most effective it can be. We can guess what is going to be effective in 2020 but your best option is experimenting. In order for your business to accelerate its growth, you’ve got to test-and-learn. By setting aside a small part of your budget on each advert you can learn and find out what really works. The best way of doing this is by choosing one area of your website or business that you really want to focus on and concentrate on creating a highly optimised campaign. Run this ad, see how it performs and look at your analytics in Google Ads. How many sales did it convert? Then work out what you can change that would possibly drive more leads. If your advert didn’t do very well, don’t wallow in pity, take it as a learning curve to see what to change.

Avoid Vanity Metrics

People can get so wrapped up in very basic metrics like page views or followers but if these aren’t being converted into leads, or paying customers they don’t really mean anything. Would you rather have 1,000 followers and 256 sales or 10,000 followers and 78 sales? It’s simple, vanity metrics can have value but they’re not right when thinking about your ROI. That’s where you want to be looking at your engagement metrics. These are the important stats such as bounce rate, visit duration as well as downloads or sales. By saying that you had 40 people come onto your website it sounds good, but it’s when you look into how long they stayed on your site that’s the important part. If they only stayed on your site for a few seconds then they’ve definitely taken anything away from your site. But if they were on there for a matter of minutes you were obviously providing them with some kind of value and that’s a much more impressive statistic.

Choosing The Right Keywords

Choosing the right keywords is one of the most essential aspects to creating a well optimised PPC campaign. But it isn’t about adding the most keywords possible, it’s about adding the right keywords. If you start targeting keywords that aren’t very relevant you’re going to be driving traffic to your website which is unlikely to be interested in your business. This in effect can result in a high bounce rate, and a lack of engagement. This not only brings in a lower ROI, but shows to Google that your website has a poor UX, which will negatively affect your rankings. By streamlining your keywords you make your ads more specific increasing the quality score and effectively increasing your ROI as well. It’s very similar to social media, if you put every possible hashtag you can your campaign becomes less and less relevant; you want to make sure that your hashtags are right for your business. It’s important to capitalise on long-tail keywords, they’re the 3 or 4 keywords that are more specific, and generally have a lower search volume, making them less competitive. If people are searching for these specific words it means they are searching for exactly what they want to buy.

Running Ads At The Right Time

Targeting your audience is important but if you’re marketing to them at the wrong time it doesn’t matter how good your adverts are – your audience won’t be seeing them!. Everyone’s market is going to be different and there are going to be trends on when certain products sell at better times. Whether it be a certain time of the day or certain season it all plays into effect on how good your ROI is. If you’re running ads in the middle of winter for patio furniture for summer it’s probably not going to sell as well as if you do it late spring summertime when people are thinking about how they could do with a new garden table to eat the BBQ round. Or if you run a fast-food restaurant then you’ll probably find people will click on your ads more around meal times as that’s when people are thinking of either cooking food or ordering.

Spending Correctly

The average cost for clicks and conversions can vary widely depending on a variety of factors. But you’ve got to make sure that what you’re spending is viable for your business and the budget you have available. The average cost for a click can vary massively depending on your campaign.Factors affecting your CPC include your budget,, your keyword bid  as well as quality scores. Say you’re making 1 sale per 15 clicks and each click is £2.50 then you’re spending £37.50 per sale on advertising. So if your product is only going to sell for £15 your advertising is not worth how much you’re spending. But say you’re spending that much and each sale is £1000 now all of sudden your profit margin £962.50, which definitely seems worth it. So it’s all about knowing how much to spend so that you’re still in the green.

If you’d like help to improve your PPC campaigns ROI do not hesitate to get in touch either call us on 01332 493766 or get in touch here…

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