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You’ve been told that running a pay-per-click (PPC) advertising campaign is the quickest way to get results. Identify some keywords, fund your accounts, set up ads, activate the campaign, and wait for results. Well, unless you’ve got the PPC ROI properly estimated, you could end up with a hefty bill but with little earning to show for. If you want to see a positive ROI with your PPC campaigns, you can always consult ppc agency Singapore like Heroes of Digital for advice. Anyway, let's continue our discussion, shall we?
A PPC campaign could go south pretty quickly if you don’t have a proper strategy or engage a good PPC agency. Each keyword that you’re bidding is different in the potential traffic, cost and competitiveness. This means that you’ll be paying a different fee for the keywords each time a visitor clicks through.
The question is, are you getting your money's worth for each of the clicks?
Remember, every business is different in terms of products value, conversion rate, and profit margin. You’ll want to better understand how profitable a PPC campaign is before it goes live. That’s where a PPC ROI calculator comes in handy.
Using our PPC ROI calculator can make a difference in your business’s campaign. By putting together a few key metrics, the calculator can project whether you’ll eventually be profitable or causing a loss with the campaign.
As a leading PPC agency in Singapore, we’ve come across various clients that struggle with their ads campaign. Prior to engaging our service, most of them grapple with the various metrics that will determine the ROI of the ads.
Business owners turn to spreadsheets and key in multiple probabilities of the campaign or subscribe to expensive tools to get the job done.
We understand that not all are familiar with the fundamental metrics that influence PCC ROI or the formula that puts them together. Hence, we’ve created a FREE ROI Calculator. It’s a simple, intuitive web application that lets you estimate your campaign’s ROI by tweaking the relevant metrics.
With the PPC ROI calculator, you don’t have to go through the gruelling process of manually entering PPC metrics just to get an estimate of how much you’ll earn or lose. Getting an ROI is as simple as adjusting the metrics with the slider.
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A few adjustments on the sliders are all it needs to get you the projected results of your campaign. Our PPC ROI calculator provides the following results:
The result then serves as a benchmark when your ads go live. In addition, it provides better control over your budget, and you’ll get to know if the campaign is underperforming.
Advertising platforms like Google and Facebook aren’t going to send you traffic for free. You’ll either need to take the slower path of SEO or the quicker route of paid campaigns. Paid campaigns bring leads to your business almost instantly, but it comes at a cost.
The PPC ROI calculator is a versatile tool that comes in handy regardless of whether you’re yet to set up a PPC campaign or managing existing ones. It allows you to quickly estimate if a campaign is profitable based on the selected metrics.
Business owners who are new to PPC advertising are often overwhelmed with doubts when setting up their first campaign. They’re worried if they’re bidding for the right keywords, the conversion rate and whether they'll be losing money from the ads.
Such worries are understandable because the key to a successful PPC campaign is constantly tracking, analysing, and making changes to the ads. Using the PPC ROI calculator puts things into perspective early on. It enables business owners to set up ads campaigns based on data-driven calculation and not mere guesswork.
Our free PPC ROI calculator is equally helpful for experienced ads managers. Even if you already have the ads set up and running, you’ll always want to continuously improve on the ROI. This means making quick projections on keywords with different CPC or identifying keywords with low conversion rate or profit margin.
Our PPC ROI calculator is designed so that you can quickly estimate the results of your campaign with minimum fuss. It’s a single-page web tool that you can access from this link.
When you’re on the page, you’ll find that the calculator is presented into columns of metrics and results. The metrics can be adjusted with the sliders, and the results are immediately updated.
Here’s a brief explanation of the metrics involved in the PPC ROI calculator.
This is your monthly budget that funds the PPC campaign. It’s the amount of money that you’ll pay for clicks generated through the ads. Ideally, you’ll want to set a minimum of $1,000 for an effective campaign.
Cost-per-click or CPC is the amount of fee you’ll pay for ads targeting specific keywords. If you’re advertising on Google, you can find the CPC with the keyword planner.
Depending on the keywords, the expected cost per click may range between $2 to $8. Short tail keywords, which are competitive, are usually more expensive than their long-tail counterparts.
The target conversion rate is an estimate of how many users will be clicking on your ads when they come across them.
Depending on your industry and keywords, the conversion rate differs. If you’re targeting highly competitive keywords, your conversion rate could be in the lower single-digit range.
On the other hand, branded and specific product keywords may result in a 10% conversion rate or more.
This metric is an indication of how much a customer usually spends on your business. It’s unique according to the types of business. Even if you’re selling low-ticket items, the average sales price can be a large number.
For example, customers may purchase several items from a stationary online store, or you enjoy recurrence sales from the same customers.
Not all clicks will result in a paying customer. Sales conversion for a PPC campaign is measured by seeing how many leads convert to an actual paying customer, also known as lead to customer rate. Again, this metric is unique to the type of business.
An e-commerce store has an average lead-to-customer rate of 1% to 3%, while a service-based business ranges 20%-30%
When you’re starting a new campaign, you’ll need to go through the process of creating an ads account, identifying the target audience, keyword research, planning the budget and drafting the ads.
With our PPC ROI calculator, you can pre-determine the ads budget and results right when you’re conducting keyword research.
Here’s how it works.
1. Open our PPC ROI calculator and set your ads budget. For this example, let’s set a budget of $5,000 per month.
2. Go to Google keyword planner and identify keywords that are relevant to your products. For example, a coffee machine seller will be searching keywords like ‘espresso machine’.
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3. The term ‘espresso machine’ has a high-range bid of $1.95. Now, set the expected CPC to $2, which is the closest to the maximum bid value.
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4. The term ‘espresso machine’ is rather generic, and a target conversion rate of 10% is quite optimistic.
5. A high-end espresso machine costs around $500. Set the Average Sales Price accordingly.
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6. If you’re running an e-commerce store, you’ll have a lead-to-customer rate of 5% on average.
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7. Based on the above metrics, you’ll have an estimated ROI on the ads spending.
The entire process of estimating the PPC ROI takes seconds if you have the metrics in hand.
Now, it never hurts to improve on an existing campaign. For example, getting an ROI of 25% isn’t exactly impressive. To get the best of your campaign, use the ROI calculator when you’re trying out a different strategy.
For example, the keyword ‘espresso machine’ is overly competitive, hence the high CPC. You can target a keyword that’s more specific for your product page. Instead of ‘espresso machine’, the keyword ‘delongi magnifica’ has a lower CPC.
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The product also sells at a higher price of $700. A product-specific keyword is more likely to have a higher conversion rate.
To find out if targeting the ‘delonghi magnifica’ offers a higher ROI, use the calculator and adjust the existing metrics.
1. Reduce the expected CPC to $1.
2. Adjust the target conversion rate to 15%.
3. Increase the average sales price to $700.
4. By targeting a different keyword, you’ll have an estimated ROI of 425%.
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Having a large war chest for your PPC campaign doesn’t guarantee success. Instead, you’ll want to be wise in how you spend the money for your ads. Using a PPC ROI calculator allows you to quickly project results, particularly if you’ll be making a profit with your strategy. It allows you to make changes on the go without tedious calculations.
If you’re not getting the intended results for your PPC campaign, feel free to reach out to Heroes of Digital. As the leading PPC agency in Singapore, we’ve helped various clients to produce positive PPC ROI, and we’ll be glad to do the same for you.
Also, check out these interesting reads that’ll help you to optimise your ads campaign.
