If you’ve ever dabbled with a pay-per-click (PPC) campaign, then you know how ridiculously easy it is to quickly feed your entire marketing budget into the system. When you first started with the campaign, you were probably wowed by the instant jump in your website traffic. Before you get too excited though, you need to ask yourself a very important question – is your PPC campaign actually working?
What is Your Conversion Point?
Behind every successful marketing campaign is a clear, strategic goal. You need to know exactly what you want to accomplish before you ever feed your first dollar into the Google Adwords machine. Getting “people” to your website is too generic of a goal. What people?
You want your people to go to your site, and you want them to take some sort of action. This action is your conversion. A conversion can be as direct as buying a product off your site or submitting a request form for a consultation. It can also be more subtle, like signing up for your email list or downloading your ebook.
Assign a Value to Your Conversion
Identifying your primary conversion point is only the first half of the PPC equation. You also need to know how much a conversion is worth to you so you can determine whether or not your PPC campaign is bringing you more value than it costs.
A website sale conversion is simple to calculate. If you earn $20 in profit for every gizmo you sell on your website, then each conversion is worth $20. Many times, calculating a conversion is less clear. How much is a consultation request worth or an email signup? You won’t be able to be entirely precise, but you can make some educated estimates. How many consultations turn into clients? What is the average value of that client? If you are able to turn 25% of consultations into a new job, and the average value of each job is $2,500, then each conversion (a consultation) is worth $625.
Now Put it all Together
Okay, let’s put the pieces of the puzzle together. You know what your conversion is and (roughly) the value of each conversion. Now it should be easy to tell if your PPC campaign is actually working. If you have your website analytics set up correctly (see our Google Analytics services), you should be able to expertly track how many conversions come from your PPC campaign. Add up the value of your conversions and compare that number to the cost of your PPC campaign. If all is going well, you should be earning more from your conversions than you pay for your PPC campaign.
Let’s say you spent $500 on your PPC campaign in January and 67 people who came to your website via the PPC campaign purchased your mousetrap. We know that you earn $20 in profit from each mousetrap, so your $500 PPC spend netted you $1,340 in profit. Not bad! Now that you have a metric to compare, you can start tweaking your PPC campaign and your conversion funnel to try and increase your profitability even more!
There’s Always Room for Improvement
In our highly analytical world, there is always room for improvement in the PPC arena, which is what makes PPC management such an exciting and rewarding job. If all this is starting to make your head spin, keep the fundamentals in mind:
- Identify your goal (aka, a conversion)
- Assign a value to your goal
- Ensure that you are gaining more value than you are spending on your PPC campaign
We nail down the perfect strategy for you, we tweak the headline of your landing page and figure out the right A/B test for your ads that’ll give you useful info about your audience right off the bat.
If you’d like to move your PPC campaign to the next level, contact us for a free pay-per-click consultation.