ROI from PPC Campaigns

WEBINAR

Measuring ROI from your PPC campaign

Presented by Sam Shetty Sept 2012

Agenda

■ Where does your website get traffic from ?

■ Is PPC right for your company ?

■ Calculating CPA

■ PPC Budget

■ Better ROI

■ Tips on improving ROI

■ Should I outsource my PPC ?

■ Q & A

Which one is right for me ?

What will drive my traffic ?

*Via Forrester’s

Interactive Marketing

2012 Report

Is PPC Right

For Your

Company?

Is PPC right for your company?

• Two basic ways people end up making money with their websites.

• They sell something or they get a lead who eventually they can sell something to.

E-commerce

• When people search for a product your selling, having a PPC ad will ensure buyers find you.

• E-commerce sites are the most frequent users of search engine marketing.

• Ingredients for Success:

– Need a comprehensive keyword list for each product

– Implement conversion tracking

– Need proper landing pages

– Manage inventory against ads running

– Offer guarantees or special offers

Lead generation

• Using paid search for lead generation helps you find sales prospects who are interested in your service or product.

• Ingredients for Success: – Need a comprehensive keyword list for each product or service

– Implement conversion tracking

– Need proper landing pages

– Strong lead generation form

– Offer an incentive

– Make it easy to contact you

Branding

• Branding campaigns are for people looking for traffic without a specific call to action for visitors to take. It’s lacks the measurability of lead generation and e-commerce.

• Ingredients for Success: – Use local targeting if applicable

– Bid on your company and brand names

– Create landing pages where appropriate

Branding

Measurable

• Paid search is measurable from start to finish.

• Advertisers can track what keywords are being searched, clicks and if a buyer purchased a product from the click.

• Impressions: Each time the ad is viewed.

• Cost-Per-Click: The cost for each click generated.

• CPA: The cost per action – how much does it cost to get someone to take an action

Traffic

• A well executed PPC campaign sends targeted traffic to your site.

• Plus, sites that rank both high in Paid and Organic results receive more clicks.

Brand Recognition

• Increased impressions with paid search results. If they see your ad even if they don’t click, they have increased awareness of your company.

• However, a word of caution: Having ads with high impressions and a low CTR will result in a decreased Google Quality Score.

24/7 Advertising

• Paid search ads start running immediately and continue to run 24/7. Potential buyers or customers will always be able to find you.

Precision

• PPC advertising has advanced controls:

• Day-parting: You can choose to have your ads run only at certain times during the day.

• Geolocation: You can target your ads to run in certain locations only.

Show me the money

• So how much can you afford to spend?

Let’s figure out your Cost Per Action (CPA.) This is where an advertiser pays for each specified action (a purchase, a form submission, and so on) linked to the advertisement.

Conversion Tracking

• How it Works: Conversion tracking places code onto your site. Once the code is applied, conversion tracking places a cookie on a user's computer when he or she clicks on one of your ads.

Then, if the user reaches one of your conversion pages, the cookie connects to your web page and conversion tracking records a successful conversion for you.

Calculating your target CPA

1. Determine Your Conversion Rate

2. Calculate Your Gross Profit

3. Calculate Your Target CPA

4. Calculate Your Net Profit

5. Determine Maximum CPC

Figure out your conversion rate

• Conversions / Site Visits = Conversion Rate

• If a site received 4,000 site visits in a month, and generated 80 conversions, the conversion rate would be 2%.

• 80 / 4,000 = .02

Calculate your Gross Profit

• Sales Price – Cost of Product = Gross Profit of Product

• So if your sales price is $125 and your cost to build the product is $65 then your gross profit is $60.

• $125 - $65 = $60

Calculate your target CPA

• Sales Price * Sales & Marketing Cost % = Target CPA

• So if you’re sales price is $125 and your sales and marketing margin percentage is 15%, your target CPA, including promotional costs, is $18.75.

• $125 * .15 = $18.75

Calculate your Net Profit

• Gross Profit – Target CPA = Net Profit

• So if your gross profit is $60 and you subtract your target CPA of $18.75 then your net profit is $41.25.

• $60 - $18.75 = $41.25

Determine Maximum CPC

• 100/(100 * Conversion Rate %) = Required clicks to generate a conversion

• So if the conversion rate is 2%, then you’ll need 50 clicks to get a conversion.

• 100/(100 * .02) = 50

• To calculate the maximum average cost per click your campaign can have, take your target CPA and divide it by your required clicks.

• Target CPA/Required Clicks = Max Avg CPC

How is Quality score calculated ?

What does quality score influence ?

Getting on top of paid listing

Budget

Custom Budgeting

• Every business has a different budget and needs.

• PPC advertising allows you to specify how much you want to spend on any given day or month.

• Custom budgets tailored just for your business.

Fixed and self-funding budgets

• A fixed budget establishes a fixed amount you spend on PPC.

• A self-funding budget is based on your ability to fund your PPC campaign by meeting specified sales goals.

Achieving

Better ROI

The “Brakes” in PPC

What to do when your campaign isn’t working:

1. Keep an Eye on Costs

2. Not All Clicks Are Equal

3. Know When to Stop Spending

4. A/B Test

Watch your Google Quality Score

• The historical CTR of the keyword and the matched ad • CTR of all the ads and keywords in your account • The historical CTR of the display URLs in the ad group • The quality of the landing page • The relevance of the keyword to the ads in its ad group • The relevance of the keyword and the matched ad to the

search query • Your account's performance in the geographical region

where the ad will be shown

• The higher your Quality Score, the lower your costs and the better your ad position.

Investigate Long-Tail Keywords

• Long-tail keywords are three or more words.

• Traffic from long-tail keywords convert at a higher rate, and have a lower CPC, since demand for the keyword is lower.

Good PPC = Good ROI

• Chances are, the better your PPC, the better are your ROI. Keep these tips in mind.

• Analyze the Data

• Use Negative Keywords

• Exact Match Over Broad Match

3 Types of Landing Pages

Before creating a landing page….

• Business objectives

• Know your audience

• Visitor action

• Entry points

• Technical limitation of your target audience

• Check domain name availability

• Competitive analysis

Optimising your landing CTA

• Make your CTA(s) clear and unambiguous

• The bait and switch

• Amazing! Awesome! Kick-Ass!!!!

• Breathing room

• Keep it where it can be seen

• Personalize/localize the call to action

• Reduce the available options

• Be audience appropriate

Tips on improving ROI

• Run a negative keyword campaign

• Spread media across Google, Yahoo & Facebook

• Focus on Display ads , remarketing campaigns

• Location, Location , Location

• Make an offer they can’t refuse

• Utilize long tail keywords

• Timing is everything

• Home page is not a landing page

• Quality score is key

• Monitor it regularly ( Keep on testing …)

Is PPC right for me ?

• Does your business have a unique selling point ?

• Do you stock products ?

• Do you need to feed your sales team with leads ?

• Low cost of lead acquisition

• Do you need to measure ROI ?

• Ability to focus on specific locations , time zone

• Ability to change your marketing message daily

• Better conversions

Should I outsource PPC ?

• Campaigns needs to be monitored regularly ?

• Big budget and multiple search engines

• Ability to focus on quality score, conversion rates ?

• Ability to create landing pages ?

• Ability to identify Long tail keywords ?

• Using a better PPC bidding platform ?

• Can you afford to spend 10 hours a month?

How much is 10 hours of your time worth ?

Conclusion

• Q&A

• Request a free Consultation for your website

• Thank you !!!

• Sam Shetty sam.shetty@netregistry.com.au