How to Calculate Your PPC Advertising Return on Investment

3 min read

As the renowned marketing expert Philip Kotler once said, “The best advertising is done by satisfied customers.” The same can be said for Pay-Per-Click (PPC) advertising, which is currently one of the most usefull types of digital advertising.

PPC marketing is a practical technique to boost the online visibility of your business and attract targeted visitors to your website. However, to make the most of your PPC advertising budget, it’s important to calculate your PPC advertising ROI. Here’s an insight into how you can do just that.

What is PPC advertising?

PPC advertising is a form of digital advertising that allows advertisers to place ads on search engine results pages, social media platforms, and other websites.
Advertisers only pay when someone clicks on their ad, hence the name pay-per-click advertising.

Why calculate your PPC advertising ROI?

Calculating your PPC advertising ROI allows you to determine the effectiveness of your advertising campaigns.
It also helps you identify areas where you can improve your campaigns to generate a better return on investment.
By measuring your PPC advertising ROI, you can make data-driven decisions about how to allocate your advertising budget.

How to calculate your PPC advertising ROI?

To calculate your PPC advertising ROI, you need to know your advertising costs and your revenue generated from your advertising campaigns. Here’s a step-by-step guide to calculating your PPC advertising ROI:

Step 1: Determine your advertising costs

Your advertising costs include the amount you spent on your PPC advertising campaigns, total amount spent on campaigns. such as the cost per click, ad creation costs, and any management fees you paid to your PPC agency.

Step 2: Calculate your revenue generated from your PPC advertising campaigns

Revenue generated from your PPC advertising campaigns includes the amount of money you earned from sales generated by your ads, as well as any other value/revenue generated from conversion actions you tracked, such as form submissions or phone calls.

Step 3: Subtract your advertising costs from your revenue generated

To calculate your PPC advertising ROI, subtract your revenue from advertising costs. Then, divide that number by your advertising costs to get your ROI as a percentage.

Tips for improving your PPC advertising ROI

To improve your PPC advertising ROI, consider implementing the following strategies:

Improve your ad targeting to ensure you’re reaching your ideal audience
Optimise your ad copy and landing pages to improve your conversion rates
Test different ad formats, such as video or display ads, to see what works best for your audience
Landing page AB Testing to improve conversion rate
Set clear goals and track your progress towards them to ensure you’re making progress towards your objectives

Calculating your PPC advertising ROI is an essential step in performance marketing. If you need help with your PPC advertising campaigns, IKF is a performance marketing company in Pune that can help.

As a leading performance marketing agency, we have the expertise and experience to help you achieve your digital marketing goals. Contact us today.