Here are 5 ways that I use my Online PPC ROI Calculator to help increase the ROI of my PPC campaigns with Pay Per Click advertising such as Google Adwords, Yahoo Search Marketing. Incidentally, this article is my submission for the ProBlogger Top 5 Group Writing Project.
The first thing that we need to do is select a product to advertise for our PPC Campaign. Since this is about PPC, I’ll use Keyword Elite as the product.
- Find out the variables for the product. We need to get the amount we will earn per sale and the conversion rate. In the case of Keyword Elite, we will be earning $97 per sale. But we don’t have access to the conversion rate, so let’s err on the side of caution and say that it is 1%. This means that for every 100 visitors to the sales page, we will sell 1 copy of Keyword Elite. We can now enter 97.00 into the Amount Earned per Conversion field and 1 into the Conversion Rate field of the calculator.
- Next complete the Number of Clicks and CPC (Cost per Click). Let’s say that we are going to test that 1% conversion rate by buying 100 clicks at $0.50 per click. Now push the Calculate PPC ROI button to get the results. For data we have entered we get a ROI of 86%. This means that for every dollar that we put into our PPC campaign, we get $1.86 back. Which is not too bad really.
- Now lets find what the break even investment amount is. To do this you need to tweak the CPC (Cost per Click) field until you get a ROI of 0%. To save you time, I will tell you know that the break even CPC for this case is $0.93. So that means that you can safely bid up to 93c and in theory you will not lose any money.
- You can now start getting creative with your numbers. If you can increase the conversion rate by 1% by improving your ad copy, you will see that for CPC of $0.50 your ROI is going to increase to 272% – i.e. for every dollar you spend on advertising, you will get back $2.72 or an net profit of $136.00 on a spend of just $50.00. So that shows us that we should definitely be working on our ad copy!
- The next step is to test, test, test with different configurations of variables. Use the calculator to help you construct your ad campaigns, find products that are worth promoting and avoid products that are going to send you bankrupt.
Finally, please leave a comment to let me know if the calculator is not working properly or whether you can think of any enhancements to make it more useful for you. Now go out and make your fortune with PPC Affiliate Marketing!
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