Maximize Return-on-Investment with PPC Advertising

[eclickz]

A key factor when choosing a pay-per-click (PPC) network and beginning an advertising campaign should be the return on investment (ROI). There is an old adage that says you have to spend money to make money. While true, it is also true that you can spend more money than you make and put yourself out of business if you cannot measure the effectiveness of your advertising. Simply put, ROI is a measure of how much return (profit) you make on a given investment (advertising dollars).


The definition from Wikipedia say's:

In finance, rate of return (ROR), also known as return on investmentROI), rate of profit or sometimes just return, is the ratio of money gained or lost (realized or unrealized) on an investment relative to the amount of money invested. The amount of money gained or lost may be referred to as interest, profit/loss, gain/loss, or net income/loss. The money invested may be referred to as the asset, capital, principal, or the cost basis of the investment. ROI is usually expressed as a percentage rather than a fraction.

Let's say you do search advertising on Google AdWords or Yahoo! Search Marketing that costs $10.00 per click to be in top position. Paying this amount could cost you $10,000/day. Just because somebody is bidding this amount does not mean they are profiting - in fact, many lose a lot of money quickly on AdWords or Yahoo! Search Marketing and then give up on Pay Per Click networks. Of course, there’s always enough new people flocking to these networks all the time that drive up the price per click and make it unprofitable. That $10/click may very well be profitable but how can you know unless you measured that after every 10 clicks you made a $100 sale or some other metric?

An opposite extreme is a top-tier PPC network like eClickZ which is relatively new and many of the keyword bids are quite still low, allowing you to easily secure #1 positions. You pay $0.05 per click for the same term you would have to pay $10 per click on Yahoo! Search Marketing or Google Adwords.


Some great sites I recommend for effectively measuring your ROI are:


1. Google Analytics - Sign up for your free account
2. Clickable


Once you begin measuring ROI with either of the above services you will better be able to tell which ad networks work best and which campaigns within those ad networks work. This will help you better determine how to price your keywords and whether to give up on some campaigns to maximize ROI. I was actually pleasantly surprised recently to see how great ROI was on the eClickZ network. Results vary so measure ROI for your own ads.

Nadir Patel
Forum Moderator
eClickZ Pay-Per-Click Search Engine