Continuing our back-to-basics series, we will be talking about more of the PPC metrics that can be used in determining the success of your campaigns.
If you missed the first post of our back-to-basics series, we talked about some other PPC metrics. Clicks, cost per click (CPC), click-through rate (CTR), and quality score. Click here to check that out now!
Your Conversion Rate refers to the percentage of conversions that occur out of the total number of clicks an ad receives. A conversion takes place when a potential customer performs an action you have set. This can include anything from filling out a form or making a phone call to completing a sale.
To calculate your conversion rate, divide the number of conversions that occurred by the number of times an ad was clicked.
Cost per Conversion
Cost per Conversion refers to the average amount it costs for each conversion that is received. In other words, how much does it cost for your business to gain each new customer?
To calculate the average cost per conversion, you will need to divide the total cost for all clicks by the number of conversions received. This can also be referred to as the cost-per-action.
Conversion Value refers to the monetary value you can assign to each action performed or conversion. This is done as certain actions can be considered more beneficial than others based on their worth to your business. Using conversion values, you can optimize your campaigns for the highest return on your investment.
Return on Investment (ROI)
Return on Investment (ROI) refers to the total amount of profit received after all expenses are paid, in comparison to the total cost of earning that profit. ROI allows you to take a look at the profits when everything is considered.
To calculate your ROI %, start by subtracting your expenses from your total revenue to calculate your profit, then divide by your total expenses times 100.
Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) refers to the average return on the total amount spent on an advertising campaign. This will tell you the average amount of revenue that is received for each dollar spent on an ad campaign.
To calculate ROAS, divide the total amount of revenue received from an ad campaign by the amount spent on the ad campaign.
Whether this is your first PPC campaign or not, you can always benefit from the help of the experts. Reach out today for a free consultation!