Projecting the ROI of Your PPC Campaign

PPC advertising, unlike social media marketing, is not free and requires a significant upfront investment for testing and optimizing to create a profitable campaign. Projecting the ROI of Your PPC CampaignFor this reason, many marketers have to justify the expense and long-term value of running a PPC campaign. This isn’t anything new since PPC has been a marketing tactic for the past decade—but how ROI is measured and presented to management has evolved alongside innovations by the PPC publisher you choose. Below are some considerations to help with forecasting the ROI of a PPC campaign.

  • View-through tracking: 10 years ago it wasn’t possible to see if a person had viewed an ad, not clicked, and then went directly to the website by typing it in or searching online. But the sales from these “view-throughs” should still be traced back to the PPC ad campaign which will increase the projected ROI. Before, those conversions were being attributed to the wrong source. Now a marketer can correctly show that the ad campaign influenced the purchase.
  • Attribution tracking: On top of the view-through tracking, marketers can now see all the touch points that were required before the customer converted. Did they click an ad, visit the Facebook page, and then do an organic search for the product name? While it is more difficult to attribute the sale to one source, it is powerful to know the typical path before people make a purchase. How many touch points are required? By showing that PPC was one of them, you can show it had a positive influence on conversions.
  • Micro-targeting: The ability to target extremely specific demographics and profiles allows a marketer to drive down the PPC expense and drive up the conversion rate. Explain how the campaign doesn’t need to display ads in front of a mass audience when you can target the audience that wants what you have. This can be shown in a projected ROI report where a side by side comparison is done between the cost-per-conversion for non-targeted ads vs. targeted ads. It should look something like a CPA of $100 for non-targeted vs. $10 for targeted. Note: it isn’t good to get in the habit of over-targeting because the campaign will miss out on unexpected conversions and not be able to identify new target customers that hadn’t been thought of before.
  • Low/high projections: Management doesn’t want to see extremely optimistic ROI projections, and the marketer shouldn’t want to build up expectations too high. Instead, the marketer should make calculated ROI projections for both a low and high estimate. What will the success of the campaign look like at worst and at best? For example, by changing the conversion rate from 1% on the low end to 2% on the high end, the ROI projections will vary greatly. As long as the 1% is a feasible worst-case scenario that the marketer is confident they can achieve, the PPC campaign should be pursued.
About Sam Alkas

Sam Alkas is an small business entrepreneur that has over 12 years experience in helping start and manage small business ranging from SEO companies to bakeries and loves to share some insights on what he's found over the years.