SEM: Measuring Up
Average Revenue x Conversions - Amount Spent = ROI
The average ROI can vary from industry to industry, but you always should be in the positive. For example, if the average revenue generated by each visitor is $10, your conversions are approximately five and the amount spent for your advertising campaign is $25, this yields an effective and ideal ROI of 100 percent.
Refining Additional Campaign Factors
If you notice that your ROI is not on par with desired levels, give your campaign a check-up in three key areas to spark instant improvements.
1. First, in terms of budgeting, keep in mind you don’t need to have an extensive budget to start or run a PPC campaign. To determine if you are bidding appropriate amounts for each keyword, ask your PPC provider to provide you with its network stats as they relate to your industry. This type of information will help to determine what to bid for keywords. After initial bids are set and analyzed, increase bid prices on performing keywords only.
2. Create and track keyword buckets. Keywords included in these buckets should be very specific and extremely relevant to your product or service. Many common mistakes related to relevancy occur when choosing keywords. For example, marketers often submit keywords that could encourage a high volume of users to click on their ad(s)—such as “mortgage”—instead of choosing keywords that specifically target users interested in purchasing their product(s) and/or service(s)—such as “mortgage refinancing calculator.”
Continually update your keyword buckets, and if a bucket or individual terms are not relevant or not performing, remove them.
3. Consider revising your offer or unique selling point (USP). Many marketers make the mistake of initially creating great copy for their ad campaign, but then never updating or changing it. If you notice clickthroughs or conversions dropping, try updating the offer and/or USP in your copy. You need to keep it fresh, just like you would for any other form of advertising, such as banners or print.