Pay Per Click ROI
ROI or Return on Investment is a metric that allows you to measure the effectiveness of your marketing by mapping sales against cost of acquisition.
With the correct monitoring you can tie each sale on your website to a given marketing activity, which can help in determining where to spend your money to get the best results.
Take the following example
| Search Engine | Keyword | Bid (£) | Clicks | Budget | Spend | Sales | Sales Totals | Profit | Conversion Rate | ROI |
| Lawn Mowers | £00.20 | 600 | £200.00 | 120 | 30 | £3000.00 | 750 | 5% | 6.25% | |
| Yahoo | Lawn Mowers | £00.20 | 900 | £200.00 | 180 | 2 | £200.00 | 50 | 0.002% | 0.27% |
| MSN | Lawn Mowers | £00.20 | 1000 | £200.00 | 200 | 50 | £5000.00 | 1250 | 5% | 6.25% |
As You can See from the above example of some “Pay Per Click” results, Google and MSN are performing much better than Yahoo. If all other factors are the same, such as the advertisement text and the ad is appearing in a similar sort of position in the “Pay Per Click” results list, then you could move your budget from the Yahoo campaign to the MSN campaign as it hits its monthly budget.
Having all the data at your finger tips that lets you know exactly where and when orders come from, you can make informed decisions on the best way to use your marketing budget. In the above example you could try rewording your advert on Yahoo first to see if you could convert a greater percentage of the 900 clicks that Yahoo sent to your site. Sometimes different search engines have totally different demographic profiles for their users so it’s always worth trying different advertisement copy first.
