Pay Per Click advertising, PPC, paid search engine marketing, sponsored search results or whatever you call it is still a great way of attracting targeted traffic to your website.
Internet Marketing is becoming more and more localized as customers are increasingly searching for products and services in their own geographic location.
When talking to people about PPC advertising I often have people say that it’s too expensive for the results they’re getting and that PPC doesn’t work! Granted, if not done correctly PPC can become expensive with limited or no results. On the other hand if done correctly PPC can be very effective and is more cost effective and produces better results than more traditional marketing strategies.
I’ve included a GREAT Profitability Calculator below that I use in my business, WSI, that’ll help you decide if PPC can be profitable in your particular situation. It’s also a great way to test different scenarios.
Depending on your industry, clicks can cost anything from $0.05 to $5.00 or more. Use Google’s Keyword Tool to get an idea of what keywords are appropriate for your industry. The cost of getting clicks however is only part of the picture. What we need to concentrate on is how much does it cost to bring a new customer into your business.
As soon as we ask this question the focus changes from how much do clicks cost to how profitable can my PPC advertising be? Other factors like conversion rate (how many visitors to your site become customers) and the lifetime value of a client (how much profit does a client contribute to your business) become important. Taking these factors into account gives you a much clearer picture of how Profitable your PPC campaign can be.
PPC Profitability Calculator
To enter your information:
- Double-click inside the rounded value boxes and/or use the up and down arrows to adjust the values.
- Start by inputting your monthly ad budget
- Input average profit per sale
- Input your conversion rate (the % of visitors to your business who actually make a purchase).
If you don’t have the exact figures just use your best guess. It’s also a great way to get an idea of what the effect on your ROI would be if certain variables were to change.
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Good for people to know.