Ping THIS!Make Money With Adwords: How Do You Measure Adwords Return Of Investment?
Recently i met some old friends who is running some online business from all kind of markets, and they started some campaigns in Adwords, there’s ONE “serious” thing i learned from them after the meet-up, which i think is very important in your online business, especially those people who are focused on “make money with Adwords” market.
The million dollar question is..
>> Are you aware of your Return Of Investment - ROI of your advertising?
>> Which is, if you spend $10 in your Adwords campaign, how much would you get back in your business?
>> A simple example would be, $50 revenue from $10 spent in Adwords campaign, means it’s 400% in ROI,resulting in $40 net profit.
If you don’t know how much you are making after spending certain amount of money in advertising, then you are seriously putting your business at risk, no matter how small or how big your business is. Would you agree with me?
You need to know those details.
For me, i would track the number of clicks, Adwords cost, and Sales and determine if i want to measure the ROI daily or weekly, or even monthly. You just find what works for you and stick to those.
And usually i would do a monthly average for my campaign. This is kind like monthly report, most MNC would also do this in their multi million or billion businesses!
Once you know all these information, it’s easy to decide if you want to increase your bid, drop your bid, change the keywords and anything else to optimize your campaign, and drive up the ROI.
So, start today if you have not done so.
You will be glad if you did, this is bread and butter of online advertising::)
Simply generate a report showing your daily adwords cost, and start comparing the daily sales for your recent campaign and measure your return of investment.
Till next time,
Thomas
Hi Thomas,
We met in one of Ewen Chia’s training session, and that was what you mentioned to me. Thanks for the enlightenment. Once I reached home I started tracking my ROI. And I’ve realised that my Adword campaign is making a loss!
The amount I spent on adwords is more than the profit that I can have just to sell 1 ebook. Does that mean the product is not a profitable one, or is there a case of me having some problems with my strategy in Adwords?
In total, I’ve managed to get a total of 492 clicks, with a total of $109.62 spent, and not a single product sold.
With a profit of $9.00 per product, and a avg of $0.12 per click, I figured that I’ll need to sell 1 product in every 75 clicks.
Can you share with me what went wrong?
Allan Heng
Hi Allan,
Yes, measuring ROI is the key in PPC. Without it, you can’t survive.
From your stats of 492 clicks, it looks like the product would not convert at all, and your average CPC is about $0.22 (I’m not sure how you arrive at $0.12 per click), but with a product profit of $9 on the front end, to break even at 1% conversion, you can only bid up to $0.09 per click, which is difficult.
If you’re selling an affiliate product, i recommend you look for product which pays more than $30.
Thomas