Have you ever questioned yourself how much profit you’ve made from your ads in comparison to the amount you’ve spent on those ads?
The Return on Investment calculator tool is used in measuring the Return on Investment (ROI) of Cost per Click (CPC) advertising. It is used in determining the ratio of your profits to your cost of advertising.
ROI increases when more money comes in and conversely decreases when money goes out. If CPC increases, the ad spend does too, and the ROI decreases. The primary aim is to decrease CPC so that ROI may increase.
- It is the most important measure for advertisers because it reflects the real effect that different Adwords have on an individual business.
- It enables and entrepreneur have an insight of the number of clicks and impressions they will get, and the contribution the ads make to your business.
Understanding input information and how to use the calculator tool.
Total Monthly Clicks
The total monthly clicks from the advertising publisher can be obtained from the Client Activity Report that your publisher (Say Google or Yahoo) avails to you. This is the number entered in the “Total Monthly Clicks” box
Estimated Average CPC
Defines the amount you are charged for each click made on your Ad. It is the amount paid to a publisher for each click that is made on your search listing.
Here, we look at the number of visitors that are driven by your ad that will eventually convert into customers. This number will vary depending on your market segment, bid price, copyrighting skills, ads network and the overall advertising tactics.
Average Profit per Conversion
This is the profit that you make for each sale that you make on your website. It is the amount earned from a sale that results from a conversion.
In CPC campaign, the use of ROI enables an investor understand investment decisions and SEO advertising practices that would best benefit his website and turn possibilities into profitable revenue streams.