Internet marketing can be a hit or miss when you get started; it's like chess, you learn, you perform, and over time, you master it. Pay per Click (PPC) is one of the most used marketing strategies, and rightfully so. It provides instant results and that too, with an impressive ROI (Return on Investment) and ROAS (Return on Advertising Spend).
However, as you spend more time into marketing, you realize that marketing is not a hit or miss game but something that requires a strategic approach.
The same happened with a UK-based cosmetic store, which was initially witnessing an ROI of around 17 leads per month for £40 per conversion. Within a couple of months, the same company's ROI surged by 58.25%, with the cost per conversion reducing to £17.41.
All it took were some enhancements and tweaking of the PPC strategy, and in this blog, we'll discuss those strategies which you can apply to improve the ROI and ROAS of your PPC ad campaigns.
First things first, it is essential to look at your account structure, the foundation of your PPC campaigns. The initial step towards improving the performance of your ads is to optimize your account structure. Your PPC account consists of the following groups.
Make use of relevant themes for organizing your campaigns. Each campaign belongs to an ad group that consists of a set of chosen keywords. Before creating ad groups, it is crucial to decide which campaign topics you want to assign to your marketing budget.
A campaign consists of various ad groups, though no number is fixed. An ad group typically contains 10-20 keywords that trigger the ads when typed in the search; thus, don't stretch your ad budget across a lot of campaigns.
Once you create ad groups, you will need to create more specific and targeted subgroups. Look at your ad performance and find keywords that are not performing well. Instead of keeping an irrelevant keyword in an ad group, try putting it into another group with more pertinent content.
Think from the buyer's perspective; what will you type in the search bar if you would want to find your products? What phrases and words are the most relevant to the stuff you sell? And most importantly, what results show up when you search for those keywords? Keep in mind these factors instead of blindly using a keyword that has a high search volume.
When creating a text ad, you can use four different keyword match types: broad modifier match, phrase, or exact.
Broad match type refers to your default keyword match type, and it reaches a broad audience. In this category, your ad will appear if someone searches for any word that is in your key phrase. Moreover, Google might also show your ads for search queries that include the synonyms of your target keywords.
For example, if your target keyword is "luxury apartments," Google might show up your ads for "luxury villas," "luxury flats," "premium apartments," etc. Broad match enables you to reach out to the broadest audience, thereby driving more clicks. However, the chances of irrelevant users clicking your ads also increases, which can reduce your ROI.
In a modified broad match, you get a performance similar to broad match type, but with enhanced relevance. This keyword match also allows you to reach a wide audience but offers you control over what type of users you want to see your ads. In a modified broad match, you can lock a certain keyword, and users typing for that particular word will see your ads. The "+" parameter identifies locked keywords.
For example, if you are targeting "office +boots," it tells Google that a user's search query must contain the word "boots" to see your result. Thus, your ad can be displayed if someone types "trekking boots" or "party boots," but not if someone searches for "office shoes." Thus, a modified broad type allows you to reach out to a broader audience and to filter unwanted ad traffic at the same time.
The phrase match type offers you more control over your ad campaigns than the modified broad match. In this type, your ads appear only if someone types your identified keyword phrases in the exact order. However, it allows other words to be after or before your keyword phrase.
For instance, if you are targeting "luxury apartments," your ad might appear for "luxury apartments in The UK," or "best luxury apartments in London." This type enables you to reach more relevant consumers by ensuring they enter exactly what you have in your keyword phrase. But, since words can appear before and after the search keyword, you can still reach a wider audience.
Exact match type helps you reach the most relevant kind of users. In this type, your ads will show up only if someone searches for the precise phrase you are trying to target. Thus, if you are targeting "luxury apartments," your ads will show up only if someone enters "luxury apartments." This helps you get the most relevant traffic, save you from irrelevant clicks, reduce ad costs, and increase ROI. But, it also restricts your traffic as you will not be able to reach a wider audience.
You can further increase the relevance of your ads and improve the ROI by using negative keywords. These are the words or phrases, that if entered, your ads will not show up. By using negative keywords, you can ensure that your ads are not appearing in front of unwanted users who are not fit for your brand or product.
For instance, suppose you are providing a digital marketing course that helps beginners learn the ins and outs of online marketing. You want your ad to be shown to those who are looking for a digital marketing course but not those who are searching for a free course. Thus, you can add "free" as a negative keyword; therefore, when someone searches for "free digital marketing course," your ad will not show up.
No utilizing negative keywords can lead to a lot of irrelevant clicks of uninterested users, and since every click costs money, this waste of clicks will skyrocket your advertising costs and plunge your return on investment and ROAS. Thus, think carefully and add negative keywords which you are certain will not bring any return to your brand.
Another critical step towards improving your PPC ROI and ROAS is to determine your average customer acquisition cost and customer value. Once you know what an average customer is worth to your business, you can figure out how much you want to spend to acquire that customer.
You can calculate your PPC campaigns' customer acquisition cost by dividing a PPC campaign cost by the number of customers acquired through it. For instance, if you spent $500 on an ad campaign and acquired 20 customers, your average customer acquisition cost is $25.
Once you know the customer acquisition cost, you can compare it with your average customer value. Obviously, your customer value should be higher than your customer acquisition cost. Determining these costs also help you determine how much you are willing to spend to acquire a customer. This, in turn, enables you to create an adequate PPC campaign budget, select which campaigns to run and which ones to end.
Once you are set with your keywords and budget, it is time to test your ads and optimize them for better ROI. To achieve maximum profits, you might need to A/B test various elements of your ad campaigns to determine what works out and what does not.
An essential thing to keep in mind is that it is to make sure you are testing one ad element at a time out of the four discussed below.
Headline: It is displayed as a blue text with a clickable link in the search results. It has a length of 4-6 words and gives a brief reflection of what you are offering.
Body text: The body text of an ad is similar to a meta tag; it provides the user with further information about what you are offering.
Ad link: The ad link is the link of the page to which your ad directs. Be sure to link your ad to something specific like a landing page instead of targeting something broad like a homepage.
Keywords: You can test various keyword combinations and match types to identify which keywords convert better than others.
As mentioned before, do not test all of these elements in one go. Once you determine which one you want to test first, create two or three variations of your ad. Keep all the components the same and change only the one you are trying to test. For instance, if you are testing the headline, change the headline for each ad variation but keep the body text, ad link, and keywords the same.
After testing, monitor the performance of each ad on the following basis.
● Which ad brings more clicks?
● Which ad brings more conversions?
● Which ad has a better ROI?
Once you analyze these factors and find the best headline, do the same for other components to create the perfect combination. A/B testing can be a time-consuming process, but the results it provides are fruitful. Moreover, it is the only way you can determine which ad combination is going to offer the best ROI.
Apart from the essential steps discussed above, here are some quick tips that can add to a positive ROI.
● If you are a company advertising for a product with a registered trademark, consider using the symbols ® and ™ in your ad copy.
● It is not essential to get your ads on the top position; if you are getting good ROI at #3 or #5, let it be.
● Make use of 'automated rules'.
● Don't stick to the best ad copy practices; try playing around.
● Use the term "Tap" for mobile advertising.
● Bid on your brand name
● Frequently monitor the impression share
PPC advertising is a challenging game and a highly competitive one too. Therefore, achieving high ROI and ROAS can be a hassle. But, it is not impossible, and you can significantly improve your PPC ad performance by following the systematic ads set up process and making necessary optimizations. An expert with the relevant experience can be of great help in your starting phase of the campaign.