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PPC – Lower Your Costs

Would you like to lower your cost and hit your client’s goals every time? We have some tips for you which can help you to achieve it. CPA  equals cost per conversion.

Your cost is defined by the number of clicks your ads get multiplied by your cost per click.

And your conversions are just the number of clicks you get multiplied by your conversion rate.

Let’s sub that into our equation:

If we wish to check what CPC would we need to be sure to hit that target CPA? We need to follow the below formula.

 

So long as we know what our conversion rate is, we can guarantee we hit our CPA goal. For example, if we knew our traffic converted at 3% and we wanted to make sure our CPA was always £25, we know we need to pay £25 x .035= £0.75 CPC

ROAS (Return On Advertisement Spending) is a KPI (Key Performance Indicator) that is used to determine media effectiveness. It can be calculated for online and offline media campaigns. ROAS can also focus on campaign elements such as Google AdWords Ad Groups or even individual keywords within PPC advertising.

Revenue equals number of sales (or conversions) multiplied by the average order value (AOV)

 

Conversions equals number of clicks you get multiplied by your conversion rate.

 

Our goal ROAS is  the cost we should be paying per click:

 

So we can set our bid in order to guarantee we hit our ROAS goal. For example, if we needed to hit a ROAS goal of 5.0, our average product sells for £150, and we convert our traffic at 3%, then we know that we need to be paying .02 x $150 / 4.0 = £0.9 CPC.

If you need any help with increasing your search performance or on how to make more opportunities for your business, then please get in contact with us here at Network Intellect. Please get in contact with us here at Network Intellect.

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