Many online businesses are kin to know about their potential online advertising ROI before investing their money into any ad campaign. This is actually important because it gives the marketer an idea of how much their ROI would be. We built an ROI calculator to make things easy for businesses and individuals marketers to calculate their potential ROI of their advertising campaigns.
To calculate your ROI, use the ROI calculator below…
Advertising ROI Calculator
To calculate, please enter your figures, click calculate, and your result will be displayed in the section below the calculate button. You can play with the figures to see what increases and decreases to see how it will impact your ROI.
* Note: Return On Ad Spend (ROAS) is called Value/Cost in AdWords. ROI subtracts the cost of advertising, but ROAS does not.
Calculating ROI is pretty simple and straight forward mathematics. It is calculated in two ways and this will be demonstrated below.
The first is this:
As seen above in the first ROI formula, calculating ROI is simply taking the net return on investment and dividing it by the cost of investment and them multiplying it by 100%.
For a digital marketer, the net return on investment is equal to the total sales revenue derived from an advertising campaign while the cost of investment will be the total cost of advertising (Total Ad cost).
Once the division is done, then it will be multiplied by 100% to get the actual advertising ROI.
The second is this:
In the second ROI formula, the final value of the investment is subtracted from the initial value of an investment and then divided it by the cost of investment then multiplied by 100% to arrive at the ROI.
This will also work perfectly for online businesses when trying to determine their potential ROI on Ad campaigns.
We hope this post will help online marketers calculate their advertising ROI and determine if their investment will be profitable before investing their money.
In any case, we will be happy to hear your experience with the ROI calculator we have provided for you guys. Let us also know how we can improve this post and calculator.
Just like many of us do when we are about to promote our businesses, We ask friends or dive into multiple online forums to ask questions concerning business advertising.
Particulary most starters will ask questions such as “What is the best way to advertise a business online?, How to advertise my business? Where to advertise my business online etc.”
In many cases, people ask of free ways to advertise their businesses online. Its all about creating awareness and to get visibility in order to grow your business online faster and beter.
It is a known fact that online paid adverising helps brands grow faster online, become more popular and profitable, expand into several markets and compate with other rivals to control a larger share of the market.
The essense of this blog post is to help small business with all they need to grow their businesses through online advertising practices.
Defining online business advertising
In my opinion, this is a set of practices businesses put ads on one or several niches related blogs or websites to gain some visibility.
It also involves buying display ads from ad networks or programmatic advertising platforms to get traffic with the hope of getting new or more customers.
online advertisers use several platforms for their paid advertising purposes. The primary aim is to acquire more traffic and dominate their niche markets.
Advertising methods such as display advertising contribute to more traffic and even organic traffic when those ads are placed on a good and popular platform.
We have discussed some of the effective ways businesses can use to grow their businesses.
Paid Business Advertising platforms
These are ad networks where businesses need to pay money for advertising their businesses. These Ads are sub-divided into categories such as PPC Ads and CPM Ads.
To elaborate more on PPC and CPM,…
PPC simply means Pay per click. This pricing model allows ad networks to charge advertisers for each click they get from the publisher’s traffic.
On the other hand, CPM is the Cost per 1000 impressions or Cost per 1000 views.
The CPM Ad rates are fixed for example the advertiser may be charged a fixed $5 for 1000 impressions or 1000 views in case of a video.
Let’s look at the most used, most popular and the most effective paid advertising platforms.
Google ads also known as Google Adwords is simply the biggest paid advertising platform online. It’s so big that over millions of individuals and businesses use the platforms as a source of quality traffic.
I won’t be able to say exactly how many customers Google Ads has but it is estimated that about 50% of all global businesses both online and offline use Google Ads for paid advertising.
Also, 80% to 90% of all online businesses globally use Google ads to advertise their business across all sectors and industries.
The good thing is that Google owns Youtube also which is the second largest search engine and Admob which also controls the largest share of mobile Ads.
Here are some interesting statistics about YouTube you should know
It has 2 billion active monthly users, over 30 million active daily users, over 300,000 YouTube TV paying subscribers, More than 5 billion YouTube videos have been shared on various platforms till date.
Over 50 million content creators on YouTube, Average viewing session on YouTube is about 40 minutes. 5 billion videos watched daily, 500 million mobile views per day, 300 hours worth of videos uploaded every minute
It will be fair to say Google Ads should be one of your first choices for paid advertising.
Yahoo and Bing collaborated to form one big advertising network. Mostly I guess for competitive reasons making them one the of the biggest paid ad networks for online advertisers.
This year made Yahoo/Bing Ads added great features given advertisers more targeting options to reach a more precise audience.
They distribute Ads through the Yahoo email system, Yahoo and Bing search engines, Media.net and through other various outlets to reach a wider audience.
These are few but very effective paid advertising platforms, Let’s look at some social media platforms used for online advertising.
Paid adverting on Social Media
Social media platforms these days have consistent loyal audience making most of them one of the best paid and free online advertising ad networks for advertisers.
Advertising on social media sites could be one of the best opportunities to grow your small business into a big business.
Let’s discuss some of them.
Facebook is no doubt the largest social media platform on earth. It is also one of the most used social media platforms for online advertising.
Facebook has over 2.23 billion active monthly users, 1.8 billion monthly mobile users, 1.45 billion active desktop daily users, 1.57 billion active daily mobile users, Over 250 million Facebook stories daily viewers.
Facebook Advertising Statistics
Facebook has more than 5 million advertisers as of 2017.
The Average CPC for Facebook Ads Is $1.72, Average CTR is 0.9%, and Average CPM is $7.92.
Facebook’s share in the global digital advertising market is 19.7%.
What makes Facebook one greatest platform for business advertising is the number of people that use the platform all over the world with over two billion users.
Facebook also has an advanced advertising system with one of the best targeting options. Facebook also has an audience insight platform that allows advertisers to design their target audience, save them and use for precise targeting.
First, lets look at some statistics about Instagram, It has over 1 billion monthly active users, 500 million+ active daily users, 500 million+ Instagram stories active daily users, Over 50 billion photos, 25 million number of active businesses on Instagram, Over 4.2 billion Instagram likes per day, over 100 million photos and videos shared every day.
Instagram Ads has become very popular and also manage to attract over two million online advertisers. This made Instagram one of the biggest social media platforms for paid advertising.
Instagram for Business
An estimated 71% of US businesses are on Instagram in 2018.
Instagram’s projected revenue in 2019 is $14 billion.
Since Instagram was acquired by Facebook, They scared up the system to become more attractive for advertisers while making it also one of the most used social media platforms today.
On average, people spend more time on Instagram more than any other social media sites today making it a very good paid ad network for businesses.
Here are some demographics about Twitter, Over 330 million active users, 500 million tweets daily, 80% use Twitter on their mobile devices, 100 million active users daily.
The above figures present a great opportunity for small businesses to grow their businesses through paid advertising.
Twitter to some people is one of the most effective advertising platforms for businesses. With a large audience and a high level of engagement from its audience.
Twitter allows small businesses to promote their tweets and trends at smaller budgets to allow small businesses to grow and scale up their sizes.
This is another great platform for paid advertising. As a small business, using your budget to target a specific audience the key.
LinkedIn reported over 630 million active users and about 304 million active monthly users, It has over 30 million companies and about 20 million job listings openings, 100 million job applications on LinkedIn every month.
One of the most important figures of LinkedIn is most digital marketers believe is a great platform to generate leads with 79% of B2B marketers believe is an effective source of generating leads.
LinkedIn paid advertising work best when you are targeting specific professionals. If you are in B2B business, you might consider giving it a try.
It is a very effective ad platform to target a specific audience and increase your outreach.
Pinterest is a super good platform for quality traffic. Many small businesses use Pinterest to promote their products and services.
Here are some Pinterest statistics.
It has over 250 million monthly active users and about 125 monthly users are from the US. Over 175 billion pins, over 3 billion Pinterest boards, about 81% of users are female, about 93% of active pinners said they use Pinterest to plan for purchases and 87% said they’ve purchased something because of Pinterest.
Pinterest offers advertisers the opportunity to promote their Pins which allow users to promote their Pins. Pinterest Ad models are Traffic, Engagement and awareness. Small businesses drive a lot of sales through Pinterest paid ads.
All you need to do is to create a great Pinterest post and promote them to get quality traffic.
Another video and photo App that is used by millions all over the world. Their statistics present a great opportunity for online advertisers.
Here are some of the interesting statistics about SnapChat…
They have over 310 million active monthly users, about 190 million active daily users, 25% of the US population on Snapchat user other social media platforms also, 3 billion Snaps (Videos and photos) are created daily, average time on Snapchat is 30 minutes, average age of users range from 18 to 24 and about 73% in the US. 107 million monthly active users are from Canada and US users and 14 billion Snapchat daily video views.
Best Forums for paid business advertising
Online advertising platforms are not only limited to search engines and popular social media platforms. Other platforms such as forums are great ways to grow your business.
Forums often have a lot of people from all backgrounds spending countless hours on these platforms even more than search engines and social media websites.
I will discuss some of the most important ones below.
To me, Quora is one of the best forums online today. The platforms have hundreds of thousands of experts and people looking for solutions.
Quora actually has over 100 million active users monthly from all backgrounds. This presents a great opportunity for online businesses to target their audience.
Quora runs all major Ad types such as Image ads both on desktop and mobile ads with various sizes, contextual Ads.
They allow advertisers to use their list matching targeting by uploading emails list of people they want to target.
They also optimize their pixel to support multi-level conversion tracking and behavioural ad targeting options to allow businesses to get the traffic they need to grow their businesses.
Reddit is one of the greatest forums used by many businesses to get targeted traffic. With over 330 active users sharing links, images and text post in and contributing in several subreddits.
Pay per click advertising has been around over the last two decades and have seen a lot of transformation.
PPC has evolved a lot basically the way PPC giants such as Google, Yahoo, Bing and Amazon has adjusted their PPC advertising tools constantly to ensure enhanced performances.
It is always important for online advertisers to follow-up and be updated as much as possible in order to be able to run more effective PPC campaigns.
In this post, I will guide you through the process of formulating and running successful PPC or CPC campaigns.
Let’s jump into it…
What is Pay Per Click Advertising?
First things first. Let’s understand what is pay per click advertising.
Pay Per Click (PPC) advertising is also known as Cost per click (CPC) advertising it is an online advertising model used by both the advertisers and the publisher as a pricing model to sell or buy traffic.
The advertiser is required to pay for the traffic sent by the publisher which in most cases the publisher is a website owner or a group of websites inclusive of blogs.
Advertisers often buy specific targeted traffic that is relevant to their niche or market type.
Pay per click advertising usually sends traffic throughbanner ads, Text ads, Interstitial Ads, In-App ads across mobile and desktop devices. Other forms of utilising PPC Advertising is through Pop-Up Ads, contextual ads, links etc.
Pay per click advertising or cost per click advertising is largely controlled by search engine giants such as Google (Google Ads), Bing and Yahoo Bing and Yahoo Ads). These search engines display these ads on their various platforms.
How PPC advertising works will have discoursed in detail below…
The image below shows how Pay per click Ads appear in Google results.
Pay per click Trends
PPC trends show the evolution process of PPC advertising. The online PPC community could testify that a lot has changed over the past years. In particular, 2018 witnessed a lot of changed in online PPC such as,
Google rebrands her online advertising from “Google AdWords” to “Google Ads”. This change was accompanied by a lot of features within the system much as creating various types of campaigns, enhancements, and targeting options making creating and targeting campaigns more effective.
Bing also followed the same way in their PPC advertising system making it more convenient to create and manage campaigns with a more efficient reporting system.
LinkedIn on the other hand also implemented profile targeting system in 2018 while Amazon has received more PPC Ad budget as advertisers noticed more products search taking place on Amazon.
How does Pay Per Click Advertising work?
PPC advertising or cost per click advertising works by using highly technical IT systems designed by various Ad Networks. Although each of these systems works differently, they all have one thing in common which is generating clicks for the advertiser.
PPC or CPC pricing model
Cost per click advertising works on two popular models which are known as the Bid-based CPC and Flat-rate CPC.
In each of the models, the advertiser’s sign’s up with the Ad publishers which in most cases is an advertising ad network.
The registration also includes an agreement which allows each advertiser to indicate or choose how much money they are willing to pay per certain keyword or keyword phrases.
The Ad network system then automatically ranks advertisers bids and show them when a quarry is entered in the search engines.
To break it down further…
For search engines such as Google, Bing and Yahoo. These Ad giants use a bidding system that allows advertisers to bid for keywords that are related to their niche or market.
The bidding system works in favour of the advertiser that pays higher for a certain keyword or keyword phrases. These Ads are displayed on top or below search results.
On the other hand, websites owners or bloggers charge advertisers a fixed amount to place banner ads, interstitial ads or Text Ads within a given time frame. Ad operates in a similar way such as search engine while also they have the capability to charge a fixed amount per click as well.
Pay Per Click advertising Checklist
In every project, there are a set of activities which involve proper planning and management for those budget to be successful. This same ideology is applied for PPC campaigns in other to reap the full benefits of PPC advertising.
This checklist entails how the cost per click campaigns should be planned and managed Daily, weekly, Bi-Weekly, Monthly and Quarterly.
Planning Pay per click
Planning your PPC campaign entails the following
Outline Key Performance Indicators (KPIs)
Budget your estimated campaign spend and approximate cost per click you expect to spend on your campaign.
Set your target for conversions and acquisitions (CPA)
Define your frequency of measuring your campaign
Daily monitoring and optimization are done by checking the daily Ad spend and conversions.
Movers: Click-through rates and changes in the cost
Bid Adjustment: Adjust Ad bids based on top performance and poor converters
Keywords adjustment: Monitor and adjust poor performing keywords
Position: Click performance top verses side
Rebalance: Refine performance anomalies
Keywords: Negative Keywords research
Mobile: Mobile bid adjustment versus desktop performance
Impressions: Search and update missed opportunities
Ad groups: Split out, narrow and refine
Ads: Create new Ads, analyse the existing ads and pause poor performing ads
Placement: Remove or poor performing Ads
GDN: Display verses search performance review
Quality: address low-quality keywords scores
Website links: Analyse performance, Add or remove
Analytics: Search for poor visitors and fix metrics
Geo-targeting: location performance and adjust bids
Dayparting: Day of the week and time of the day analysis.
Review: Historical performance analysis.
How to Calculate Pay per click advertising?
To understand how PPC or cost per click advertising is calculated is very simple. This is done by dividing the cost of advertising by the number of clicks from a particular campaign.
The formula is as follows: pay per click ($) = Advertising cost ($) / number of clicks (#). Doing so will give you an insight into how much your PPC advertising campaign actually cost.
PPC Advertising cost OR CPC advertising cost
PPC advertising cost Or CPC advertising cost is simply the specified cost of running a PPC or CPC campaign in a given period of time. This advertising cost can vary based on when the advertiser decides to analyse their cost of advertising compared to the performance of the Ad campaign.
Types of Pay per Click Advertising
There are various forms of PPC advertising also known as CPC advertising. They come in various forms of online advertising and the most popular ones are Banner advertising also known as Banner Ads, Text advertising or Text Ads, Interstitial Advertising or full-screen Ads, mobile and in-app advertising.
The example of these PPC advertising types will be briefly discussed below as follows…
PPC Banner advertising is a form of online advertising that allows advertisers to design banners with promotional information and display them on publishers channels.
Banner advertising is arguably one of the oldest forms of online advertising. It is still one of the most popular among online marketers. The reason for this is simply because they are more attractive and eye-catching for visitors.
The most popular banner sizes are the 728×90, 300×250, 160×600 and 468×60 while there are many other banner sizes. These banner sizes are also known to be the most converting ads.
Interstitial PPC advertising also known as full-screen advertising is mostly used on mobile devices to get the full attention of the visitors. They appear in full screen or mostly covers 70% of the screen with the possibility of closing them down or it automatically disappear after a few seconds.
Interstitial Ads comes in various sizes. The most popular once are 320×480 and 480×320 for mobile phones while 1024×768 and 768×1024 are more suitable for tablets.
PPC Mobile advertising has grown significantly in the past five years. This is partly because of the dramatic increase in mobile use by internet users. Google reported in 2015 that mobile search surpasses desktop searches made in their search engine.
This made Google and other search engines lay more emphases on mobile devices. It presented online advertisers the opportunity to target mobile users and increase their sales and ultimately profits.
Because most people carry their mobile devices with them all the time. online advertisers have also been doing their best to target mobile users while implementing various mobile Ads targeting strategies.
CPC Text advertising has also come a long way making it one of the oldest and the most popular form of PPC online advertising. Text ads are mostly used by Google and other search engines.
These text Ads are mostly displayed on the top and bottom of google search results. Google also displays PPC Text Ads on YouTube and publishers blogs and websites all over.
Pay per click advertising Agency
These are pay per click advertising Ad networks such as AdsTargets offering advertisers the opportunities to run their PPC campaigns.
Also, there are a lot of advertising agencies which helps small businesses to run, monitor and optimise their PPC or CPC Ad campaigns for a monthly feel. These are all classified as Pay per click advertising agencies.
Benefits of Pay per click
There are numerous benefits brands get from PPC or CPC adverting. Nowadays, most brands have dedicated pay per click budgets and put them to use year-round. It is one of the reasons why Google makes over 100 billion dollars why Facebook makes over 40 billion dollars.
The benefits are as follows
PPC advertising gives brands online visibility;
It increases their online exposure which makes an impact on their off-line; exposure as well.
Brands that engage in CPC advertising increase their sales and conversions;
It enables fast growth for brands
We have covered pay per click or as you like cost per click here but will be very happy to know what you think about this online advertising concepts.
Suggestions with the most recent updates about PPC or CPC are welcome so we can improve the quality of this post and keep it as fresh as possible.