Conversion Tracking: A Good Tool For Measuring ROI

Writing by Pay Per Click Journal on Sunday, September 7, 2008 Comments Off

One tool that you want to be sure to include in your pay per click advertising arsenal is conversion tracking. This tool will help you see just how well your campaigns are performing. You’ll know at a glance whether your ROI is positive or negative.

Return on investment is the single most important metric in PPC because if you aren’t making money from your advertising then it isn’t worth it. While there are times when you can achieve a greater benefit by losing money in order to gain branding and top-of-mind marketing results, for most advertisers, ROI is much more important.

ROI is measured by taking your pay per click ad spend and subtracting it from the revenue earned from your advertising efforts. For instance, if you spend $100 on advertising and you make $120 back from sales as a result of that advertising then your ROI is $20. But how will you know that your sales resulted from the advertising? From conversion tracking.

Conversion tracking is a tool that tracks the customer on your site to find out what when they make a purchase. As soon as a customer clicks on the ad to go to your site, they have a cookie dropped on their computer and when they make a purchase, a conversion is logged. By using this tool, you’ll know in an instant whether your advertising is truly being effective.

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