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How to Measure the Success of Your PPC Advertising

The challenge is maximizing your PPC spend and understanding if your PPC campaigns are truly profitable. I started this thought process about five years ago when I started asking businesses if their PPC advertising was profitable. The most common answer that I was received was that their PPC campaigns (typically Google AdWords) were generating targeted leads and sales but they were not sure if the ads were actually showing a profit. This is because most sales are done offline and Google and other search engines has no way to know if a sale was made and cannot report if the campaign was profitable or achieving a positive return on your investment.

Let's say that you have a business that sells Outdoor Furniture and you have three PPC ads running on Google; Google reporting tools will tell you how often a specific ad is seen (impressions), clicked (click through rate) and converted (customer takes an action such as submits a contact form). If someone searches for a Gazebo and your PPC ad appears; the searcher first sees the ad, then clicks on the ad, then takes an action to request a price on a Gazebo. Google reports all that information but they do not know if the Gazebo was sold.

That is incredibly important information to be missing when making advertising decisions. Without knowing the sale was made and how much was generated it is very hard to know for sure if your AdWords spend is profitable and would be almost impossible to know what the ROI on that spend was. In addition you do not know which ads are generating a positive return and which ads are not.

It is very beneficial to know the ROI of every advertising campaign that you do in order to make smart marketing decisions. Hopefully we now agree that calculating the ROI of each PPC campaign is extremely important. Big business are already tracking this data, my goal is to illustrate how smaller businesses and entrepreneurs can accomplish the same.

Step 1 - The URL

Every URL has the ability to store what is referred to as variables. In a URL, variables are set after a question mark (?). Here is an example;

company.com?variablename=variablevalue

What you need to do is set up the variables that your Website will read from the URL when a searcher clicks your PPC ad. My suggestion is to have a different variable value for each different PPC ad that you have. To keep this a illustration more easily understood, we will just use one variable name and one variable value in this example. By having just one variable value, we will be tracking your entire campaign, not separated by different ads. Here is an example of what your URL should look like:

YourWebsite.com?Google=1

The variable Google can be any descriptive word that you choose. You can name this variable AdWords, Yahoo, Bing or whatever works best for you. I personally prefer using Google as the variable name when I am measuring an AdWords campaign.

Step 2 - Extracting the Variables

When a searcher clicks on your new ad the URL that will be live at your website will be YourCompany.com?Google=1. You need to read that URL and extract the variables from it. I use the Cold Fusion programming language to accomplish this, but you can also use PHP,.NET, ASP or any other dynamic language.

Step 3 - Creating a Session

There are different ways you can create a session for that user. The easiest way is to set a Cookie which will create a session for that specific user. This Cookie will follow that user throughout the Website as he/she surfs from page to page. Basically what the Cookie is storing is that this specific user came from a Google ad (variable name) and from the first ad your tracking (variable value).

Step 4 - Recording the Data

Almost every Website that is using PPC advertising should have a call to action. Some type of action you want the user to take, such as filling out a contact form, requesting a price, downloading a white paper, purchasing a product or service, etc. Every action should include the user filling in some type of information, with their name and email address being the minimum. That information being filled out in the form needs to be inserted into a database.

Along with the personal information submitted you need to also submit the Cookie data into the database in the same row as the personal information. Do not forget to include the date in which the form was submitted, this is extremely important. At this point the application will know that a specific person took the call to action on a specific date and that person came from a Google AdWords with the number one indicating which Adword this user clicked. This can be referred to as a lead from that AdWords campaign within a specific time frame.

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