The beauty of Internet Marketing is that it is the only marketing that is 100% measurable.
- You can measure how many people see your ad.
- You can know how many visited your website.
- You can count how many people contacted you
- You see the sales that result
All this makes calculating ROI possible. And sooner or later you will calculate the feasibility of using Paid Search to sell your products online.
How to calculate ROI for a PPC or Paid Search Campaign is something everyone learns usually after they already spent too much money. While there is plenty of information at Google Adwords forums and Microsoft Adcenter about how and why you should include PPC in your online marketing strategy, the ROI parts are few and far between, and reading all the marketing material is akin to drinking from a fire hydrant.
The reason it is very difficult to find clear guidance on measuring ROI is that very few agencies and professionals actually do it. (they say they do, but the reporting is usually stuffed with graphs and other shiny stuff so you don’t notice that the ROI numbers are not there)
Here is a detailed description of how I determine the ROI of your Adwords, et al PPC campaigns.