E-commerce companies face uniquely fierce competition regardless of the industry they are in. E-commerce markets are so saturated that digital marketing is not just recommended—it’s required.
Running an e-commerce business often means you’ll need to run pay-per-click advertisements to compete with the competition and get potential customers to your site to convert. If you’re running PPC ads, it’s imperative to learn more about these essential PPC metrics for e-commerce merchants.
When it comes to revenue, it’s essential for e-commerce merchants to understand what they are making at the end of the day. Revenue is the primary metric that most brands pay keen attention to because it can inform a brand on how their ads are functioning.
The total revenue generated from an ad campaign is how companies can measure the success of individual ads and the campaign as a whole.
Pro Tip: While revenue is a vital metric to understand, it’s crucial to delve into how other metrics affect it in the long term.
Return on Ad Spend
Return on ad spend is another key performance metric to analyze when considering the success of a PPC ad campaign for your e-commerce business. Here is how to determine your return on ad spend:
What You Make From Ads / What You Spend on Ads
When assessing your return on ad spend, ask yourself, “Am I making money, breaking even, or losing money?” The answer to this question informs what adjustments you need to make to your PPC campaign. For example, if a company is working with a 20 percent margin, it needs a five percent return on ad spend to break even. Anything above a five return on ad spend, and that company will be making money.
One data point that PPC management companies often undervalue is conversion metrics. These metrics provide tons of insight into how to increase revenue. When examined closely, the conversion volume can tell companies where there is more potential by identifying who converts more frequently and where those people derive from so you can invest more in those areas.
In e-commerce, you have to be prepared to pivot on a dime depending on your competitors. When you’re looking for a professional and experienced e-commerce PPC agency, ensure you find one that understands your goals as a brand. Logical Position is a professional digital marketing agency with tons of experience in e-commerce PPC. As a Google Premier Partner agency, we have a wealth of inside knowledge we lend to our clients. Our goal is to understand our clients’ goals and achieve them through a holistic look at each business and their Google Ads goals. Contact us today for a free consultation.