PPC ROI Calculator

How to use this PPC ROI calculator

To calculate your PPC ROI, enter your projected monthly ad spend, expected cost-per-click (CPC), target conversion rate, lead to customer rate and average sales price. The tool will instantly calculate your PPC ROI, giving you an accurate idea about the returns you are getting on your PPC efforts.

PPC ROI formula

PPC ROI = [(Total Ad Revenue - Projected Monthly Ad Spend)/ Projected Monthly Ad Spend ] x 100

Here, the total ad revenue is calculated as follows:

Total Clicks = Projected Monthly Ad Spend / Expected CPC

Total Conversions= Total Clicks × (Target Conversion Rate/100)

Total Customers = Total Conversions × (Lead to Customer Rate/100)

Total Ad Revenue = Total Customers × Average Sales Price

Understanding the PPC ROI result

The ideal PPC ROI will depend on various factors such as your industry, scale of business, ad platform etc. In general,

• A high PPC ROI indicates that your PPC campaigns are profitable and that they are performing well, given your investment. The higher the PPC ROI, the greater is your profit.
• A low PPC ROI suggests that you are getting relatively less return on your campaigns. This signals a need to analyze and optimize your campaign. If your PPC ROI is negative, it indicates that your ad campaigns are running at a loss.

When to calculate PPC ROI

Here are a few key scenarios where you should calculate your PPC ROI:

• After running a campaign to measure its overall success
• To compare the performance of different ad creatives, keywords, or audiences
• Before scaling your ad spend to ensure campaigns are profitable
• To assess the effectiveness of targeted or remarketing campaigns

How to calculate PPC ROI (with example)

Let’s say your projected monthly spend is $10,000, expected CPC is $2, target conversion rate is 5%, lead-to-customer rate is 20%, and average sales price is $500. You can calculate your PPC ROI as follows:

PPC ROI = [(Total Ad Revenue - Projected Monthly Ad Spend)/ Projected Monthly Ad Spend ] x 100

PPC ROI = (25,000 - 10,000)/ 10,000 x 100 = 150%

Where,

Total Clicks = 10000/2 = 5000 clicks

Total Conversions = (5000×5)/100 = 250 conversions

Total Customers = (250×20)/100 = 50 customers

Total Revenue = 50 × 500 = $25,000 

In this example, your PPC ROI is 150%, indicating that your campaign generated 1.5x the revenue of your ad spend.

How to improve your PPC ROI

• Optimize your keyword strategy to reduce irrelevant clicks
• Use ad extensions to provide more context and increase click-through rates
• Continuously test and improve ad copy and visuals
• Focus on high-converting landing pages to boost sales
• Implement retargeting campaigns to capture leads who didn’t convert initially
• Analyze your data to refine targeting and budget allocation