Posted to Ben Finklea's blog on October 9th, 2008

ROI of your Paid Advertising: Total Cost

We talked the other day about the data generated by online advertising like Google AdWords and which statistics you should track. We explored the importance of Estimated Impressions and why it is vital that you look at these and not just the click through rate on your ads. Another statistic that you should watch is your estimated cost per click. It is easy to look only at your total cost because that is your out of pocket expense. But as long as you have set your budget cap at an amount you can afford then you should really be looking strategically at the cost per click.
The lower your cost per click the more efficient you are being with your ad money. You need to look critically at the keywords with the higher cost per click and determine whether you could be working smarter using more specific terms to get traffic. Sometimes it is better to have several specific keywords or phrases with lower cost per click than to have just one general keyword that kills your whole advertising budget.