Measuring Return on Investment on PPC

Everyone knows that using Google and Facebook advertising is a very effective way to get your products and services in front of your target market. Facebook is possibly the most targeted platform to advertise on because of the fact that 92% of the 800 million + users willingly submit personal data such as age, sex, race, etc. to it. Google is right on track with their advertising because of their in-depth program and years of experience. So given the fact that they are both very good forms of advertisement, which do you use? And how much do you spend each month? But most importantly, how do you figure out if you are getting a decent return on investment each month.

Here are some sample numbers that I'm using to make this a little bit easier. simply substitute your statistics to apply to you and your accounts:

Unique Visitors: April 1st - November 9th, 2011 = 19,815
Average Sale on the Site: $206.16
# of Sales on the Site (Given Date): = 622

# of Sales/Visitors= 3.1 % Conversion Rate

Google Pay-Per-Click ROI Calculation

Google PPC Clicks to the Site: 1290

Total Cost PPC Campaign: $1,290 @ $1/click

With 3.1% Site Conversion Rate: 38.7 Purcahses x $206.16 = $7,979.39 (Gross Sales) or $6,689.39 after cost of PPC

Let's assume you have a 40% Profit Margin = $4,013.63 net

Facebook PPC ROI Calculation:
Facebook PPC Clicks To The Site: 636
Total Cost PPC Campaign:  $750.48 @ $1.18/click
With 3.1% Site Conversion Rate: 19.7 Purchases x $206.16 = $4,061.359 (Gross Sales) = Net After PPC= $3,310.87
Lets assume you have a 40% Profit Margin= $1,324.34 Net