Knowing how to determine whether the time and energy you’re putting into your business is earning you the payoff you’re looking for is especially vital when it comes to paid search marketing campaigns. Sure, pay-per-click (PPC) campaigns can help increase your visibility online, but by how much and is the margin of increase worth the money you’re spending? More importantly, are you seeing results in your bottom line?

By analyzing your return on investment (ROI), you can more effectively determine which ads and keywords to keep using and which ones to let go of as you continue to develop and hone your SEO efforts. Understanding if the money and time you put into projects, equipment or materials is worth the payoff at the end of the day is fundamental to making decisions on whether to continue your current efforts or determining that it’s time to refocus your funds and energies.

Particular areas to examine are ad cost, the number of clicks you receive from paid listings, the number of orders resulting from those clicks and the revenue generated on the product you’re paying to list. To get your ROI, you can simply crunch a few numbers to see whether you’re getting the payoff you’re looking for. For example, the difference between the amount you paid for your ad and the revenue generated is your ad profit. Take that number, divide it by the initial cost and multiply by 100 to get your ROI for that ad.

Not a math person? Luckily most bid management programs offer click-through reports so you can see how your ad is doing. You can get data on how many times your site was listed in a search, how often a user clicked on your link and how much you’re paying for each keyword. These reports don’t offer the most in-depth information, but they are valuable in that you get an idea of where your marketing efforts stand.

More thorough reports from ROI tracking systems like AdWatcher, Trak4U and others make it easier to effectively and efficiently decide which campaigns to continue and which to drop, thereby making you a smarter business owner and ensuring that you spend your money and time in the best ways possible.