The mark of an exceptional company is the ability to generate ever greater returns on equity. For instance, if your company has $1 million of accounting equity, and you generate $200 thousand in earnings (profit), then your return on equity is 20%. Your goal for next year, then, might be to generate a return on equity of 25%. This kind of analysis is particularly relevant to public companies, but it is also valid for private companies as a measure of performance.
One way to increase your company’s return on equity is to invest in things that will increase sales and that can be measured so you know how much they are increasing sales. These “things” consist of advertising and other forms of marketing. Unfortunately, most forms of advertising make it very difficult to track how much business you are actually generating in return for your advertising dollars. But you and I know about a form of advertising that does not suffer from this weakness.
Paid search, or pay per click.
Pay per click lets you know exactly what your return on investment is for all of your keywords, ads, and landing pages. Over time, as you generate data and do more split-testing, you should be able to make your return on investment from paid search improve. Improving the ROI on your advertising improves the return on equity for your overall business, all else being equal.
So if you are looking to improve your company’s financial performance, look to advertising platforms that are cost-effective, easy to implement, and provide complete transparency with regard to return on investment. Paid search is your best bet.
If you could use some help with your pay per click management, contact Work Media at 888-299-4837 or email Info@WorkMedia.net.