What's the best way to measure ROI for your B2B SEM campaigns?

1 Define your goals and KPIs

Before you launch any SEM campaign, you need to have clear and specific goals and key performance indicators (KPIs) that align with your business objectives. For example, your goals could be to increase brand awareness, generate qualified leads, or drive conversions. Your KPIs could be impressions, clicks, cost per click (CPC), click-through rate (CTR), conversions, cost per lead (CPL), cost per acquisition (CPA), or revenue. Depending on your goals and KPIs, you can choose the most suitable SEM platforms, strategies, and tactics for your campaigns.

2 Set up tracking and attribution

To measure your SEM ROI, you need to have the right tools and methods to track and attribute your results. The most common and essential tool is Google Analytics, which allows you to monitor your website traffic, conversions, and revenue from your SEM campaigns. You can also use Google Ads or Bing Ads to track your ad performance and costs. However, Google Analytics and other SEM platforms may not capture the full picture of your B2B buyer journey, which can involve multiple channels, devices, and interactions. That's why you need to use a multi-touch attribution model, which assigns credit to each touchpoint that influenced a conversion. This way, you can better understand how your SEM campaigns contribute to your sales funnel and revenue.

3 Calculate your SEM ROI

Once you have your goals, KPIs, tracking, and attribution in place, you can calculate your SEM ROI using a simple formula: ROI = (Revenue - Cost) / Cost x 100%. For example, if you spent $10,000 on your SEM campaigns and generated $50,000 in revenue, your ROI would be (50,000 - 10,000) / 10,000 x 100% = 400%. However, this formula may not reflect the true value of your SEM campaigns, as it does not account for the lifetime value (LTV) of your customers, the time value of money, or the opportunity cost of your investment. Therefore, you may want to use more advanced methods and tools to calculate your SEM ROI, such as net present value (NPV), internal rate of return (IRR), or ROI calculators.

4 Optimize your SEM campaigns

Calculating your SEM ROI is not enough; you also need to optimize your campaigns to improve your performance and profitability. To do so, you should conduct keyword research and analysis, create persuasive ad copy and landing pages, test and experiment with different ad formats, extensions, bids, budgets, and targeting options. Additionally, you should analyze and monitor your SEM data and metrics to identify any issues or opportunities for improvement. Finally, you should adjust and refine your SEM strategy based on your results, feedback, and market trends.

5 Learn from your competitors

Gaining insights and ideas to enhance your SEM campaigns and increase your ROI can be achieved by learning from your competitors. You can use various tools and techniques to spy on your competitors' SEM campaigns, such as SEMrush, SpyFu, or SimilarWeb to discover keywords, ads, and traffic sources. Moz, Ahrefs, or Majestic can be used to analyze backlinks, domain authority, and organic rankings. Additionally, BuzzSumo, Social Blade, or Sprout Social can be employed to monitor social media presence, engagement, and content. SWOT, Porter's Five Forces, or PESTEL can evaluate strengths, weaknesses, opportunities, and threats. Finally, benchmarking, gap analysis, or competitive advantage can compare your SEM performance and ROI with your competitors' and identify unique selling points and areas for improvement.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?