So many factors come into play when starting a pay-per-click (PPC) campaign. A poorly optimized campaign is a waste of money and resources. As a small business owner, you are tasked with being the company accountant, lawyer, human resources, marketing and everything else. The details in researching and setting up a profitable PPC campaign can be a huge deterrent. Even coming up with a budget can be an issue. But, done correctly, even a small budget can spur a new revenue stream. Let’s start by looking at some basic PPC math.
1. Calculate your PPC budget
CPC (cost per click) x Conversion Rate = Cost Per Lead
(Lifetime Value – Investment)/Cost Per Lead = ROI (return on investment)
So theoretically, your investment could be infinite! Except that there will inevitably be:
- A point of diminishing return.
- A point at which you can not service the number of customers.
A small PPC budget can still be effective with the right targeting. We recommend starting with at least $1,000 to make sure you are competitive, and the results are trackable and attributable in Google Analytics.
2. Watch Out For Diminishing Returns
Reasons for a diminishing return can include a limited search volume for your target audience or increased competition. A limited search volume, or fewer people interested in your services, could mean low demand. At some point, you will have a cost per click that does not return a profit. When this occurs it makes sense that you stop raising your budget and if you have the capacity to service more customers, look at investing in other advertising media.
3. Consider Other PPC Platforms
But not all PPC ad outlets have the same audience, targeting demographics or cost per click. When looking at PPC advertising most advertisers go straight to Google Ads campaigns. This makes sense based on Google’s huge market share, but as your ROI begins to plateau, other outlets are the next step.
StatCounter Global Stats has the following stats on search engine market share:
Bing and Yahoo! are actually on the same advertising platform, so looking at Bing/Yahoo! for more reach (and possibly a lower cost per click) is a great PPC strategy.
Along with Bing/Yahoo!, are other social outlets like Facebook, which has some incredibly detailed demographics targeting. LinkedIn is also a great outlet depending on the business offerings; for business to business LinkedIn can be very powerful.
4. Improve Your Optimization
Moving on to other media is not the only way to battle a diminishing return, improving both campaign targeting and conversion rate optimization can lower your CPC and return ROI.
Your campaign targeting has demographic and geographic data that should be scrutinized on a regular basis. You can optimize your market segments by doing bid adjustments based on:
- Age ranges
- Household Income
- Locations (zip codes)
- Devices (whether they are desktops, tablets, or mobile phones)
Removing a single zip code or changing a bid by 10% could free up some ad spend that could be reallocated to an area or campaign with a higher ROI.
Looking at your website, On-Page optimization is another way to improve ROI. Things to evaluate are:
- Do you have a strong CTA (Call to Action)?
- Would using a dedicated landing page increase your conversions?
- Can they access your phone number or contact form without clicking (they need to see it within 3 seconds after landing on your site)
- Is your contact form brief? People are less likely to fill out a lot of required information.
- Does your content include top-ranking keywords? Your top ranking keywords should be in your ads and on your website and landing pages.
Make sure that your users are performing the task that you want them to once they’ve clicked through to your website. Metrics like the number of “pages viewed” or “time on site” can be misleading. What if your customer finds what they are looking for and makes a purchase right away? In that case, time on site and pages viewed would be low, but still have a successful conversion.
Get your customers where you want them to go. The longer they linger on your website without taking an action, the more chances there are to lose them to another Google search! Another search means your competitors will get the next chance to satisfy the needs of the customer.
5. Utilize Other SEO Tactics
Another way to extend your PPC budget and fight the diminishing return is to begin targeting keywords found in your PPC ads with search engine optimization (SEO) tactics. Cultivating content that will lead to free (organic) clicks for keywords will allow you to concentrate your paid campaigns on more competitive keywords.
Here at Whiteboard Marketing, we are huge proponents of owning as much real estate on the Search Engine Response Page (SERP) as possible. Digital marketing is always most effective when different marketing channels work in tandem. For example, paid search ad performance (PPC) increases when your search terms are clicked on through organic traffic (SEO), saving your ad budget for additional clicks. The image below illustrates how PPC, SEO, and other digital marketing tactics work together on a SERP. The “Ad” is PPC, the “Map Pack” is a combination of PPC and local business listings, and the “Featured Snippet” and “Organic Search Results” are efforts from SEO. Utilizing all of these strategies means your business could appear multiple times on a Google search page.
Cost Per Click Over Time
The devil is in the details, and Whiteboard Marketing has run thousands of campaigns across different media outlets for both small business and corporate clients. The idea is to continuously improve every campaign in order to maintain a steady flow of customers and revenue.
At first, the CPC may come in higher, but as a campaign is optimized, the CPC should go down. The competition is always improving, and you must improve at a rate faster than them to increase your market share. Using PPC as a part of a digital marketing strategy is great for an immediate impact. The market will dictate the maximum budget based on competition and available impressions. Listen to the market and be prepared to increase your budget if there is opportunity, and continuously optimize to improve results.