The Hidden Value of PPC

Beyond PPC’s utility as a sales or lead channel, it has a hidden value I believe is often overlooked. PPC advertising can help create instant answers to the challenging questions most Internet marketers confront.

Using PPC, your business can quickly get answers to questions like the following:

• Is our sales pitch creating interest and curiosity about our offerings?
• Will visitors to our website convert into a sale or lead?
• Are there enough potential prospects to create a sustainable sales or lead funnel to build or maintain a profitable operation?

Ask some or all of these key questions as you build your Internet marketing strategy, since your website must be able to generate enough interest and curiosity among prospects that will lead to business. Define various scenarios that will help you test out your theories. A great PPC strategy should also focus on the how and why of whether you found success (or failure). Using PPC as a testing tool is ideal, because you have total control over the initial interest and the ability to track behavior throughout the entire conversion process.

Smart marketers realize that a high-performing PPC strategy is not just about obtaining the best cost per action (CPA) for a sale or lead, but addresses which marketing and sales efforts will yield a positive ROI. Create a testing environment that continually refines your sales messages to align with customers’ interests. The more you understand about how marketing messages need to relate to the online buying process, the more finely-tuned your efforts will be, bringing you better results. Before I discuss what it takes to advance a PPC strategy to this level, let’s first review ways to ensure you can obtain the best CPA.

Allocating a PPC Budget

Photo credit: 401(K) 2013 / Foter / CC BY-SA

PPC makes it possible to track your marketing return on investment, since PPC can track and measure from a searcher’s initial click on your ad all the way to the sale or lead (and even activity in between). A great deal of Google’s own business success can be attributed to the fact that advertisers of all sizes found a direct connection between real results and their marketing spend. Establishing the value of a marketing effort is now much easier to do. The old advertising truism that “I know half of my ad spending is working, I just don’t know which half,” is quickly becoming history. For experienced PPC advertisers, this is now a marketing channel where you don’t question whether it will work, but focus instead on how to make it work better.

A sound PPC strategy starts with a reasonable budget. Prices of PPC “clicks” are based on a number of factors, including:

• Your willingness to be placed at the top,
• The number of competing advertisers,
• How many searches are being performed (search volume), and
• Quality Score, a scoring mechanism that Google applies to an ad’s performance.

All of these factors combined will define what you spend on PPC. When you have a limited budget, the display times for your PPC ads will randomly be limited by Google in a situation of high click cost and/or search volume. The downside to this is not being able to understand when is the best time to display ads to your prospects.

So, instead of pursuing a broad market strategy with a small budget, it’s better to focus on a targeted audience with a limited scope. Select just a few or even one of your products or services to promote, choosing a margin leader or a best-in-class in your industry. You can also pick search terms that are further down in the sales funnel and used by searchers who are ready to take action quickly, in hopes that a buying decision will be more impulse-driven. If you have a limited budget for PPC, you’ll have to accept some trade-offs in how you advertise. Instead of focusing on spend targets, establish instead a cost per action (CPA) that works best for your business and create a budget target from that.

Budget by Search Intentions

In PPC advertising, understand that not all search phrases are created equal. Typically, terms aligned to various stages in the buying cycle will have very different costs. For example, in some of the most expensive PPC bidding, lawyers are competing for leads to represent mesothelioma cancer victims. Google estimates the search term cost for “mesothelioma” as $87.17 per click, while “mesothelioma lawyer” is $186.60. Clearly, from this bidding, advertisers have realized that one term is out-performing the other. You may wonder, if a “lawyer”-related term does better than the more general terms, then why not just bid on the high-value terms at the end of the buying cycle?

The answer has to do with what is called attribution or assisted conversions. Through research and website tracking analysis, it’s been proven that visitors often make multiple searches during the buying process. They perform many related searches, especially in complex scenarios requiring more research. As in the example of people suffering from mesothelioma cancer, even though these victims are not “buying” a lawyer, they are “shopping” for the right attorney to represent them. Thus, informational search terms such as “mesothelioma” represent the initial starting point in the shopping experience and can assist in the overall conversion process.

Assigning budgets at all stages and understanding their contribution to the process is a critical technique for managing complex PPC spending. If your PPC efforts allocate the whole budget to just certain stages, you risk creating longer-term limitations by not having your ads seen in all of the buying stages. Depending on how complex your sales process is in B2B situations or brand selection in B2C, your overall cost of doing business could be higher. Referring back to the Zero Moment of Truth concept, PPC has the ability to shape your business reputation even before prospects visit your website or engage with you. That’s because the more your prospects see your presence in the search results, the more they perceive that your business is a key player in the market.

The ideal PPC budget plan is one that looks at what it will take to dominate a specific keyword group in the search engine results page and one that also complements your organic listings. Define a strategy that ensures your business is seen at all the relevant stages of the buying cycle, along with the appropriate calls to action. Finally, be sure your PPC budget takes into account your target CPA, and use that to measure success instead of a simple budget spend total.

Photo credit: Edgeworks Limited / Foter / CC BY