Pay-per-click Marketing (PPC) is not as easy as 1,2,3, so SEOversite is here to help break it down for you. We stuffed you full of great info in our last Pay Per Click (PPC) article, covering impression shares, click through rate, time on site, and conversions. In round two, we’re dissecting the stuffing and showing you how to better understand what and how you are paying for your Google Adwords and other PPC advertising. Read on for your guide to PPC advertising…
Budgeting for Your Pay Per Click (PPC) Campaign
Let’s return to our fictional campaign John’s Stuffed Animals. We have a new line of stuffed dolphins we are looking to launch (Dolphins love “Pay Per Trick” but here we focus on Pay-Per-Click). After considering our sales goals and marketing budget, let’s say we are comfortable spending a total of $10,000 on a campaign to launch Dolly the Dolphin. What can we expect from this investment and where does the money really go?
- A Beautiful Landing Page that Improves Conversions (Leads)
First we will need the web marketing team to build a quality landing page that showcases Dolly in all of her glory. After all, we are paying every time the customer clicks so we want those clicks to convert! We improve our chances with professional dolphin photography, clear information about our specialized process to make long-lasting stuffed fish, and proper calls to action and requests for contact and order. We might budget $300-$1,500 to cover the costs of the initial landing page design fees necessary to build one or more conversion-friendly landing pages.
- Around 75-82% of Your Monthly PPC Spend will Literally Pay for Clicks
Now that our web team has completed the splash zone (landing page), we must determine spend per click. Depending on location, search volume for keywords, specificity of phrases being targeted, etc. the price rises. A rule of fin is that more competition means higher price per click and the more specific the search phrase the lower your cost-per-click. Note that this won’t necessarily bring you better results so work with your web team or our SEOversite crew to figure out the best keywords and phrases to target within your budget.
Because you only pay when someone clicks, there is no way to know for sure how successful your choice of key phrases will be until you begin the campaign. We may have set our monthly budget at $3000 for a two month campaign, but if the campaign is not attracting clicks, we may not spend the entire budget. Alternatively, if the campaign is popular it may be depleted within a fortnight. Your web team should be working to hone the campaign and keywords to find the best return on your click investment which takes energy and focus early.
- Your Web Team is Not Working on Your PPC Campaign For Free
If we have decided to spend around $3000 per month on PPC, that money is paid directly to Google, not the web marketing team (who should be designated, at a minimum, as a Google Certified Partner or Google Certified Premier Partner and be overseen by SEOversite in our humble opinion) . Most web teams will charge around 20% of your PPC spend (not budget!) as a management fee, which is quite fair. In our case, our PPC campaign to launch Dolly was a success and we spent $2997 in PPC for the first month, which means we will also be paying an additional $600 or so in fees to the web team for their work managing the campaign. We are happy to spend the money since they A/B tested different keywords, optimized the campaign, and showed us through analytics and robust tracking that our conversion on the campaign is 2.6% — pretty good work from the web team!
What’s Next Once I Get Started with My Pay Per Click Marketing Campaign?
The first month of Dolly’s PPC campaign is in the books — time to see how we performed! We measure this with Cost-per-Acquisition (CPA) which is a fancy way of saying “How much did we pay for those visitors who actually bought something?” To calculate CPA we need divide our total spend ($2997) by the number of users who bought something through the PPC campaign. With 200 sales we could link to the campaign, we can see that our CPA is $14.99 ($2997/200). Each Dolly the Dolphin sells for $39.95 and costs $10 to manufacture — after 30 days of our 60 day campaign we can see profit of around $10 per Dolly the Dolphin “sail” or a net income of $2,000. We now know we are on the right track and will work with the web team to see if we can get even better results next month from an even more efficient PPC Adwords campaign. We also know everyone is just flipping over Dolly.
If this all still seems overwhelming, reach out and SEOversite can help! Most of our help is free and our paid services are quite reasonable. Email Guardian@SEOversite.com or call 305-455-0720 for more information on how SEOversite can help.