At SEE (SearchEngineEthics.com) we also provide Pay Per Click (PPC) management services. We bring our same straight forward approach to the management of PPC. That said, PPC is a different beast than SEO. Below we’ll highlight how PPC is different and explain how we manage PPC to maximum ROI.
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PPC, as you probably already know, refers to ads sold by the search engines that accompany the un-paid or organic results targeted by SEO. As the name suggests these ads are sold on a per click basis.
Our PPC Management Approach
1. Set Realistic Goals – Especially Regarding ROI for PPC
Setting realistic goals is key to a successful campaign. The most important KPI for most PPC campaigns is: ROI
Total ROI is generally the function: “ROI = Gross Profit / Total PPC Cost” however, the way you account for these variables will greatly affect your perspective on ROI.
ROI expectations should be fairly low in most markets as PPC is becoming quite mature. In fact many companies in established markets have a negative ROI expectation for what I would call “Immediate ROI” – that is, the ROI of initial purchased generated via PPC. So how do these companies make money? The key for them is in capturing new customer information to be able to sell these customers additional products at a profit, typically via email marketing.
This brings us to another valuable measure: Customer Lifetime Value. When calculating ROI it is important to consider your business model, to create a measure that matches your actual business model – otherwise, your evaluative standard will not accurately reflect your goals.
We are able to estimate target ROIs at the beginning of a PPC campaign using a variety of data sets and our extensive experience to guide your decision making process.
To maximize ROI for a PPC campaign there are 2 significant sides of the equation to affect:
- Maximize Conversion Rates
- Minimize Cost Per Click
Note: these aren’t absolutes, but rather guides to success. What one does within this frame work is dependent on the parameters defined for success.
Maximize PPC Conversion Rates
Maximizing the conversion rate of traffic that you drive to your site via PPC is the single most important factor that will affect your ROI. No matter what your goal is, it is important to have some measurable action so that you know the effectiveness of the PPC campaign. Typical measurable actions are: a purchase, sign up (eg a newsletter), contact (ie a phone call or contact form – also known as lead gen). Other measurable actions could be as simple as clicking a link or staying on a page for a certain amount of time, however these are less clear winners.
There are several critical inflection points where the conversion rate can be affected, some of these are:
- Keywords Selected
- Ad Copy
- Ad Position
- Landing Page
- Conversion Path
Each of these and sub points within each can have a tremendous impact on conversion rate.
Minimize Per Click Costs While Maintaining Maximum Conversion Rates
Obviously, the lower the CPC (Cost Per Click) the higher the ROI – right? Well, not necessarily. If one achieves a lower CPC by bidding on less popular keywords, then one may very well experience a lower conversion rate, if the conversion rate goes low enough, then the ROI will drop as well.. The real point here is to test everything. The brilliance of SEM & PPC is that nearly every aspect of the user interaction can be measured and accounted for. This means we can test to see what the ROI of a given keyword is, we can even measure the ROI for the keyword at a given time of the day or day of the week.
In the end testing every aspect of the PPC campaign leads to maximum ROI. This process can take quite some time depending on the number of keywords and markets under management. Additionally, the on-site conversion optimization is not included as part of standard PPC management.
We will address each of these issues in our campaign bid and planning.