You’ve probably heard people say that in business, you can’t make money without spending money. While some business advice can be taken with a grain of salt, but in the world of marketing, this advice is true.
Pay Per Click (PPC) has been and will continue to dominate in the world of marketing, but how exactly does PPC work and is it right for you and your business?
How Does PPC Work?
Pay Per Click is a highly used and well-liked form of paid digital marketing. This type of advertising is advantageous to companies since it will only charge them when their ad is clicked on by a user instead of spending unnecessary amounts of money.
PPC puts the action in the users’ hands by allowing them to create content and choose the audience it’s shown to while only paying for the action it gets. It can be used across a variety of social media platforms like Facebook, Twitter, LinkedIn, YouTube, and more.
Is PPC Beneficial for Your Business?
“I’d rather just focus on SEO because I’ve heard PPC is just a waste of my money.”
The people out there who tell you that PPC is a waste of money likely have had a poorly executed strategy. A good combination of SEO and PPC is generally recommended for most businesses. Spending the time and effort to build a good organic search base (SEO) is always important, but it takes time and energy. This is what we call a long-term strategy. While your SEO efforts develop we generally recommend bridging the gap with a more aggressive PPC campaign. A short-term strategy. Once your SEO efforts start to gain traction we level off the ad spend with PPC so we have an even combination of digital marketing efforts in play.
One important thing to consider is if Pay Per Click is in your business’ budget. In this case, the factors that determine budget includes the audience you want to reach, the top products or services you want to focus on pushing, and who your competitors are. These factors will all determine the CPC (Cost Per Click) and ultimately how much you will end up spending based upon the budget you set.
Understanding PPC Numbers
It’s easiest to explain PPC numbers by looking at an actual client report. Below is an actual example from one of our clients PPC reports in April 2019.
In April 2019, Client X generated 7,058 clicks on their PPC ads. This means 7,058 people visited their website by clicking on one of their ads.
Client X had a total PPC campaign cost in April 2019 of $5,783.38 and an average CPC (Cost Per Click) of $0.82. This means it cost our client $0.82 each time someone clicked on one their ads and visited their website.
Client X in April 2019 had an 8.1% Conversion Rate on their ad campaigns and an average sale of $212.60. This means that out of the 7,058 people that clicked on their ads and visited their website they converted/sold 8.1% of those visitors or 571 people.
So Client X’s average sale in April 2019 was $212.60 and out of the 7,058 clicks they received on their ads they had a 8.1% conversion rate. this means they converted (sold) 8.1% (or 571 people) of those visitors they had sales from their PPC ads that totaled $121,394.60 ($212.60 x 571). That’s a profit of $115,611.22 and a return on their $5,789.38 investment of 1,099%.
Another way of looking at is through the eyes of an actual brick and mortar location (your location being your website). If you invested $5,783.38 in marketing and you were able to get 7,058 people (clicks) to walk through your door and into your business and out of those people you were able to make a sale to 571 of them then I’d say you’re doing pretty well figuring your average sale is $212.60. You don’t normally see that high of an ROI with any form of traditional marketing.
Sometimes it’s easier to break it down into real scenarios to truly understand the power of PPC marketing.
Platforms That Utilize PPC
You’re probably more familiar with Pay Per Click than you realize. Whether you know it or not, you’ve interacted with PPC ads at one point or another.
Google Ads is one of the most utilized platforms when it comes to PPC. It’s a great platform to use simply because it targets users who are searching for products or services like those you are offering.
You’ll also notice that Facebook utilizes these types of ads as well. Unlike Google, Facebook will pair with Instagram. It also allows you to re-market (also called re-targeting) to previous audiences while appealing to new customers.
You can use your budget to dig into each platform in order to figure out which works best for your business. You might even find that you want to utilize both to your benefit.
Allowing Pay Per Click to Drive Your Business Forward
So how does PPC work with your business? It may seem like a lot of information to absorb to someone who is just starting to learn, but Pay Per Click has been found to increase sales, drive leads, and attract traffic, as shown in our client’s example above. PPC allows your business to get in front of audiences who are already on the hunt for a product like yours. Are you interested in learning more about how we build successful PPC campaigns give us a call or contact us here.
About The Author: Kevin Watts
Kevin Watts is the founder of Raincross, a premier web design, development and digital marketing agency headquartered in Riverside, CA.
Kevin got his start in online marketing and website design by working for some of the most prominent names in online retail. He's most recognized for helping to start e-commerce retailer Organize.com in 1998, and spent 12 years running the company's e-commerce and online marketing operations. He has been recognized and has received several online retail, marketing and merchandising awards throughout his career.
Kevin grew up in Riverside, CA and graduated from the University of Wyoming. In his spare time, Kevin is an avid fly-fisherman, college football fan, and enjoys spending time with his son Matthew, daughter Kate and wife Lindsey.
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