Never set a PPC Budget, start with a WHY

The biggest mistake we see people make is starting a PPC conversation with budget. If the campaign is making money and your conversions are within a CPA that makes it profitable for your business, then why cap your potential by setting a budget, which is essentially a spending limit.

The businesses who benefit most from PPC campaigns are the ones who see them as an investment, rather than an advertising expense. PPC campaigns should always be an investment, bringing back more money in revenue than it costs to run the campaigns. This question of revenue attribution comes back to how well the enquiry and sales process is tracked.

To really get the most out of a new PPC campaign and to quote Simon Sinek, first, we must ‘start with why’. It is this approach that differentiates JRC Marketing from many other digital marketing agencies.

  • Why are we looking at running a paid advertising campaign for this product or service?
  • Is your offering scalable – no point in generating 100 enquiries per month if you can only fulfil 10.
  • Can the company cash-flow handle the potential increase in business – (you may offer better terms to your customer than you get from your suppliers).

There a few numbers, however, that are critical to consider when launching a paid search campaign.

GP – What is the desired outcome and in real terms what is the return. If somebody clicks on your advert, come through to your site and buys your product or service what does the company make – Gross Profit, not Sales Revenue! 

CPA (cost per acquisition). It is with this figure that we can determine the viability of your campaign. For example, if your CPA is £100 and the cost per click is £100 there is no viable business model here! Stop – talk to us about social, SEO, telemarketing or some other form of promotion.

Then we get into the detail – 

Search Volume – do enough people even search for your product or service on the internet.

CTR – Based on the search volume we can provide a range of expected Clicks using our experience in your vertical for CTR (Click Through Rate).

Conversion Rate – what % of those clicks translate into enquiries and critically what % of those turn into deals. If a PPC company tells you this is completely out of their control they are not a good partner. We work with you to ensure your site and sales funnel converts, making every pound spent on PPC work harder and harder.

So, once all the above prep work has been done (some of which has to be a trial but most can be estimated). We can then start to think about how much money you want to make and how much it will cost to make that money.