Getting Return on Investment from PPC
"Return on Investment" (ROI). It is a business school basic and a fact of life. If you get less out your efforts than you put into them, you're going backwards, not forward – and, eventually, you will be bankrupt.
One investor takes a chance on a start-up company and makes millions. Another puts her life savings into a "sure deal" and loses everything. Return on investment can make or break any operation – and it is a primary consideration for anyone considering a pay-per-click (PPC) campaign.
Before you chance a dime on Google AdWords, Bing PPC, or any other means of gaining more business, consider the potential and probable ROI of your actions. You won't know the actual results until after you've taken the plunge, but you can (and should) perform a pre-launch analysis of your situation to give yourself the best shot for success.
Does Anyone Really Win with AdWords?
If the probability of favorable ROI from an action isn't likely, there's no use wasting your time even considering it. Let's begin with a few case examples from users of Google AdWords – the most popular means of paid advertising on the internet, and a venue where each click can cost up to $50.
Google AdWords works for large companies, perhaps, but can a small business realize significant ROI there?
These companies gained business and increased revenue through AdWords campaigns:
- In 1988, the first Roy's Restaurant opened in Honolulu. Today, there are 31 locations and Roy's is in eight states on the mainland. They were early experimenters with mobile-only search, an option now simple to execute with AdWords – and, in 2010, Roy's restaurants used PPC to increase customer calls for information by 40%, paving the way for an ROI of 800%. Would you spend one dollar, if you knew it would bring eight dollars in return?
- Suzanne Golter is an animal lover extraordinaire, and she parlayed that affection into Happy Hound, a daycare and boarding facility for the lucky, pampered residents she serves. Her background in marketing provided an excellent grasp on the identity of her prime customers, so she began testing the various channels of reaching them – from magazine ads to getting out the word online. Today, Suzanne says she has determined the winner: AdWords brings in 90% or her business, developing an average of 40 new clients every month.
Of course, there are also plenty of examples of companies that lost money on Google AdWords campaigns.
Managed wisely, AdWords and other PPC campaigns can provide a healthy ROI. Done incorrectly, PPC can be an exercise in futility.
And that is why you want to start building on a strong foundation. Here's how to get started:
What makes the difference between success and failure with PPC?
That really is the big question, isn't it? When you are sure of getting a positive ROI, your only concern is about the magnitude of effectiveness. But when your likely outcome is a negative ROI, it's about as wise as flushing money down the drain. You work too hard for your cash to throw it away.
Successful PPC campaigns start at the beginning – they build from an informed foundation of critical insights. You may be in a rush to get going with PPC, or you may have already jumped in and now you are floundering and want to recover. Even if you are already on board and realizing a profit from your PPC efforts – these considerations are paramount.
How to Launch a PPC Campaign
When getting started with PPC, here are some of the questions you need to consider:
What are your goals?
How will you know when your efforts are successful? Are you seeking increased inquires and orders? Do you want to build your brand? Are you struggling to rank in search results and want to be sure your link gets seen by prospective customers or clients? All of these are excellent reasons to get going with PPC, but it is imperative you define your personal objectives and determine how you will know whether or not they are being achieved. Otherwise, you're just shooting in the dark, hoping to hit an unseen target.
Are your landing pages ready?
PPC is called "pay-per-click" because that's how it works: every time someone clicks on your link, you pay. But getting clicks isn't enough. In order to realize sufficient ROI from your PPC campaign, you need to make sure the clicked link takes the viewer to a page with a high probability of getting the reader to take the next step in your sequence – whether that is requesting more information (lead development), placing an order, receiving a message, or some other action.
[MORE: 12 Tests to Increase Your Landing Page Conversion Rate, Starting Today]
What words and phrases do potential customers use to search for your product or service?
Stuart Draper is the CEO of Get Found First, a company focused on helping clients get the most out of pay-per-click advertising. Here is what Stu has to say about the keyword prep work necessary for PPC:
Put yourself in the shoes of the potential customer getting ready to search for what you sell. What keywords and phrases might they search? Before doing anything else, do a few of those searches yourself. What do you find? Who is advertising? What is their value proposition? What calls to action are they using?
As you search using variations of the keywords, do you see all of the same competitors or a large variety? A large variety means the space is very crowded with lots of advertisers fighting for space. If you don't see any advertisers, it may very well be that you don't have a good product or service for search advertising. PPC isn't for every product and service. The one area where I see the most failure in PPC is new inventions. People can't search for something they don't know exists.
This article begins a series of posts aimed at helping those who are curious about PPC, who are just starting out with PPC, or who may be about ready to give up on the idea of PPC advertising altogether.
Our hope is that many who have yet to take advantage of the leverage PPC offers will be able to grasp the concepts involved, walk through the preliminary considerations, and launch a PPC campaign that will generate a healthy return on investment.
In the next installment, we will dig deeper into the foundations: your goals, your landing page, and your keywords.
This is a guest post by Don Sturgill, a freelance writer and speaker from Bend, Oregon—PPC capital of the world. Don is the author of The Roadmap to Freedom, a work focused on helping entrepreneurs reach their dreams.
This post originated on the WordStream Blog. WordStream provides keyword tools for pay-per click (PPC) and search engine optimization (SEO) aiding in everything from keyword discovery to keyword grouping and organization.
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