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PPC is often thought of as a lower-funnel channel, used to “close the sale” after a prospect has been warmed up with content elsewhere.
But PPC can fit anywhere in the buyer journey, especially with B2B customers.How B2B Differs From B2C
First, and maybe most obvious, B2B products and services are rarely bought online.
Users don’t put a six-figure software solution into an online shopping cart and pay for it with a credit card.
That’s not to say that there aren’t any B2B purchases made online – there are.
But more often than not, B2B is focused on lead generation – users filling out a form asking for more information, or to download an asset such as a white paper.
That’s why content is so important. We’ll talk more about content later in the article.
B2B also has longer sales cycles than many B2C purchases. The B2C purchase cycle often looks something like this:
Hey, my running shoes are worn out.
I need new ones.
Let me jump over to Zappos or Amazon and grab a new pair.
That’s it – and the cycle may only take a few minutes.
In B2B, sales cycles of 12-18 months or even longer are common. Prospects are doing extensive research.
There are many steps along the journey. Almost nothing is bought on the first visit to the website.
And I’m not just talking about retargeting with a few “Hey, come buy what’s in your cart” messages. Much effort is put into the messaging that should be used at each point in the buyer journey.
Multiple decision-makers are often involved. Frequently, someone other than the decision-maker is doing the searching.
For example, the person who will ultimately use the product might kick off the search, and share the information with their boss, who makes the final purchase decision.
When you’re talking about high-dollar purchases, entire committees can get involved.
All that said, at the heart of it, there are many similarities between the B2B and B2C buyer journey.
At the heart of it, people are the ones doing the searches.
We’re all people.
We have interests, likes, and dislikes.
In many ways, what works for B2C also works for B2B.
The key is to meet users where they are.
But there’s really no such thing as a “B2C platform.”
Who uses Facebook? People do!
Now, some platforms are better suited to B2B than others, but it’s certainly possible to effectively target B2B prospects on Facebook.How PPC & Content Work Together
By now, you probably have the idea that it won’t work to keep showing the same ad to a prospect over the course of a 12-18 month buyer journey.
Talk about stale content!
To make your digital marketing program successful, you’ll need to understand your buyer journey and identify available content.
For example, you might have an informational video, a couple whitepapers, an ebook, and a free trial.
Generally, a video falls near the top of the funnel, in the research stage.
Ebooks and whitepapers are in the middle of the funnel.
A free trial is most effective for users who are near a purchase decision.
Look at all your available content and align it to the buyer journey stage.
These actions may or may not “count” as conversions in your CRM, but they absolutely count in PPC.
Give yourself something to measure user engagement, so you can set up remarketing later.Aligning to the Buyer Journey
Now, it’s time to align your keywords to the content and buyer journey stage.
Think about which keywords people might use when first thinking about your product.
Searchers will probably use broader keywords in the early stages of the process.
For example, let’s say you’re selling accounting software to businesses.
Users might search for “accounting software,” “payroll software,” or even “accounting solutions.”
Mid-funnel keywords in this example could include “best accounting software,” “accounting software reviews,” “how to use accounting software,” etc.
Finally, intent-based keywords come at the bottom of the funnel: brand terms, along with “buy,” “try” and “demo” keywords.
Best practices for PPC still apply here.
Be sure to match the keywords to the content.
Identify any gaps in your content and work with your content team to help fill them with additional assets.How Audiences Factor In
No discussion of PPC would be complete without talking about audiences.
If you’ve aligned your content correctly, PPC can give great insight into audiences you can use for future retargeting, as well as in other channels such as paid social.
So how do you decide on audiences?
One obvious way is to create retargeting audiences based on page visits.
Users who visited your upper-funnel content can be retargeted with mid- and lower-funnel content to try to encourage them to convert.
There’s almost no reason not to build audiences based on page visitors.
If you’ve gone to the effort to align your content to the buyer journey, you should be retargeting to them – period.
Use audiences from other channels for retargeting, too!
If someone came to your site from content on Facebook, for example, set up an RLSA audience in search to keep them moving down the funnel.
Paid social audiences are a great way to identify who users are.
Bid on broad keywords for this audience!
Terms like “accounting” that would normally be cost-prohibitive can perform well when used with a known audience.
I love to add audiences for observation, as well.
Look through the in-market and other audiences in Google and Microsoft Ads. If they’re relevant, add them for observation.
There’s no reason not to gather performance data that you can act on later, either with bid adjustments or with a targeting campaign.
If your company has first-party audiences, so much the better. Upload them and target them!
One caveat with first-party audiences is audience size.
Match rates are fairly low in the search engines – about 50% at best – so make sure you have at least 20,000 users on your list, or you’ll find little to no volume for them in your search campaigns.
Remember that users need to both be on your list and search for one of your keywords for the ad to show.Measuring Success
Now that you’ve spent time and effort on matching content to the buyer journey, identifying the right keywords, and creating audiences, it’s time to measure success.
Hopefully, you already have good conversion tracking in place, but if you don’t, do that now.
Micro conversions are especially important for upper-funnel content that doesn’t generate form fills.
Resist the temptation to gate 100% of your assets.
People in the early stages of research won’t want to fill out a form just to watch an overview video, but you still want to know how many people watched it.
Once you’ve set up micro-conversions, take it a step further.
It’s important to know how individual content is performing.
That’s straightforward – just create a separate landing page for each asset, and track performance by page.
But you’ll also want to measure performance along each stage of the buyer journey.
For instance, how well is your awareness content performing compared with decision content?
One way to do this is to create a content ID system.
Assign each piece of content an ID that parses out:
The title of the asset.
The stage of the buyer journey.
The type of content.
This way, you can easily roll up the data at multiple levels.
Don’t skip this step. It’s critical to come up with a plan for tracking the performance of your content across different channels.
While there are assets that will fare well in specific channels and poorly in others, some will rise to the top as strong performers overall.
Focus on promoting that content heavily and try to replicate it.
Also, consider which asset types your audience responds to.
Do they prefer videos?
Do they like to download white papers to read and share?
Thinking about this at the outset will allow you to set up a tracking system where you can pull the data and insights you need to make decisions.
You might also find that some content has been misclassified in the buyer journey.
Maybe you assigned a whitepaper to the top of the funnel, but it’s driving a lot of hand-raisers and might perform better against mid-funnel keywords or as a retargeting piece.
The key is, make sure you’re able to collect data at its most granular level.
You can always roll up, but it’s impossible to parse out if you haven’t set up tracking to do so.
Understanding the buyer journey and aligning your PPC campaigns to it is going to be critical for success in 2023 and beyond.
You're reading Ppc & The B2B Buyer Journey: A Primer
Consumer priorities are shifting rapidly as the world faces an unprecedented healthcare crisis.
Sensitivity to consumers’ needs is more critical than ever.
Brands must think carefully about how to engage with consumers in meaningful ways that not only increase conversions but help build brand trust.
Throughout the day, we consume content from blogs, news channels, television shows, social media channels, etc.
All of that content has the potential for native ad placements, which is why the native industry can be complex.
Advertisers know that in order to reach their target customers, they need to have a presence on channels where consumers spend their time.
This is where native comes into play.Is Content Network Targeting the Same as Native?
In short, no.
But native today isn’t the contextual targeting of yore.
Microsoft deprecated the content network in 2023.
However, Google Ads still allows content targeting in the Google Display network.
Unlike the content network, native ad placements are not based on the keyword or the keywords within the article on page, they are based on audience targeting.
It is worth noting that Google Ads still allows content targeting in the Google Display Network based on:
Topics: Pages about specific topics. Google Ads uses factors such as text, language, links and page structure to determine the topics of a page.
Placement: Specific websites, or subsets of a website.
Keywords: Just that, keywords.
Display expansion for search: A combination of automated bidding and smart targeting.What Is Native Advertising?
The publisher controls and is responsible for rendering the ad.
For example, a native ad might show up within an article you’re reading on your favorite online news source, or as a post on your Facebook feed.
In-feed placements appear directly in the article or blog post.
Recommendation widgets appear on a publisher’s website and presents recommended content or products that are related to the content you’re already consuming.
Promoted listings, also referred sometimes as sponsored content, are designed to fit seamlessly into the browsing experience.Is Native Advertising Programmatic?
It depends. (A marketer’s favorite answer.)Is Google Display Native Advertising?
Yes, Google Display & Video 360 has native creative formats that can be integrated into a display campaign.
The native creative can target:
App install (Google Play or Apple App Store).
Site creative (square or rectangular display format).
Video (similar to site creative, but uses video instead of an image.)Is Microsoft Advertising Native Advertising?
Currently, Microsoft Audience Ads are available in three formats:
They can be set up as part of an existing search campaign that is extended to native or as a separate audience campaign.
Even if you choose to opt into the Microsoft Audience network from within your search campaigns, the ad placement is based on audience targeting using the Microsoft Graph.
The Microsoft Advertising Graph captures billions of signals across our consumer products, such as browsing data, search history and behavior, and deep profile data from LinkedIn.
Microsoft’s audience network spans:
A wide range of brand-safe environments, including MSN, chúng tôi and Microsoft Edge.
Select premium partner properties such as CBS Sports, Everyday Health, Fox Business, the Atlantic, Apartment Therapy, and Reuters.
According to ComScore, the Microsoft Audience Network reaches 92% of the online audience throughout the U.S.AI-Powered Placements Focused on Quality & Giving Complete Control to the Advertiser
The audience network was created with two priorities in mind: quality and control.
Control encompasses its ability to provide brand-safe environments and data privacy.
Microsoft enforces strict publisher standards and reviews and publisher partners are closely managed and thoroughly vetted.
Global blocklists and the ability to exclude certain sites gives you even more control – and peace of mind.The Success of Native Advertising Depends on Trust
How do organizations establish and maintain consumer trust?
By putting long-term strategies in place for actively engaging with consumers, listening and acting on customer feedback, adhering to data privacy and protection, and being transparent and authentic.
iProspect proposes that there are three key components to consumer trust: credibility, relevance, and reliability.
Is your brand competent and legitimate?
Do you listen to and act on customer feedback and provide relevant content, products, and services?
Do you deliver a consistent experience that meets customer expectations across every customer interaction?Native Case Studies: Reaching Untapped Audiences
Ads are credible, relevant and consistent – but not invasive or intrusive.
2X higher on MSN Infopane.
3X higher on publisher partner sites.
Volvo and marketing agency Mindshare decided to test the Microsoft Audience network as a strategy to support awareness and help maintain sales for their best-seller the XC90 luxury SUV.
They combined LinkedIn, gender, remarketing and In-Market audience data to find new audiences to target and to uncover previously untapped audiences.
The campaign drove significant traffic and exceeded their expectations with conversions:
65,000 incremental site visits.
CPA on-par with their non-brand search campaigns.
Running native campaigns in conjunction with search campaigns helped Buyerzone reach business-to-business audience.
1,700% increase in impressions.
20% profit increase on top of their traditional search campaigns.
75% decrease in CPC.
Alan Barish, senior online marketing analyst from BuyerZone said, “almost every single conversion we’ve gotten from the Microsoft Audience Network has converted into a lead, which is amazing.”Maintaining Trust & Engagement in Uncertain Times
Never in modern history has it been so critical to create meaningful connections between your brand and consumers, and earn and maintain their trust.
With data privacy rising to the forefront of consumers’ consciousness and as recent global events add complexity to the consumer-brand dynamic, delivering targeted, trusted and relevant content is a critical strategy for continued business growth.
Start with a foundation of trust, success is inevitable.
Test using native as a way for your brand to make meaningful connections with consumers that build trust and drive conversions, setting the stage for ongoing credibility, relevance, and consistency, even in uncertain times.
All screenshots taken by author, March 2023
We could call it Target Market Proximity, ROI Proximity, or Persuasive Distance. How closely your offering fits the search query comes heavily into play in terms of:
Writing ad copy
Choosing and creating landing pages
Defining target/acceptable KPI’sLow Hanging Fruit Keywords vs. Further Afield Keywords
Some keywords are slam dunks. They’re high volume, “head” (not long-tail) keywords, and people who are searching for them want what you have to offer. They produce great ROI. They’re the low hanging fruit.Action-Oriented Keyword Selection
The first way to think about this in terms of searcher intent is what action are they wanting to engage in.
If you’re booking hotel rooms in myrtle beach, the guy that’s searching for “book myrtle beach hotel room” is just who you’re looking for.
In order of low hanging fruit to more difficult to sell would be:
“book myrtle beach hotel room” – they’re ready to book
“myrtle beach hotel prices” – comparing prices
“myrtle beach hotel” – interested in the type of offering
“myrtle beach” – interested in your destination
“hotel” – interested in staying somewhere, anywhere
When someone is first thinking about Myrtle Beach as a destination, they search for “myrtle beach”. Once they’re thinking about really staying, they search “myrtle beach hotel”. If they’re comparing prices, “myrtle beach hotel prices”. When they’re ready to book they might search “book myrtle beach hotel”.
The important info for the PPC marketer is what are the search volumes, ROI, and extra work required for conversion at each stage.
Those are only intent keywords. As you might guess, there’s another level- because many people search for hotels by hotel name or national chain brand name.Focus-Oriented Keyword Selection
The next way of looking for low or high hanging fruit is in terms of how specifically the searcher is looking for you, as opposed to your category, competitors, or larger categories.
Above is the general view of this framework.
Here’s a more specific example:Approaches to Searcher Focus Keywords
Brand Keywords, e.g. “Dunes Village Resort”
These are the lowest hanging fruit. Someone is already searching for your offering. ROI is super high and so is conversion rate. We regularly see ROAS of 1000% or greater in these campaigns.
Some clients debate whether they would get these sales anyway without PPC. Several third-parties (iCrossing, and chúng tôi have done research that demonstrates the extra traffic and sales people get from doing PPC and SEO simultaneously for the same keywords. And PPC is stronger than SEO at warming up the sale. Ad copy can have a powerful effect on conversion rate and average sale. You can’t do that with SEO.
Category Keywords, e.g. “Myrtle Beach Hotels”
This is a good place to win new business. It’s harder, because you have to have a strong offer or benefit, and ROI may be lower (200-500% ROAS), but keep in mind the lifetime value of a new customer. You may have just won a competitor’s former customer, and you often get their permission to continue to market to them for months or years after the first sale.
Meta Category, e.g. “Vacations”
This is clearly more difficult. You have to sell them on your category AND your brand. But if you find a strong offer or selling technique, it’s another place to pull in more new business.
Competitor, e.g. “The Caravelle Resort”
This is harder than the meta-category, because someone is already thinking about your specific competitor. Just getting attention here can be difficult- that’s the job of your ad copy, and if your CTR from that is too low, CPC shoots up and you’ll never get great ROI.
Brian Carter is the Director of Search Engine Marketing for Fuel Interactive, an interactive marketing agency in Myrtle Beach, South Carolina. He is responsible for the SEO, PPC, SMM, and ORM programs at Fuel and its partner traditional agency Brandon Advertising & PR.
When you take these statistics into account, it’s not surprising that 27% of Americans are using ad blockers.
No matter what products or services you’re selling, one thing is growing increasingly clear: You’re going to need some pretty engaging copy to help yours stand out from this ever-growing crowd.
Of course, what’s engaging and what isn’t is a pretty subjective matter. You’re going to want to know what actually works and what doesn’t. This is where ad copy tests can come to the rescue.Don’t Test For Testing’s Sake
As a starting point, it is essential to have a hypothesis of what you think will enhance your conversion rate and why – at all times.
Here’s the testing methodology my company follows:Aim For Producing Clear Results
Always have ample data when you’re running tests!
Statistical significance should be your goal (in addition to that increased performance).
According to Google, your test should run until it meets one of two conditions:
At least one variant has a 95% probability to beat baseline (this free A/B calculator should help).
Two weeks have passed, to account for cyclical variations in web traffic during the week.Set A Testing Timeframe
Remember that tests shouldn’t be left running forever. Define a specific time frame to gain valuable data and stick to it.
Not every test will result in significance one way or the other and that’s ok. Chalk that test up as inconclusive and move on.
Now, with those ground rules out of the way, onto the tests!1. Numerical Abbreviations Vs. Full Numerical Values
Numbers also show that you’re a brand worth taking seriously – after all, you have data to back up your claims, right?
So basically, numbers are good.
The question then becomes:
What do you think your targets will respond to?
Would it be numerical abbreviations, for example, 15M, or full numerical values, for example, 15,000,000?2. Add, Modify, And Remove Pricing
On one hand, being upfront with your pricing gives users the information they need to know and can subsequently help them make a faster purchase decision.
On the other hand, the price can turn people off by reminding them that they need to spend money. This is especially true if your product and/or service isn’t the cheapest that’s showing up in the search engine results.
So how do you know which approach works? Testing.
We worked with a homebuilder client to test variations of price inclusion. After setting up a few tests, it became clear that by generalizing the number, we could increase CTRs across these communities.
You can also frame your price as a discount to make it more attractive to readers. And speaking of discounts…3. Experiment When Quantifying Promotions
In PPC marketing, it’s a common practice to quantify promotions with numbers, usually in the form of discounts, conditional pricing, and other special offers.
For example, instead of writing you have “cheap car accessories on sale,” you can write something more compelling, like “50% off on car accessories.”
Better yet, try testing your ‘discount’ with the top numbers that drive engagement:4. Punctuation?!.
One of the easiest places to start with testing is around punctuation, and yet, few focus on tests this “simple.”
Question Mark: 11%
Dollar Sign: 8%
Based on our own testing, the use of an exclamation point makes sense:
That said, the opportunity to test the use of punctuation (question marks, percentages, etc.) are worth exploring and align well with the use of emotion to drive incremental performance.5. Appeal To Emotion
What do they love/hate?
What’s the biggest problem they face?
How are you going to solve it?
Worst case, take a hint from headline categories that drive engagement on Twitter and Facebook.
While traditionally reserved for content ideation, using a headline analyzer like this one or this one can also help with the application of emotional headlines for ad copy.6. Test Your CTA
This is where language comes in, and it’s especially important when writing your CTAs.
As trivial as it may sound, the first word of your CTA has the potential to create a positive or negative impression of the ad itself.
The first word in your CTA could be the defining factor, so you need to test different first words (all of which should be verbs) in your CTA, and use the high converting copy.
For example, beginning with “Call us now,” instead of “Contact us today,” could lead to a noticeable difference in CTRs.
Likewise, “Shop now,” instead of “Order now” could lead to different levels of audience reaction.
Here’s a mashup of potential calls to action variations for you to test:
Start7. Play Around With Your Landing Pages
Naturally, landing pages are a great marketing tool, because they give your target market a chance to decide whether they should interact further with the business.
As a result, testing your landing pages is a fundamental part of doing business online.
Within Google Ads, there are a couple of landing page tests that you can easily do without making any changes to your website:
Link directly to the category page.
Try out different sorting methods on your category pages:
Best selling first.
Best reviewed first.
Link to a search made for a particular brand, product or type of product.
Link to your homepage (yes, it might work for you).
Pro Tip: Google Optimize is a godsend for this type of A/B and multi-variant testing (for both paid media and SEO).
When it comes to campaign optimization, you need to constantly be split testing like this and then analyzing your results. Otherwise, you’re doing your company – and your campaign – a huge disservice.What’s Next?
Following the steps above can help you to test your ad copy as best as possible before investing money in their placement. But what’s next?
Whether you experience success or find that you need to make further changes or improvements, ad testing should stay at the forefront of your list of priorities.
Remember A.B.T: Always. Be. Testing.
Featured Image: Minimallista/Shutterstock
“Am I profitable?”
It’s a question every PPC account manager is asked, but it’s also a question many account managers struggle with answering.
PPC marketers aren’t necessarily statistics wizards or mathematically oriented by nature, and there can be many factors that affect overall profitability.
While understanding Google Ads and the auction process at a deep technical level is crucial to the success of any campaign, understanding a business’ financial metrics is just as important – and it’s increasingly becoming more so.
Gone are the days where PPC was really the only place to put your money.
Now there is Microsoft Ads, Facebook Ads, Snapchat, Instagram, and the list goes on and on.
Money is diversified to many places, and there’s no silver bullet for attributing every dollar spent.
The best we can do is use some math as our guiding light.
Grasping the financial metrics will make you a better media buyer, and give you better results long-term, whether you’re in-house or agency side.
These calculations can feel daunting for some managers, but mastering these will put you miles ahead of most PPC managers in both knowledge and practice.1. Determining ROAS
People interchange ROAS and ROI often, but they are not actually the same thing.
The difference between ROAS (return on ad spend) and ROI (return on investment) is whether you account for a company’s cost of doing business (often referred to as COGS – cost of goods sold – or profit margin).
When you talk about ROAS, you’re looking at PPC profitability in a linear way.
When you talk about ROI, you’re looking at your PPC spend in a multidimensional way.
ROI tries to answer this question:
In this example, let’s say you sell shoes for $50 a pair. Your ROAS would use the $50 in its calculation.
But, pretend you have a 50% markup on those shoes. That means your total gross profit is actually only $25.
Generally, media buyers rely on ROAS, because they don’t have all the internal calculations feeding into Google Ads that would show them ROI.What You Need to Determine ROAS
Total Conversion Value
Total Cost of AdvertisingFormula to Use
Total Conversion Value / Total Cost of AdvertisingExample
The ROAS would be 2.78 or 278% (48,750 total value / 17,547 Google Ads cost)
You can report back to the client that ROAS for the past 30 days was 278%.Tip
Google Ads actually has a column specifically built for ROAS.
Except Google doesn’t call it ROAS, so you might pass right on by it.
It’s labeled as All conv. value / cost.
If your campaigns are accurately tracking conversion value then you can use this column to calculate your ROAS quickly.
If a site isn’t ecommerce, that means you probably aren’t tracking conversion values for each conversion inside the account.
You’ll need to calculate ROAS by hand using the information your client gives you.
If every conversion is worth the same amount, you can instead assign that value to a conversion type, which would allow you to use that column.2. Determining Break-Even ROAS
ROAS is nice and all, but it doesn’t give you the full profitability picture.
As you saw previously in our shoe example, products cost money to the retailer.
Just knowing your ROAS doesn’t tell you if you are making or losing money overall.
For example, you can have a client whose ROAS is a whopping 400%, but they’re still losing money once you calculate their profit margins.
As a PPC account manager, it’s important to first set a break-even ROAS for your clients.
Every client will calculate profit margins differently (do we include rent in our profit margins calculations or do we not include rent, for example), but determining a basic profit margin is the first step in determining your client’s break-even ROAS.What You Need to Determine Break-Even ROAS
Profit MarginFormula to Use
1 / Profit MarginExample
Let’s say you’re a travel agent that books first class and business class airfare.
Each ticket booked generates an average of $1,600 in revenue.
That’s before the ticket is paid for, though.
About 65% of that revenue goes to the cost of booking the ticket and 6% of the revenue is paid out to salespeople for commission.
First, subtract the cost of the actual ticket. This would be 65% of $1,600, which is $1,040. Subtract that from the $1600 in revenue, and revenue is now down to $560.
Then there’s the 6% for the salesperson, which is 6% of $1,600. That’s another $96, leaving revenue at $464.
Out of the $1,600 in revenue, your client makes a profit of $464.
In essence, your profit margin would then be 29%.
But that’s not the whole picture.
This calculation of profit margin doesn’t include potential costs of doing business like rent, taxes, and other overhead.
And if you’re an agency, it’s not accounting for the cost of you!
This is simply the cost of servicing the booked airfare.
So to calculate your break-even ROAS you simply divide 1 by your profit margin.
1 / .29 = 3.4 (or 340%)
To explain break-even ROAS in a non-mathematical way:
In our above scenario, anything over 340% ROAS, means you are making money.
If it’s less 340% ROAS, you’re losing it.Tip
Some businesses hyper-focus on linear profitability (making more money than they spend after accounting for profit margins).
This can be short-term thinking if their customers tend to produce lifetime value to the business.
Do customers come back and buy again?
Do customers typically refer friends?
Is it a subscription service with a monthly fee, and there’s an average span of subscription time?
Determining the average lifetime value of a client or customer can increase your profit margins and in turn decrease your break-even ROAS.3. Determining Cost Per Conversion for Forms
Many accounts track form submissions as a conversion action in your client’s PPC accounts.
However, attributing a value per conversion is tricky since some form submissions don’t represent any profit or revenue for your client, or the amounts can vary drastically.
As a PPC manager, you want to know what your true cost per conversion is.
In other words, how much you pay for a form submission that turns into a sale or a deal or whatever it is that makes the business money.What You Need to Determine CPA for Forms
Average cost per conversion (cost per form submission)
Average Form conversion rate (the percentage of forms that turn into sales)Formula to Use
Avg. cost per conversion in Google Ads / Form conversion RateExample
Let’s use our travel agent example from the previous formula, but you are tracking form submissions as a conversion action.
You know that your average cost per conversion for your Google Ads is $37.
In other words, you’re generating form submissions at $37 a pop.
You close about 15% of all the forms received through Google Ads.
$37 cost per lead / .15 close rate = $246.67
So, your true average cost per conversion is $246.67, based on that close rate of 15%.
Now, we can calculate your ROI based on the numbers we have above.
Using the calculation for ROI means (profit – cost) / cost.
The numbers work out like this:
[($464 (average profit per conversion we calculated before) – $246.67 (true cost per conversion we just calculated)]/ $246.67 = 0.88.
It may look like that’s a loss, but remember, they are not losing money (ROI could be a negative number).Tip
Now that you know what you’re really paying per conversion, you can identify areas to increase ROI.
For example, increasing the sales team’s conversion rate by a given percentage will decrease their cost per conversion by ‘x’ dollars.4. Determining Break-Even CPA for Forms
We were able to calculate the break-even points for ROAS, but what about in our recent example tied to form submission?
Continuing our conversation from above, you know you’re profitable and that you’re generating sales at a $246.67 CPA.
But how do you know the most you can spend on a form submission without losing money?
But what if you were generating conversions at $42? Would the account still be making money?
Granted, you can plug those numbers into formula #3 — but there’s a better way.What to Use to Calculate Break-Even CPA for Forms
Average profit per sale
Form conversion rateFormula to Use
Average profit per sale x Form conversion rateExample
As we saw above, our average profit per sale is $464 (after subtracting costs for commissions and the cost of booking the airfare).
We also know that 15% of forms close as a sale.
$464 profit x 0.15 close rate = $69.60
In plain English, you can pay up to $69.60 per form submission on average before you start losing money.Tip
Sometimes it’s important to test decreasing profit margins for the sake of increasing volume and acquiring more clients.
Instead of thinking of it as:
“We’re generating form submissions at $37 per form.
Think through this scenario:
“We’re generating form submissions at $37 per form.
At that rate, our ROI is 180%.
But, if we increase our bids, we could generate 20% more form submissions at $45 per form.
Our ROI would drop to 154% but it still gives us a nice cushion below our $69.60 CPA break-even point with higher volume.”5. Determining Break-Even CPA for Complex Sales Cycles
Not all businesses convert their visitors in one linear process.
Long sales cycles can mean multiple touchpoints with a lead or prospect before closing a deal and generating revenue.
For this formula, let’s draw out the scenario first and then figure out the correct formula.
Let’s say you work for a company that sells a monthly subscription to a cloud-based small business accounting software.
Their average customer generates $3,287 over the course of the average subscription length.
Your PPC campaign sends traffic to a landing page promoting a free webinar that explains the benefits and features of the software.
Webinar registrations are as far as your PPC conversion tracking goes!
This is where it’s crucial to know how your sales funnel generally performs.
45% of webinar registrants actually attend the free webinar.
Of those attendees, 15% ultimately sign up for a subscription to your client’s software.
Now you need to work backward on the math to figure out the most you should be paying for a webinar registration from your PPC campaigns.What You Need to Know to Determine Your Break-Even CPA
Average profit per sale
Webinar conversion rate (percentage of registrants that attend)
Sales conversion rate (percentage of attendees that buy a subscription)Formula to Use
(Webinar Conversion Rate x Sales Conversion Rate) x Average Profit Per Sale
The first step in the formula determines our true, or actual conversion rate.
Once we have our true conversion rate, we simply borrow our formula from step 4 and multiply our average profit by our true conversion rate.
Let’s work through the math in our scenario:
(45% of registrants attend x 15% convert to subscribers) x $3,287 lifetime value of a sale = $221.87
Put simply, your break-even CPA for a webinar registrant is $221.87.Tip
Explaining these calculations might feel a little overwhelming, but it can be easier if you walk through it with an example.
Here’s how you’d do it for a scenario where you generated 500 webinar attendees at a break-even CPA of $221.87:
We generated 500 webinar registrants at an average cost per registrant of $221.87. In total, we spent $110,935.
Of those 500 registrants, we expect 225 of them to actually attend the webinar, based on our historic average of 45%.
Of those 225 attendees, we expect approximately 34 (15%) of them to buy a software subscription.
We know that an average customer represents $3,287 in profit.
The above calculation can get more complicated if you don’t know the average lifetime value of a client.
We called it $3,287 just for the sake of this example, but sometimes it isn’t that straightforward.
Work to figure out these numbers so you’ll have a clearer sense of what’s going on, which will empower you to manage a more statistically accurate campaign.Conclusion
Knowing how to calculate these formulas by heart is great.
But being able to explain how they make sense with scenario-based, non-mathematical English is way more important
If the “why” of these formulas makes sense to you, you’ll be able to apply them in different situations no matter what types of accounts you manage now and in the future.
It takes you beyond being a PPC manager and operating as a true partner to the success of a business.
Screenshot taken by author, September 2023
In the not-so-distant past, PPC managers created multiple campaigns divided up by device to easily differentiate and customize messages to desktop and mobile users.
But does one size fit all?
For example, someone searching for an Italian restaurant on their desktop might be interested in the menu, so the ad should be written accordingly.
But the same search on a mobile device might be best served by an ad with messaging that includes the restaurant’s location and hours of operation.Take the Time to Customize Your Mobile PPC Ads
Doing so is incredibly beneficial.
How do you do it?
For example, a mobile ad might include mobile ordering, store locator, connect with customer service, apps/games, mobile appointments, etc.
Both Google Ads and Microsoft Advertising offer the ability to use a mobile URL, allowing you to land searchers on a webpage that is optimized for smaller devices and mobile functionality.1. Attention-Getting Headline
We always want an attention-getting headline. This is is the first line of the ad and the right place to draw the searcher in, and let them know you have a mobile-friendly offer, product, or service.
A few examples:
Find a location
Shop a sale near you
Stop in for a free quote
Call for friendly assistance
Though this won’t necessarily vary from the desktop headline, often you’ll want to keep the messaging short so that lines aren’t truncated on the small smartphone screen.
Also, the benefits for a mobile searcher might also be location-, distance-, or time-based. For example, “Less than Five Miles from You” or “We’re Open Now.”3. Call to Action
We want to revisit our mobile value proposition and combine that with some ideas in my other recent post on PPC calls-to-action.
Here are a few CTAs with a mobile twist:
Call today for same day appointment
Visit location near you
Listen to podcast now
Apply now from mobile
Stream from your phone
Download the mobile app
Get Quote4. Call Extensions
Use these when you want to give searchers the option of calling or visiting your website.5. Call-Only Ads
Messaging text should be short so that lines don’t get truncated on small mobile screens. The CTA should encourage the searcher to place a phone call (e.g. “speak to a friendly representative”).
Use these when you want to eliminate the option of the searcher going to your website.
These are especially useful for businesses where the engagement with a client necessarily begins with a phone call (e.g. attorney or accounting firms).6. Sitelinks
The purpose of sitelinks is to drive searchers to deeper content on the site. This is a fabulous opportunity to customize these specifically for mobile devices.
Examples of mobile-customized sitelinks:
Highlight your store locator
In-store deals near you
Hours and directions
Information session locations7. Promotion Extensions 8. Message Extensions 9. Location
As noted in every example, if you have a physical location you should make it easy for the mobile user to find that location.
Your ad messaging should assume the searcher is including in their search “find a location near me.”
If you have a Google My Business (GMB) page, your call-only ad will automatically include:
Street name and city.
A tap on the included location icon will bring up your GMB page with more information and a link to your website.10. Communicate Ease of Use
Contrary to intuition, mobile shopping doesn’t need to suffer from small screen size, and is becoming more and more prevalent.
Another way to improve shopper convenience is to utilize a sign-in mechanism that lets the customer begin a transaction on a mobile device and complete it on a desktop device.
This type of mechanism lets the shopper put items into their shopping cart on a mobile device, and then see their cart populated with the products once they sign into their account on a desktop computer.
Amazon shopping is a perfect example of this capability, as is Sephora.Summary
All screenshots taken by author, May 2023
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