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3 Crucial Calculations You Need to Make Before Starting a PPC Campaign

By Abby February 14, 2020

Think of all those times you’ve searched Google for the “best fast food chains near me,” “business casual clothing in Minneapolis,” or something else to that effect. Now think of all the times you ended up clicking on an ad in the search results, perhaps by accident, that took you directly to the website for a relevant fast food chain, clothing store, or what have you. That right there was pay-per-click advertising in action!

As a quick refresher, pay-per-click (PPC) advertising helps a company increase traffic to their site by purchasing ads on both websites and search engines. These are ads that show up in response to specific keywords (or combinations of keywords). When you click on one of these ads, you will be taken to that business’ webpage, and the company or advertiser pays a dollar amount for those clicks.

Making the Most of Your PPC Potential

Because of their high visibility, PPC ads are an extremely effective way to boost traffic and sales for your brand, while making it easy to gauge ad performance and ROI. 

However, these campaigns aren’t a one-stop-shop for your brand’s success—there are a number of factors you’ll need to consider before taking a stab at pay-per-click. Take a look at some of our top PPC-related suggestions below, to ensure you’re on the right track for a successful campaign.

1. Customer Lifetime Value

In marketing, customer lifetime value is, essentially, the monetary value of your relationship with a customer—for the entire length of time that they are patrons of your brand. Lifetime value is a popular stat amongst companies that want to shift the focus from quarterly profits to building long-term relationships with their buyers.

How does this factor into your PPC campaign, you ask? For one thing, keywords initially used by customers that result in their clicking on a PPC ad may give you an indication of what kind of customer they are likely to become (i.e., short-term or long-term). You might also consider comparing PPC to other sources of traffic, which will help you to determine which words, or which ads, are bringing in customers with the highest lifetime value.

2. Target CPA

You may already be familiar with the Google Ads Smart Bidding strategy known as Target CPA, which sets bids with the goal of getting you as many conversions as possible, at or below the cost per acquisition (CPA) you have set. Advanced machine learning automatically optimizes bids, tailoring them for every auction. In layman’s terms, a target CPA is the average amount you would like to pay for each conversion—i.e., each successful click.

To avoid over or underspending, it’s crucial that you calculate your target CPA before you embark on your PPC campaign. For instance, if you set a goal that is too low, you may lose clicks that could have resulted in conversions. Keep in mind that you’ll want to prioritize conversions by the device that is being used; a desktop computer, for example, will yield different results than a mobile search engine will.

3. Bidding Price on Keywords

Pay-per-click keyword prices aren’t chosen at random, though sometimes it may feel that way! They’re actually determined by a number of variables, such as keyword competition (the measure of how difficult it will be to rank for a particular keyword), your bidding strategy, and plenty of other factors.

It should come as no surprise that a key variable in determining your cost per click is how much you actually decide to bid for those coveted keywords. Low bids equal low prices on keywords—it’s as simple as that. High bids increase the likelihood of high keyword prices, but remember that this is not necessarily always the case.

It also pays to keep in mind that keyword pricing can be influenced by factors such as seasonality—so plan accordingly when making bids for the ad spots you want.

Maximize Your PPC Capabilities With Snap

You don’t want to waste your marketing budget on guessing games and questionable PPC tactics. Whether you’re a seasoned digital marketer or new to the PPC game, the paid search experts at Snap are ready to assist. We offer only the best in data-driven pay-per-click techniques, and we’ll work to optimize your existing campaign or create effective ads from scratch. What are you waiting for? Contact us today to get started!