Why PPC Can Work For You

Here’s some very fundamental things that you should know about PPC first…

• PPC pays for itself when it’s done right–and it can be done right.
• The goal of nearly all PPC campaigns is to produce a profit, not a loss.
• The amount you spend on PPC can be capped at any amount you want on a day by day basis–so it’s TOTALLY under you’re control.
• You can get a sense of how well it will a campaign will work in your niche before even trying to advertise, and if for some reason it’s not working you can stop it instantly.
• A good PPC campaign becomes more profitable over time as it’s optimized and improved.

My hope is that the points above should help set at least some part of you at ease.

What About the Warnings?

You’ll hear a lot of people warn you about PPC. I found that generally speaking these warning from people seems to fit into about 2 categories:

1. They tried it themselves and didn’t have an expert setup their campaign—so they set themselves up for failure—that’s because there are a lot of people out there that buy into the line that they can do PPC themselves, and I’m not going to tell you that. These people now warn everyone about PPC!
    
2. Or, a marketing company will tell you PPC doesn’t work and is risky because they want to sell you something else. Purely a sales tactic that plays on your fear.

Meanwhile there are millions of companies making a killing using AdWords because they are running their campaign correctly. Google made it’s fortune on AdWords, and it’s because marketers online are a savvy bunch, if some form of advertising isn’t working, they stop using it–they continue to use AdWords because it works!

AdWords is simply one of the most effective advertising mediums on line. Of course PPC may not be right for you’re business, but it’s fairly easy to discern this. See my blog post "4 Questions to Ask When Getting Started with PPC Advertising" for more details.

If you have any other concerns shoot me a quick comment below or email me and let me know what they are. Maybe we can chat about it.

Your products or services may be excellent candidates for pay-per-click. It depends however on your profit margin. If it’s large enough then PPC will work nicely, if it tends to be small and you tend to make money on volume instead then probably not. So, you’d have to decide how much you’re comfortable with each order placed through PPC costing you. For example, if you paid on average $70.00 in advertising for every one order you got through PPC would that still allow you a very reasonable profit. You’d then target your PPC campaign to spend $70 or less per order.The basic idea is that you need to make more than you spend.

How Do I Measure PPC Success?

The way you measure what people are buying is by putting some tracking code on the thank you page of your site’s order form or lead generation form. Google then tracks the conversions. So for example you may get 100 clicks to your site from your PPC ads, and each click costs you .70 cents. So, say that for every 100 clicks you get about 1 sale (which is tracked when someone orders). So 100 clicks cost you about $70.00. And so for that $70 you have net 1 sale in our example.

$70 dollars is just an example though. One of the company’s I manage a PPC campaign for has a $50 dollar limit, so we shoot to make it below that. That is the CPC or average "cost per conversion". And that’s a pretty realistic one.

What Should I Expect in the First Month of Doing PPC?

The first month of PPC advertising is usually a trial period to see how well things work. If it’s working it can work great. For example if your company services a major metro area and gets 50  to 100 leads a month, and then you may be perfectly happy spending $50 per lead. If you’re a national or international company then you could stand to get much more traffic because you have a much larger geographic area you can target.

For your PPC campaign you don’t have to target just one metro area but as many as you want. Then you can set whatever budget limit you want. For example you can limit to your budget to spending only $50 a day on ads, and you’d never go over that. However if those clicks are profitable and you’re recouping the money, then we can raise that limit and get more clicks. As long as you’re always recouping the money. If your business is seasonal that will be reflected in the amount of traffic from PPC too.

What’s a Good Starting Budget for PPC?

I don’t recommend you start with anything less than a $1,000.00 ad budget for a month because you need enough clicks to optimize the campaign and get it rolling. If you’re using a PPC management service like I provide then in the first month there is usually a setup fee which includes setting up the campaign with 100s of target keyword phrases, and creating ads to test. Each month there is also a management fee for the ad budget which includes the ongoing optimization of the campaign, testing, working at lowering your cost per click, and reporting.

So here’s a realistic example break down of minimum costs you might have with a $1000 a month budget:
Month 1: $1000 ad budget + $300 campaign setup + $300 campaign management (30%).
Month 2: $1000 ad budget + $300 campaign management (30%).
Month 3: $1000 ad budget + $300 campaign management (30%).
Month 4: $1000 ad budget + $300 campaign management (30%).
Etc…

When your PPC campaign is profitable you’ll probably raise your budget to meet demand and make more money.

If you’re new to PPC I hope this information helps you make a smarter decision about using PPC. Feel free to leave your comments below or contact me with questions.