10th November 2014
Deciding Your PPC Targets
Before you start PPC advertising (or any advertising for that matter) you should consider what your goals are.
How much are you willing to spend and what do you want to achieve?
We frequently have clients who reply to that question with “we want to see as many conversions as possible” or “I want to be top of the search results”.
Whilst these may seem like good answers, they are rarely the best way to judge the success of a PPC account.
Before you decide on targets you’re going to need to work out what you consider a conversion to be. If you are a retailer that question is fairly obvious - you’re going to count sales. If you are not a retailer you may be counting email contacts, newsletter sign ups etc.
Once you know your conversion point, you can begin to think about what success looks like.
Your PPC campaigns achieving the highest number of conversions possible isn’t necessarily the best goal. You could be receiving lots of sales but still spending more on clicks than you are making. Receiving 100s of sales a day on low value items may have no benefit to you at all, it may be better to receive one sale on a large ticket item for example.
To get round this I would suggest working out a target cost of advertising (COA). Here’s how you find your cost of advertising:
Cost of Advertising (COA) = your cost of advertising / sales value
Deciding on a COA target gives you a good goal to work to and you can ensure that your PPC activity is profitable. For example, if you decide that you are profitable at a 20% COA you will be trying to make £100 for every £20 you spend. Sounds good, right?
Instead of just controlling how much you spend and ensuring you stick to a budget you will now know if you are making money and whether it is worth spending more money on PPC advertising. You can also tell which campaigns and ad groups are working and where you are seeing a good return.
For those of you who are not retailers it may be worth working out what the value of a conversion is to you. If you can attribute a value then you can work out a COA. If this is not suitable for you, you could consider working to a cost-per-conversion (CPC) or cost-per-lead (CPL)
Cost per conversion (CPC) = cost / conversions
How much are you willing to pay for a conversion? If you know this you can also work out which campaigns and ad groups are working well in your account and optimise accordingly.
Knowing your targets before starting a campaign ensure that your PPC campaigns work better and helps when making optimisation decisions.