Can You Afford to Advertise? Breaking Down the Cost of PPC

You’ve read or been told that you should be running PPC for your business, but you’re not sure it’s in the budget. Sounds like we’ve got another marketing mystery on our hands! While it’s true that we marketers love our acronyms, here at The DofM we’re not so big on mystery. So we’re breaking down the basics of PPC – or Pay-Per-Click – advertising as well as what goes into pricing so you’re prepared to have a conversation about whether it’s right for you and your business. 

What is PPC? 

PPC stands for pay-per-click, a model of online advertising where you pay Google, Facebook, Instagram, or any other online marketing platform a fee each time your digital ad is clicked. Essentially, you’re paying to get your website, offer, lead magnet, etc., in front of your audience, rather than doing the heavy lifting of SEO to get it to rank organically. And as much as it pains us to say it, with all the competition for attention online these days, sometimes you have to pay to play.

Not sure how PPC fits into your overall strategy? We made you this handy-dandy, down and dirty guide to content marketing

But a winning PPC strategy requires a lot more than just paying for clicks. You need to research the right keywords, organize them into campaigns and ad groups, and even develop optimized landing pages and funnels to turn your leads into paying customers. We could go on for days about the strategy behind each step of the process but today, we’re talking green – as in, how much do you need to spend to be successful? 

How Much Does PPC Cost?

Unfortunately, there is no easy, one-size-fits-all answer to this question. The average cost per click for Google Ads is $1 to $2 per click, however, the cost per click for your ad will depend on a number of factors like ad rank, competition, and even by product or service that will impact your overall cost. For perspective, the most competitive (and therefore, expensive) keywords to advertise around on Google are related to insurance. If you’re in this category, you could be looking at as much as $50 per click! 

Ad Rank

Much like Google ranks web pages based on relevance and quality, it also ranks your ads to determine how much to charge for PPC and how often to show you ads. Your ad rank is calculated using the maximum bid or price you set on a certain set of keywords and the quality score of your ads. For more of a breakdown on the Google Auction and Ad Rank, check out this article

Industry & Geographic Location  

The amount you will need to spend monthly on a PPC campaign relies heavily on the amount of competition in your space. The higher the competition for certain keywords and key phrases, the more expensive they become. The key here is understanding the 3 most important metrics in any paid campaign: 

  • CPC or Cost Per Click: What Google charges per click on your ad.
  • CR or Conversion Rate: The average number of visitors who click your ad and then convert. This is the percentage of people who take the desired action as a result of your ad – whether that is downloading a free resource, requesting a demo, setting up a call, or buying a product. By understanding your CR, you can also calculate your cost per conversion – or how much you must spend to convert one visitor through your ad campaign. 
  • ROI or Return on Investment: This is probably an obvious one, but it’s the most important when determining the success of your ad campaigns. Did you make more revenue as a result of the campaign than you spent on ads? If so, you’re in good shape.

Product or Service

Even if the competition for your business is low, you must still consider the buyer’s journey of your target audience. For bigger ticket items or service contracts, it will take your customers much longer – and likely a few more touches (i.e. more ads) – to make a decision. Where selling one product may only take one or two touches, selling another may involve multiple visits to your website, several content downloads, participation in a webinar or live event, and more to seal the deal. 

How Can You Manage Your Budget?

With so many unknowns it might seem easier to throw up your hands and say “f#%! it.” But if you’ve been in our orbit long enough you know PPC advertising is important enough to stick it out. The good news is that the Google Ads platform does provide tools to help keep you on budget as you start to test the waters. 

With their campaign estimator, you can enter your monthly budget cap and Google will tell you how many clicks you can expect from your ad campaign. You can also adjust your budget – and even turn off your ads – at any time (although we do recommend leaving an ad run for at least a month to get reliable insights into the success or failure of the campaign.) 

Running ads that aren’t quite working for you? Here are a few reasons why your campaign isn’t PPC working. Not quite ready to tackle a PPC campaign by yourself? Working with an expert can save you bundles in wasted time and ad spend. And we happen to know someone who can help, just click or call to get started

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