Mention Pay Per Click or Google Ads and quite often you see the change in people’s faces, as those that have used it before will usually tell you how much money it cost and those that have never used it will have listened to those that have and their stories … about how much money it costs.

Whilst I have no doubt that for some businesses, the Pay Per Click model just never worked, I can assure you that in most cases it was nothing to do with the platform, normally Google Ads or Bing Ads, but usually down to how the campaign was set up, the landing page or website the user was being sent to, or in some cases, refusing to PPC per click price that the company needs to pay in order to get the right customers.

And this is where this blog starts to make a point and indeed, starts to focus on why instead of looking at how much you pay per click, you need to be focusing on the return on investment from successfully converting these clicks, as this is the important aspect.

The price you pay per click, or the CPC, is determined by many factors, including how good your adverts are, the quality scoring on your campaign, the quality score on your account and the keywords you are bidding on, but more often than not the bottom line is how much your competitors are willing to pay, as let’s not forget, you are working with an auction based model, where if Company A is willing to pay £5 per click, you are not going to get very close without looking at the same level, no matter how good your campaign is.

Have you ever wondered what the most expensive keywords on Google Ads actually were and what they equated to? Well, thanks to WordStream.com, we have some kind of answer:

  1. Insurance
  2. Loans
  3. Mortgage
  4. Attorney
  5. Credit
  6. Lawyer
  7. Donate
  8. Degree
  9. Hosting
  10. Claim

The average cost per click for mortgage related terms in the industry can be around £30, which seems like a lot? Well, let’s put this into context. A mortgage company might spend £1000 a day on Google Ads to secure leads. If the mortgage company then earns a % of the mortgage figure base plus a load of commission on the various insurances and bits and bobs they also sell, you can quickly see they do not need many conversions to cover their spend. So whilst the figure looks high, in reality to what they are selling, it is not, especially when you take into account the fierce competition that is out there doing the same thing.

But, if the mortgage company looked at the £30 per click and refused to pay it, rather than focusing on making sure they get the most conversions and therefore this money started to actually look like a solid ROI opportunity, then they will be missing out big time on one of the most effective lead generation tools that we work with in the online marketing world.

And this, put simply, is the point of this blog.

Too many businesses look at the cost per click price and immediately work out it is not for them. But, if they concentrated on conversion optimisation rather than top line CPC, then for most, the price they pay should be, on average, more than cost effective when it comes to the return it provides. For some businesses it might never work, and I understand that, but for the majority of online businesses by focusing on CPC rather than the potential ROI from solid conversions they are simply missing out on immediate leads, and this is where the problem lies.

In the SEO industry to be top of the search terms for:

SEO Company
SEO Companies

This is going to cost around £20.

So, once you have fallen off the chair in disbelief, let’s put this into context.

Say an SEO company charges £500 a month as a minimum campaign. So, they invest £200 a day in Google Ads, which equates to £6000 a month. They do this for three months and spend £18,000, this looks like, and indeed is, a lot of money. But, say they landed one customer every day from the £200 they spent, on a minimum of £500 a month. So, 30 x 500 = £15,000, those customers stay with them for a minimum of three months, this figure is now £45,000, some will stay longer, but that is enough figures for now. So quite quickly, that £18,000 spend, as long as they convert enough customers starts to look a smart investment, especially in industries where the customer stays and pays monthly for an ongoing business.

But, from the outset if someone said to your business you had to spend hundreds a day, you would boot the company out the room, never giving it a second thought.

And this is why concentrating on Cost Per Click is not how to decide whether PPC is right for you, but conversions and ROI most definitely are.

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