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PPC Agency Blog

This Mini-Guide Will Help You Build Better PPC Campaigns for Your Law Firm
PPC Case Study: Tampa, Florida Apartment Complex
How Successful Fashion and Apparel Brands Win With PPC
The E-Commerce & Retail Guide to Running Profitable Paid Ads
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Google Ads vs. Facebook Ads: Which is the Better Advertising Medium for Your Business?
Negative Keywords: The How & Why of Negative Keywords List Building in Google Ads
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Chiropractor PPC: Google Ads Guide for Chiropractors
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PPC Marketing Management for Law Firms: A Comprehensive Guide
Broad Match: Best Practices for Targeting Broad Match Keywords in PPC
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8 Tools for Analyzing Your Competitors in PPC
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How To Calculate The ROI For PPC & Improve It
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Samuel Edwards
|
December 6, 2024
The Eventual Deprecation of Third Party Cookies

When you visit a website for the first time, you usually see a message like this:

“This website uses cookies on your computer to collect information about…”,

followed by a paragraph of jargony explanatory text and a link to a privacy policy. At the end, you’ll have the option of accepting or rejecting cookies.

To the average user, cookies are an inconsequential annoyance – some dumb little thing they have to click whenever visiting a new website.

But for marketers and advertisers, cookies are a very important source of information. Now, the potential death of third party cookies has caused some ripples in the industry.

So why are third party cookies on the chopping block? And what can you do as a marketer to prepare for this massive sea change?

What Is a Cookie?

What Is a Cookie?

In case you’re uninitiated, let’s go over the fundamentals. What exactly is a cookie?

Yes, we’ve all heard the jokes about the popular dessert, so don’t bother. In the context of digital interactions, a cookie is a type of data file that stores a tiny amount of information about a user. Collectively, cookies can tell you much about how a user interacts with a website – and sometimes, information about the users themselves.

Third party cookies are only one of three main types of cookie.

We have:

  • First party cookies. First party cookies are cookies that are under the ownership of their domain you’re currently visiting. In other words, these are server-side cookies stored and managed by the website you’re on. For example, when you head to your favorite online shoe store to get a new pair of running shoes, it might store some information about the product pages you’ve visited so it can recommend better running shoes to you in the future.
  • Second party cookies. Second party cookies are essentially first party cookies that are shared with other partners. As an example, the domain you’re visiting may share their cookies with the company that owns and operates the web browser you’re using.
  • Third party cookies. So, what about third party cookies? These are client-side cookies that are stored in your browser and are owned and maintained by a website different from the one you’re currently browsing. They collect and store information about your browsing history and online interactions so the information can be sent to and used by other companies (usually marketers and advertisers – so you can see where this is going). When you visit that shoe store and start looking for running shoes, these third party cookies can inform Google and other advertisers about your browsing patterns so that you can receive advertisements across the web in line with your interests.

As PPC advertising experts, we usually consider cookies in the context of collecting user information we can then use for marketing purposes – but there are many other applications for cookies. For example, cookies are responsible for allowing you to use financial apps like PayPal on external sites. Cookies can also be used by cybercriminals and opportunists looking to exploit you or steal your identity – though these tend to be rare.

Are Third Party Cookies Coming to an End?

We’ve established that third party cookies are important for gathering information on users, which can then be used to optimize powerful marketing and advertising campaigns. We’ve also alluded to the deprecation, or death, of third party cookies.

Why are we predicting this?

We can already see some signs of a collective shift in how we view online privacy and tracking user activity. Web browsers like Mozilla’s Firefox and Apple’s Safari already block third-party cookies by default; if users like the idea of sharing their data with advertisers, they can enable them (though this isn’t a frequent choice).

Google Chrome, as of the time of this article’s writing, still enables third-party cookies by default, but this is set to change later in 2023. And with this change will come another important feature, or rather, a missing feature: users will not be able to turn on third-party cookies. Once third-party cookies disappear from Google Chrome, they’re never coming back – and it’s likely that all the other little web browsers will follow suit. Instead, Google is introducing Google's Privacy Sandbox initiative, a new framework designed to balance personalized advertising with stronger first-party data protections.

That’s on top of increasing online privacy concerns putting pressure on cookie-related strategies. Consumers are increasingly concerned about processing personal data, regulatory organizations and governments around the world are introducing new data regulations, and brands all over the world are exercising more prudence and caution when collecting or using user data. The Privacy Sandbox is expected to play a major role in shaping the future of digital marketing, offering alternative ways to deliver relevant ads while limiting invasive tracking.

The Deprecation of Third Party Cookies: How Does This Affect Marketing?

Cookie Matching

What does this mean for marketers?

Before we can fully answer that question, we need to talk about cookie matching. According to Google, “Cookie Matching is a feature that enables you to match your cookie—for example, an ID for a user that browsed your website—with a corresponding bidder-specific Google User ID, and construct user lists that can help you make more effective bidding choices.”

By some estimates, third party cookies match rates account for roughly 40 to 60 percent of the total user profile – meaning about half your user data depends on third party cookies. If users are actively blocking third party cookies, or if you don’t have any third party cookie data to draw from, you’re going to end up with half the user data you’d have otherwise.

This can have cascading consequences, ultimately costing you more money and reducing the potential effectiveness of your marketing and advertising campaign. If you can’t target users accurately, your click and conversion rates will go down. You’ll have a harder time finding the right people to target. And according to some experts, this could end up driving up the average cost of advertising.

On top of that, your data analytics will no longer be reliable. You’ll find it much harder to accurately measure the results of your campaign – and you might end up forming misleading conclusions that make you optimize your campaign in the wrong direction.

Disabled Third Party Cookies

Keep in mind that this shift is already unfolding. As of late 2022, 26 percent of people around the world have third party cookies disabled in their browser of choice.

What You Can Do Now

So, what can you do to prepare for this major shift in user data and advertising?

  • Anticipate disruption. The world of PPC advertising is never going to be the same. Yes, first party cookies can tell you a lot about users who visit your site, but advertisers are going to be forced to work with much more limited streams of data when planning campaigns due to third-party cookie deprecation. That’s just the beginning; this could be the first domino in a sequence of major changes for the online advertising industry as a whole. You need to be prepared for this ongoing disruption if you’re going to thrive.
  • Double down on first party tracking. Third party cookies will be functionally dead by the end of the year. Second party cookies are immaterial to your advertising strategy. So that essentially leaves first party cookies as your only reliable way of gathering user data with cookies. if you want to make the most of this, it’s important to set up first party tracking cookies on all your domains – and collect as much data as possible on your user base.
  • Set up integrations with your ad platforms. Gartner uses the analogy of a “walled garden world” to describe a world of PPC advertising that can’t rely on third party cookies. Organizations and domains are going to be artificially segmented, unable to share data broadly or reliably in the ways they could before. Setting up ad integrations with your favorite ad platforms can make it easier for you to utilize your first party cookies for advertising purposes. Additionally, be mindful of data subject access requests, as users now have greater control over how their web browsing data is collected and used. Get ahead of the curve and try to set that up now.

Adapt or Die

If there’s one important take away from all of this, it’s that the worlds of PPC advertising, consumer data collection, and even online privacy are going to change forever by the end of the year – and the transition has already begun. As is the case with all major marketing and advertising transitions, the companies that are capable of adapting and evolving are the ones that are going to thrive.

You only have two options, since you’re not going to convince Google Chrome to give third party cookies another shot. You can either adapt or you can suffer the consequences of remaining stagnant. It’s hard to say exactly what the short-term or long-term effects of missing third party cookies will be, but we can be confident that we’re in store for the biggest PPC ad disruption we’ve seen in years.

Whatever your goals and motivations are, it’s on you to take a close, analytical look at your PPC advertising strategy, increase your focus on first party tracking, and allow your advertising approach to evolve.

All this is much easier when you have the help of a competent, experienced PPC advertising agency (like ours!). If you’re ready for a free proposal, or if you’d like some more information before getting started – contact us today!

Samuel Edwards
|
December 6, 2024
A/B Testing for PPC Lead Generation Success

When your goal is a long-term, successful PPC campaign that brings you a steady stream of qualified leads, you need to run A/B continuously.

Also known as split testing in digital marketing, this is the only reliable way to determine which variables contribute to higher conversions and profits.

Once you pinpoint the profitable ad variations, you can implement them across all of your campaigns for the best results.

A/B testing overview

AB Testing

In general, the idea is to run two or more simultaneous Google Ads campaigns that differ in small ways, both in your ad and your landing pages. You start with a main campaign as your control, and then create additional ads and landing pages with slight differences to see how well they perform against each other.

After a period of time, you’ll know which ads and landing pages perform the best. From there, you can analyze which variables are present on your high-performing ads and pages, apply them to all of your campaigns, and then start testing other elements to get even better results.

For example, you might run five campaigns with the same ad, but users are redirected to five different landing pages, each with a unique heading. Or, your landing pages might have a different format, colors, or typography. You can test any element, no matter how small, and sometimes it’s the small things that count most.

If you’re curious about split testing your PPC ads, this article will help you understand how this process works and how to apply it in your campaigns.

What elements can I plit test?

You can run an A/B test for just about any element you can alter in your Google Ads campaign. For example, it’s common for people to test the following:

  • Ad images on the PPC platform
  • Ad headlines
  • Ad demographics/target market
  • Calls-to-action (CTA) on landing pages and ads
  • Landing page headlines and copy
  • Landing page layout (the placement of key elements)
  • Landing page design (visual elements, like button colors and sizes, typography, images, etc.)
  • The inclusion or omission of a main menu
  • The inclusion or omission of testimonials
  • Anything else that has the potential to impact a lead’s decision to engage/convert

How do split tests work?

How do split tests work?

There are two main elements that power A/B testing: time and structure. Let’s look at each of these in-depth.

Structuring a successful A/B test

Running digital marketing A/B tests is easy, but you need to set it up to extract actionable insights, and that’s where things can get a little challenging. If you follow these tips, you’ll have an easier time.

1. Maintain your control

Your control campaign is the original, unaltered version. Always keep your control running alongside additional campaigns with changes. After your tests, when you find your highest performing campaign, that should become your new control to replace the old. From there, you’ll aim to beat your control once more by testing new elements.

Repeat this process indefinitely, and always remember to maintain your control so you can see what elements are performing better against your existing standard.

2. Test one element at a time

The first thing to remember is not to attempt to test too many variables at once. Testing multiple things at once will make it hard to know which change is responsible for an increase or decrease in conversions. Stick to testing a single variable until you’re satisfied with those results and then start testing the next element.

3. Give your PPC split tests enough time

10,000 experiments rule

When running a test, you’ll need ample time to generate enough traffic, clicks, and sales to see what’s working between each version being tested. You won’t get results overnight or even in a week. Your A/B tests need to run long enough to create statistical significance in the results.

The suggested time period is however long it takes to reach 10,000 sessions, also known as the “10,000 experiments rule.” This is an alternative version of the concept that it takes 10,000 hours to become proficient in a given skill. The idea behind this is that deliberate experimentation is more valuable than deliberate practice. It’s true – if you don’t experiment deliberately, you won’t get the data you need to see what’s working in your PPC campaigns. However, 10,000 experiments (or 10,000 interactions) can seem like a bit much for smaller businesses.

Reaching this goal could take months for many organizations that don’t have a massive PPC budget. However, if this applies to you, set a goal to reach 1,000 sessions or put a cap on your tests at the 60-day mark. Either way, just wait until you have a decent amount of data to work with even if you don’t reach that 10,000 mark.

4. Know your goals

Running split tests without specified goals isn’t going to help you. It’s crucial to know exactly what you want to get out of your tests. For example, everyone wants more leads, but what does that look like beyond the surface? Would you feel like you achieved your goal if you got 500 new leads that never make a purchase? Or do you only consider it a success if you generate targeted leads that at least have the potential to buy in the future?

Getting targeted leads is just one example of a specific goal. You may want leads who will sign up for your email list and then watch a video or follow you on Instagram. For long-term success, you’ll want to align your A/B tests with your goals, otherwise you could spend years testing the wrong elements – the ones that don’t directly influence the actions you’re trying to elicit.

Implement specific success/fail measures

To get actionable insight from your tests, you’ll want to identify the metrics that denote success or failure other than just the number of leads you collect. These might include:

  • Conversion rate
  • Average purchase amount
  • Time spent on the site
  • ROI

Tips for evaluating your A/B tests

To make improvements, you have to know how your experiments are performing.

1. Use visual analytics

Figuring out if your tests are successful requires some serious data analytics. You’ll need to analyze a handful of key metrics to see how people are reacting to the changes you’ve made, and you can accomplish this with a visual form of behavioral analytics. According to Investopedia, behavioral analytics can support a number of different hypotheses at once and makes it easier to evaluate your experiments.

When you have a visual data report of your tests, it’s easier to understand which elements are supporting your goals and if a certain version of your ad copy is good enough to apply to all of your PPC campaigns and/or become your new control. Additionally, tracking key performance indicators will help determine whether your adjustments are driving meaningful engagement and conversions.

2. Implement session recordings

Also called session replays, this is where a user’s actions are recorded as they interact with your website. Mouse movements, clicks and taps, and scrolling are the most common actions recorded.

Implementing session recordings into your split tests can help you improve your PPC ad campaigns immensely. Not only will you have data, but you’ll have a real-time account of how users interacted with your page, which will give you some specifics you can’t get any other way. For instance, a user might start to fill out a contact form and then stop at a certain question. Or, they might abandon the checkout process at a certain stage and their mouse clicks might tell you why.

Session replays are an excellent way to improve your conversion rate, and when paired with A/B testing, they’re even more powerful.

3. Use heatmaps

Use heatmaps

Heatmaps can provide you with valuable insight into which parts of your web pages are performing well (or not). These maps will show you where your visitors are focusing most of their attention, where they’re clicking, if and how long they’re scrolling, and what might be distracting them from taking the desired action.

For example, a scrolling heatmap can tell you if users even saw your CTA. Perhaps many don’t scroll down far enough, and you’ll need to move the CTA higher up on the page. If you don’t use a heatmap, you won’t know that many of your visitors never even saw your CTA. All you’ll know is that you didn’t get clicks. This could lead in circles, causing you to test different CTAs, when your original one might be just fine when made more visible.

4. Track traffic sources in your Google Ads account

Sometimes, it’s your traffic source that supports a more successful Google Ads PPC campaign. Make sure you’re tracking where your visitors come from so you can determine which traffic sources lead to higher conversion rates. You might find some sources to be complete duds, and that means you’re either targeting the wrong audience within that PPC platform or the platform itself isn’t where your market spends time.

Many businesses run PPC ads on every platform they can find, like Instagram, Facebook, Twitter, LinkedIn, and Google Ads. However, some markets rarely (or never) spend time on certain platforms. For example, if you’re trying to reach a highly technical and scientific-minded market, you probably won’t reach many people on Instagram. Sure, there are plenty of science-related accounts, but they’re not usually scholarly. It just doesn’t attract that type of market. Instagram is more for entertainment and visual appeal than sharing scientific research, discoveries, and theories.

If you discover that some of your traffic sources aren’t producing conversions, reconsider if you’re on the right platform. If you think you are, then start adjusting your target audience. If that doesn’t generate more leads, consider abandoning the platform because it’s not worth wasting ad spend where you aren’t getting results.

Key PPC lead generation takeaways

A/B testing is a crucial component in your Google Ads PPC lead generating campaign. The key is to define your paid search goals before setting up your experiments, and only test one change at a time.

Be willing to wait for statistically significant results so that you can know for sure that you’re making the right changes. Keep your control clean and consistent but replace it when you find a new ad or landing page that consistently achieves a higher conversion rate.

Last, don’t stop split testing when you get your first taste of success because there’s always room for improvement and you can always do better. You’ll need to adjust your goals and hypotheses over time, but that’s just part of the process. Split testing should be a continuous endeavor and if you get stuck, you can always reach out to a professional PPC marketing company.

Samuel Edwards
|
December 6, 2024
12 Must Have PPC Certifications

Getting big results from your PPC ads requires more marketing knowledge than the average person. Anyone can run ads and get clicks, but few achieve an exceptional conversion rate of >12%.

How do you rise above the average conversion rate of 2.35%? You need higher knowledge and a stronger strategy. However, you need to learn the ins and outs of each ad platform to supplement your general PPC knowledge.

Whether you’re running PPC ads for your own businesses or for clients, building your skill set for specific platforms will greatly improve your results. Even though all paid ads generally work the same way, each marketing channel is slightly different in terms of strategy, how you target your audience, and the market you can reach. For optimal results, you need to know where platforms share similarities, how they differ, and how to leverage each one.

Certifications will also prove your expertise to clients, look great in your portfolio, and will help you build confidence in your online advertising abilities.

If you’re new to PPC ads, you’re not hitting a conversion rate of at least 10%, or you need tangible evidence of your expertise, consider obtaining the following PPC certifications.

1. Google Ads Certification

Google Ads Certification

Overview:

Most businesses that run paid ads rely on Google Ads certifications specifically for the majority of their leads. Google is the top search engine and has about 92% of the entire search market, which makes advertising on this platform essential.

Google’s 8 PPC certifications

Here’s an overview of the 8 PPC certifications you can get from Google, all of which are at the beginner level and include a series of assessments to prepare you for the exam.

Google Ads – Measurement Certification

This course takes about 4.7 hours to complete and will train you to “measure and optimizing Google search campaigns performance.” You’ll learn how to translate marketing objectives into measurable actions and derive actionable insights from data.

Google Ads Creative Certification

This course can be completed in around 3.9 hours and will teach you how to use Google’s tools to create “effective ads for Video, Display, App, and Search campaigns.” You’ll also learn how to boost performance by experimenting with ads.

Grow Offline Sales Certification

After 2.6 hours of study, this course will teach you how to “connect products and services with shoppers across their purchase journey.” Running an offline sales strategy is just as important as your PPC ads, and you’ll learn all about how they are connected.

Google Ads Search Certification

With an average completion time of 3.7 hours, this course will help you master “building and optimizing Google Ads Search campaigns.” This is one of the most important courses, and you’ll learn to boost performance with automated processes like Bidding and Audience Solutions.

Google Ads Display Certification

This course can be completed in around 2.6 hours and will teach you to “deliver effective display advertising to meet specific marketing objectives.” Using Display Audiences, you’ll learn how to reach more customers and align your Display Ads marketing plan with your budget.

Shopping Ads Certification

This course takes about 3.1 hours to complete and you’ll learn how to “connect products and services with shoppers across their purchase journey.” Although the objective is similar to the Grow Offline Sales Certification, this course specifically pertains to Google’s Shopping ads.

Google Ads Video Certification

With around 4 hours of study, you’ll learn how to “get results from YouTube and Google Video advertising solutions.” These two platforms are essential for paid ads, especially when you’re working with clients. YouTube Ads are an essential component of any PPC campaign. Running ads on videos requires a slightly different approach, and this course will teach you how to navigate this aspect of PPC advertising.

Google Ads Apps Certification

This is one of Google’s shorter PPC certification courses and takes around 2.8 hours to complete. This course will teach you to “create and optimize App campaigns to meet specific marketing objectives.” You’ll learn advanced strategies to elevate your App campaign performance and increase app quality an discoverability.

Features and benefits:

When you take the above courses, you’ll get video lessons, a knowledge assessment, and preparation assessments to help you pass. The exams generally take just over an hour to complete, and it’s recommended to get certified in every area to get the best results in PPC advertising.

Pricing:

All of these certifications are free, and you only need a Google account to get started.

2. SEMrush PPC Fundamentals

SEMrush PPC Fundamentals

Overview:

You can never go wrong with Semrush. Considered a leader in digital marketing, Semrush offers high-quality, valuable resources to digital marketers, and the PPC Fundamentals certification is no exception.

If you’re just getting started with PPC and are a complete beginner, you want to start with this certification. You’ll be asked 35 multiple choice questions spanning a total of eight topics:

  • Bidding and Budgeting
  • Display Ads
  • Multi-Touch Conversions
  • PPC Overview
  • Search Advertising
  • Shopping Campaigns
  • Strategy
  • Universal App Campaigns

To pass this exam, take the free PPC Fundamentals Course offered by Semrush Academy.

Features and benefits:

This is a basic exam, but it’s essential for beginners as it makes complicated and advanced concepts easier to learn.

Pricing:

You can take the training and get certified for free with a Semrush account.

3. Microsoft Advertising Certified Professional

Microsoft Advertising Certified Professional

Overview:

The Microsoft Ad network displays PPC ads across several channels, including Bing search, Yahoo, and AOL. Next to Google, this is one certification you don’t want to skip if you’re serious about your paid Google Ads campaigns.

As a Microsoft Advertising Certified Professional, you’ll learn how to manage, set up, and optimize PPC campaigns across the Microsoft Ad network. To prepare for this exam, you’ll use a free 232-page study guide that covers an extensive amount of information that will be on the exam.

Features and benefits:

When you access the study guide, you’ll learn about Microsoft advertising policies and how the platform works. Once you pass the exam, you’ll get a certificate to print and your name will be added to Microsoft’s member directory.

Pricing:

Like Google, Microsoft offers this course and exam free of charge; you only need a Microsoft account to get certified.

4. Facebook Certified Digital Marketing Associate

Facebook Certified Digital Marketing Associate

Overview:

PPC advertising on social media is huge, and most businesses use Facebook Ads because that’s where people spend a majority of their time. If you want to promote your business on Facebook, you need to learn how to use their online advertising platform.

This certification course will teach you how to create and manage ads, establish your presence on Facebook, and read reports. This is important because Facebook offers some of the most nuanced and detailed audience targeting options. You can even target your competitors’ audiences.

Features and benefits:

There aren’t many courses or certifications specific to social media advertising, so this is a valuable certification that you can apply to other social channels. To start learning, access Meta Blueprint and select your certifications from there.

Pricing:

This certification is free, and you only need a Facebook account to get started.

5. Directive Institute PPC Certification

Directive Institute PPC Certification

Overview:

This is a 10-hour certification course that covers 13 different aspects of PPC marketing. You’ll learn how to build, manage, and optimize PPC campaigns on any platform.

Features and benefits:

Compared to other courses that focus more on the details, this takes a more general approach that will help you get started right away. In addition to video tutorials and text lessons, you’ll get access to templates to build ads and landing pages so you can start your first PPC campaign quickly.

Pricing:

Currently, it costs a one-time fee of $99 to access all of the Direct institute courses and certifications. This includes PPC, CRO, SEO, Data Analytics, and Optimization.

Tips for passing PPC advertising certification exams

Like any exam, you’ll need to study hard to pass your PPC certifications on the first try. Even though most exams are free, that doesn’t mean they’re easy. Here are some tips to prepare yourself to achieve a passing score.

Refresh with the basics

Never underestimate the importance of knowing PPC basics like the back of your hand. Most course certifications place a strong emphasis on fundamentals, so make sure you don’t skip the basics. If you’ve been doing PPC ads for a while, brush up on your general knowledge to make sure you haven’t forgotten any important details.

Get a study partner

Sometimes it helps to have a study partner you can talk to and go over points within real time. Text and video materials are helpful, but nothing beats discussing your points of confusion with someone else who might be able to rephrase things for you. You can also make up your own quizzes and run some paid search advertising campaign experiments together.

Don’t wait too long to take the exam

Most people make the mistake of waiting too long to take exams because they never feel ready. The truth is, you’re probably more ready than you think. It’s important to pace yourself and not rush into taking an exam, but if you’ve done a fair amount of studying, don’t wait until you feel like you’ll get a perfect score. The goal is not to get 100% on every exam. The goal is to pass and then use the feedback from the questions you missed to round out your knowledge and study more.

If you wait too long to take the exam, you’ll forget some of the things you’ve learned. However, if you take it before you’re truly ready, you either won’t pass or your knowledge won’t be retained afterward.

Get experience as soon as possible

Last but not least, start acting on what you’ve learned as soon as possible. PPC digital advertising knowledge is important, but nothing solidifies concepts like applying them in the real world. If you want to leverage PPC marketing to get big results, you need to apply what you’ve learned to see how it all works.

Don’t be afraid of making mistakes. Start experimenting with a small test budget as soon as possible and in time, with dedication, your skills will improve and you’ll be able to get the higher conversion rates most businesses only dream of achieving.

Samuel Edwards
|
December 6, 2024
Optimizing for Profit (Instead of CPA, CPL, or even ROI) in PPC

What does it mean to optimize a PPC campaign?

In the abstract sense, optimizing a PPC advertising campaign is simply making changes so that the campaign performs better. But then, what exactly is “better”?

It’s a tricky and complicated equation. Your optimization practices will require tweaks to your advertising, your targets, your landing pages, and possibly even what you sell to your customers.

Most optimizers make all of these changes in pursuit of one or a small handful of different metrics. But I’m here to make the case that if you optimize for CPC, CPA, CPL, or even ROI, you might be missing out on your true potential.

Instead, you need to optimize for profit.

Too Many Metrics in PPC?

Too Many Metrics in PPC?

Part of the problem here is that there are so many different metrics you can track in a PPC campaign. We live in an era where data is abundant, and where even inexperienced marketing managers must take on the role of a data analyst at least occasionally.

When there are so many different variables and metrics to juggle, it can become overwhelming.

Just take a look at the following:

  • CPC. Cost per click measures the price of each click in your campaign.
  • Conversion rate. Conversion rate is a measure of how many people are taking a meaningful action once they explore your landing page.
  • CPA. Cost per action measures how much you’re spending for each meaningful action taken by your users.
  • CPL. Cost per lead measures how much you’re spending per each new lead.
  • ROI. Return on investment is a measure of how much new revenue you’re generating, compared to what you’re spending.
  • ROAS. Return on ad spend is like ROI, but focused on one campaign.

All of these metrics can tell you how your campaign is performing, and all of them are worth optimizing for. But when it comes down to it, are some of these superior to the others? If you have high marks in each area, does that really mean you’re performing to your fullest potential?

Let’s explore this idea.

Optimizing for Profit in PPC: A Simple Thought Experiment

Optimizing for Profit in PPC: A Simple Thought Experiment

Now let’s make the case for why profit should be your number one concern when optimizing a PPC campaign.

Let’s say we have two different businesses, Alpha and Beta.

Alpha is currently operating with a $100 CPA and an impressive ROI of 10x, ultimately earning 10 times their initial investment.

Beta is currently operating with a $200 CPA and an ROI of 5x, ultimately earning 5 times their initial investment.

Which business is doing better overall?

Your first instinct should tell you that Alpha is doing better. Getting your CPA lower is a mark of higher efficiency, and many advertisers treat ROI as the gold standard for measuring campaign effectiveness. With both a higher CPA and a higher ROI, we should expect Alpha to be better.

But of course, we wouldn’t present a hypothetical situation like this if the answer was so obvious.

The reality is, either one of these advertisers could be doing better; we simply don’t have enough information to tell.

We’re already using our imaginations, so let’s imagine a few more details.

Let’s say Alpha currently gets 15 conversions with a per-conversion margin of $1,000.

Beta, however, currently gets 40 conversions with a per-conversion margin of $1,000.

The margins are the same – but which company is doing better?

Alpha’s gross margin with 15 conversions should be $15,000.

Beta’s gross margin with 40 conversions should be $40,000.

Alpha spent $1,500 to get there, leading to an ROI of 10x.

Beta spent $8,000 to get there, leading to an ROI of 5x.

Cool! Alpha still has better overall metrics than Beta.

But let’s look at their total profitability. Alpha made $15,000 and spent $1,500, giving them $13,500 in profit. Beta made $40,000 and spent $8,000, giving them $32,000 in profit.

Now tell me – would you rather have a $13,500 profit or a $32,000 profit?

In this scenario, Beta is actually doing better. Are you surprised?

The Trick: Why Profit Optimization (Sometimes) Does Better

Seeing this scenario unfold is like witnessing a magic trick. It feels like there’s something wrong or something missing in this equation, but the crux of the trick is actually quite simple. The big difference is volume. Though the efficiency metrics of Alpha are far superior, Beta is securing more conversions. Assuming the profit margins are the same, Beta is doing better because the company is ultimately seeing more conversions from their campaign.

If you choose to focus on optimizing profits, rather than optimizing for other metrics, you can see similarly powerful results. Instead of trying to chase peak efficiency metrics or brag about your low CPA, you’ll be maximizing profit by leveraging sophisticated pricing strategies to stay competitive. This approach ensures that you are not only increasing conversions but also securing the highest possible returns – greatly benefiting in the long run.

The Dangers of Status Quo Thinking in PPC

Too often, PPC ad managers suffer from status quo thinking.

They believe that as long as they’re getting clicks with a positive ROI, the campaign is worth continuing to run as is.

Part of this is a fear of loss; if you tinker with too many variables, you could end up compromising your results rather than improving them. Another part of this is sheer laziness; why bother trying to improve your PPC campaign if it’s already performing decently enough?

In any case, it’s your responsibility to step up and continue optimizing your campaign for better performance. That doesn’t mean you can’t be satisfied with good results – it just means that you have to keep pushing for better results.

What Steps Can You Take to Optimize for Profit in PPC?

What Steps Can You Take to Optimize for Profit in PPC?

So, how do you see those better results?

What actionable steps can you take to optimize for profit in your PPC campaign?

  • Look beyond the vanity metrics. All marketers have fallen into the temptation of looking at vanity metrics at some point. In social media marketing, that means focusing on your follower count instead of the number of people buying from you because of what they saw on social media. In PPC advertising, that means focusing on efficiency metrics like CPA, rather than bottom-line metrics like profitability. You need to look at the entire spectrum of variables and metrics to understand the big picture, so you can plan your campaign as effectively as possible while also factoring in customer behavior and market demands to ensure success.
  • Don’t fall prey to confirmation bias. Confirmation bias is a killer in PPC advertising analytics. If you’re just looking for data points you can brag about, or if you’re looking to prove that your campaign is increasing in efficiency, you’ll probably find exactly what you’re looking for. Unfortunately, focusing too heavily on the metrics that prove you’re right, or prove that your campaign is working, could prevent you from discovering room for improvement. Instead, consider profit optimization strategies that align with business profit goals and maximize profitability in the long run.
  • Optimize your entire business. This article is primarily focused on PPC advertising, but if you want to make the most of your ad campaign, you may need to optimize your entire business. As you can see from our example, a higher profit margin could instantly disrupt our equations; if you can find a way to make more money per transaction, or do a better job of incentivizing more transactions, your ad campaign will instantly become more effective. Analyzing customer demand and your target market will also help you refine your approach for profit maximization.
  • Be willing to spend more. Assuming you can see steady returns and maintain your performance, consider spending more on your PPC ads. If every dollar you spend on advertising returns $10 to you, it makes perfect sense to spend more dollars. Bigger campaigns may be more complex, but they’re worth pursuing.
  • Don’t sacrifice growth for efficiency. The biggest trap to watch out for is sacrificing growth for efficiency. In the pursuit of chasing a lower CPA or a higher ROI, you could end up making changes that hurt your long-term profitability. You have to remember that profitability is the ultimate goal of your campaign – and anything that compromises your profitability is going to set you back. There’s nothing wrong with optimizing for CPA, CPC, ROI, or ROAS, but these metrics all need to be secondary considerations, with the primary consideration being profit. And of course, never lose sight of customer satisfaction, as a loyal customer base is key to sustained business profit.

Are you interested in optimizing your PPC advertising campaign for profit?

Or are you struggling to get your PPC engine up and running?

PPC.co could be the perfect partner for you. Contact us today for a free consultation or to learn more about our PPC advertising services!

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