Ok, so this is one of those questions where instead of giving you a straight yes or no answer, we’re going to go with, it’s complicated.
Whether or not you use automated bidding with your Google Ads is going to be determined by how much or little you do with your automated bidding program.
If you treat your automated bidding programs like some sort of set and forget cooking appliance, then you probably should avoid ever using it again with your Google Ads as it is likely doing you more harm than good. Whether or not you buy into a lot of lies and half-truths that are told about google’s automated bidding Strategies will determine your success with automated bidding Strategies and whether or not you should use them.
You may find that the truth of automated bidding Strategies is a bit more than you bargained for and decide not to use them. Then again, you may find that if you use them right, the benefit outweighs the work you have to put in.
If this all sounds confusing, don’t worry we’ll break it down into a digestible format so that you can make the right decision for you.
Before we dispel some of the lies and assumptions surrounding automated bidding strategies, we’ll break down how it works and explain some of the functions in case you’ve never used it and want a bit of a guide on how it works.
If you’re wondering whether you should use it with Google Ads or not, you may not be aware of what exactly automated bidding is and how it works.
Automated bidding is essentially a type of artificial intelligence program that uses user-defined parameters to bid on ad space within Google Ad auctions.
There are a large variety of ways that these programs can bid and the amount spent, frequency of bids, and many other factors can be customized and set so that it does all your ad bidding for you. Automation is a great way to save time and get your Google ads out there so that people will see them.
There are a few different strategies that you can set as well to tell the program how and when to bid on ad space that is up for auction. Depending on the parameters set, the A.I. may or may not bid if the auction does not meet the criteria.
This type of selective or smart bidding has its own set of benefits and drawbacks.
The automated bidding program works by the user setting parameters for it to work in, and by being fed data on relevant ad space, funding requirements, performance data, and other metrics. By using all of these metrics, the program picks what Google ads to bid on, how much to bid for ads and bids for Google ads based on everything it has accumulated until it runs out of applicable funds.
The most obvious benefit of this is the hands-off automation that it provides. It requires much less time to program the A.I. than it does to manually bid on ad space. The main drawback is that you have much less control over the situation.
Another benefit that isn’t as apparent is that if you’re a marketer and you’re looking to run multiple ad campaigns, automated bidding automated bidding strategies allows you to manage multiple campaigns without keeping tabs on each and every auction that comes up.
As you can see from what we’ve covered, automated bidding strategies does indeed have its uses and downsides. Now that you have an understanding of how they work, you can understand why the answer to the question of whether you should use them or not is quite complicated.
Besides PPC automation, marketers have begun to use automated bidding strategies to become competitive as well as to win more auctions in general. In a lot of cases, bidding can be difficult as the more competitive a space is, the more fierce the bidding.
Bidding too low or bidding on poorly chosen ad space can result in poor advertising returns. That is a large part of the reason why marketers and advertisers prefer an automated bidding program as they can be programmed to win inform future bids rather than bidding based on speculation or emotion.
The obvious downside to this is that they do not hold any regard for certain factors.
Certain bid strategies prioritize winning prime ad space over other factors such as customer preferences, demographic data, ROI, and other metrics. This can be useful in some cases, but also a detriment in others.
Other strategies prioritize ROI and conversion rate over winning as many bids as possible. This allows the automated program to carefully select the bids it places to try and maximize the potential return on investment or maximize the conversion rate.
While this is a great idea, in theory, it too has its drawbacks, particularly if it fails to win enough ad space for the campaign to be seen or craft it in a way that it doesn’t convert. Balancing these factors is part of the marketer’s job unless they are going for a certain approach.
From a practical standpoint, the ability to tell your automated bidding program just what to focus on can be seen as a major benefit.
As we will discuss later, these base principles aren’t all there is to it, unfortunately.
Now that we’ve covered much of the basics about automated bidding programs and how and why they’re used, we’re going to discuss some of the facts about automated bidding strategies that will help you determine whether or not to use them in your Google Ads.
When we say this, what we mean is, automated bidding can be set for a number of factors and can certainly bid on and win Google ads that will get you plenty of clicks, what they don’t guarantee is that those clicks will lead to sales.
Many marketers are under the misconception that once you put an automated bidding strategy in place, all you have to do is sit back and watch the sales roll in. This is not only untrue, but it is also highly ill-advised. Not all, but some marketers assume that as long as you tell the program what you want and give it a budget, and you don’t have to review or watch a thing, it does all the work for you.
What you should be doing is setting reasonable parameters for bids and then checking your metrics to see how the Google ads it buys are performing. Like with the example of clicks, you can be ad spend money hand over fist for ad space and get lots of clicks, but no maximize conversion. You can liken this to running a store with only window shoppers while you still pay employees, rent, and utilities. In these cases, you are paying for valuable ad space that is not driving business the way it should.
Not only should you review your ad purchases regularly, it actually benefits the A.I. of these programs. They thrive and learn off of the input. If you feed them data that something isn’t working, they learn from that over time and adjust their bidding algorithm to try and do better. This doesn’t mean it’ll always fix the problem though so you still have to watch your bids, but it will generally improve over time.
If worse comes to worst, change your strategy and keep trying. Knowledge is power…we think.
Many marketers are under the false assumption that automated bidding programs are a sort of plug-and-go situation where you feed the program the inputs you want and it will go to work immediately to win you great bids and premium ad space.
This is one of those times where the belief could not be further from the truth. The actual truth is that automated bidding programs take weeks to get up to speed. These are learning machines after all. They have an initial learning phase that takes into account all of the information they have been fed in order to get calibrated for automated bidding strategy on auctions.
The standard amount of time is roughly 2 weeks but can run longer depending on the amount of information, the strategy, and the budget. The good news about this factor is, you can essentially front-load as much information that is relevant to your ad campaign as possible to supercharge the learning of your program so that once the initial learning phase is complete, it will have a higher success rate.
This includes feeding it all your campaign data, strategy, budget, any passive audience viewing information as well as any relevant historical ad campaign data. All of this will help it learn. Many marketers do not realize that so much information can be put into the program and that it will improve performance.
A well-fed A.I. is always a good thing and with the right data, you can see excellent results. Just don’t expect it to happen overnight.
This is something that even popular brands and expert marketers get wrong all the time and have no idea why until they study up on it. Most people think that “smart bidding” is the same as automated bidding. This is one of those yes, but no, statements.
So, let us break it down for you. There are many different types of automated bidding strategy. Out of those many types, smart bidding strategies is one of them. The reason for the distinction is that marketers incorrectly assume that all automated bidding is smart bidding strategies. That is wrong. Smart bidding is considered a sub-group within all of the automated bidding types. Once you know this difference, you can use smart bidding more appropriately.
Smart bidding focuses on fixed conversion-related bidding tasks such as click targets, ROAS targets, maximize conversion rates, and cost per click. Using these you can develop specific bid strategies and very targeted bidding that can win you ad auctions with specific results.
This type of bidding has to be used with caution though as these types of bid strategies will usually tell the program to ignore other data such as cost per bid, user demographics, and other customer-oriented data.
If used properly and strategically, there are a lot of benefits and loads of profit to be made, just don’t go assuming that smart bidding is all there is or that automated bidding strategy is all smart bidding.
Just because you set an advertising budget and programmed your automated bidder doesn’t mean that everything goes as planned and you no longer have to account for individual bids.
Without the right parameters, your artificially intelligent friend can bid on very expensive ad space and quickly eat through your ad budget without you even noticing it. Within a few individual bids, you can go from a full balance to a zero balance for your ad budget.
If you see that your cost per click on some Google ads is too high, you can retarget and get better pricing or if you think you need the better ad space, increase your budget to cover the better ads. In either case, you should be sure to watch your ad spend or you’ll soon be out of budget and short of customers.
There’s plenty of customization that can be done with automated bidding programs that tell it only to bid on certain spots that have a guaranteed conversion rate or relative ROAS but using these bid strategies effectively means feeding in lots of data and letting the A.I. go through a learning phase each time you change strategies. This is a good idea if you’re trying to rebalance your marketing to achieve better results.
The important point to remember though is that if you focus on high ROAS or CPC values, your returns may not be as good if you can’t feed your bidding machine enough data to act properly. In that case, it may not bid enough to win needed ad space because it is being too selective.
Some folks are under the mistaken belief that you either MUST use automated bidding or never use it at all. The truth is, neither is correct. With the right preparation and work, automated bidding and AI can be great tools that can take a lot of the work and speculation out of bidding on ad space.
That being said, there are times when automated bidding just won’t work as well as doing things manually. Small budget campaigns, for instance, don’t typically fair as well. Additionally, overly difficult strategies don’t work as well without lots of time and input into the automated bidding system.
If you have the time to invest, automated bid strategies can be your best friend in marketing. If not, then you may be better off using the manual method and being your own judge. Don’t let skepticism sway you one way or another. Choose the option that works best for the situation you’re in. You may choose to automate some campaigns and not others, even ones running concurrently. The trick is finding what works.
That’s it. All the big secrets and lies about automated bid strategies you need to know to decide whether it’s right for your Google Ads campaign. Hopefully, we’ve given you all the info and tips you need to make the most educated decision possible for whatever it is you’re trying to accomplish.
If we can say one thing, don’t believe all the hype you read on either side and strive to find out the facts yourself.
As a business owner, you must know the importance of calculate cost/lead cost generation. It is a highly efficient way to generate new consumers, increase brand awareness and ultimately, increase your revenue.
Lead generation is one of the many ways of digital advertising/online advertising pricing model. There display advertising has been a steady growth in the amount of money spent by marketers on it, and this figure is expected to reach US$3.2 billion by late 2023.
Cost-per-lead (CPL) is a metric that businesses use to gauge their lead generation efficiency. It indicates how much a brand spends on its marketing efforts to attract a single lead.
However, not every lead has the potential to be a customer, and you have to qualify them to avoid wastage of time, marketing efforts, marketing team, and money.
Read ahead to see the importance of Cost per lead (CPL) and how you can calculate the amount you are willing and afford to ad spend on a customer.
It might seem more straightforward to choose a budget to ad spend on your quality leads instead of coming up with a strategy to select the best Cost per lead (CPL). While you can certainly do that, a target cost per lead (CPL) derived randomly will end up giving you unexpected results.
If you’re looking for tangible results, you don’t want to do that. It is essential to align the business goals you want to achieve with a target Cost per lead (CPL) as they differ from one to another, and a set percentage won’t be of any good. For instance, a profit-maximizing goal and doubling the annual revenue goal requires separate Cost per lead (CPL).
By being aware of your goals, you can decide how much you want to spend on them, according to their relevance and importance. It makes it easy to come up with various marketing strategies and carefully allot its budget.
The target Cost per lead (CPL) influences several marketing decisions, making it essential to choose it wisely and avoid wrong optimizations.
To calculate an optimal Cost per lead (CPL), you have to understand your businesses’ needs. Set the record straight with your goals and then proceed.
Of course, you want to target the right leads and spend money on getting beneficial outcomes, but before that, it is important to look at your marketing budget to check if the cost to acquire a customer falls in that range. To determine this cost, calculate a new customer’s average lifetime value.
Customer Lifetime Value predicts how much monetary benefit your new customer can provide your business with. While companies involving ecommerce don’t see customers returning, things get complicated if your business relies on local lead generation. Here customers can subscribe to services like Netflix or continually hire you for your services. Your CLV is based on all of these factors.
For instance, if a customer pays $19.99 every month for three years, that customer isn’t worth the same amount because that is just the money you get initially. In fact, they are actually worth $59.97, making it worthwhile to spend more than $19.99 to add a customer. Of course, you will lose some money initially, but the profits will be worth it as your relationship progresses.
Even though there are various methods to calculate the average CLV, here’s one of the easiest way to do so is:
Mean monthly revenue of a customer/churn rate = CLV
Let’s apply this lead formula to a practical example. Assume your company is a business widgets supplier with monthly delivery subscription models that other firms can also take advantage of.
In this case, use your company’s mean monthly revenue and divide that number by your monthly mean number of customers. For example, your monthly average revenue from a customer is $70 if 100 customers give $7,000 monthly.
To determine the churn rate, use the data for a specific month by subtracting the repeat customers from the whole number in the same month. Divide this value by the entire customer base of that month. For example, if you get 100 customers in a month and 90 are recurring customers, you get a churn rate of 0.1 or 10%.
Using these values, you can get the CLV with the help of the formula. For this example, the CLV is simply $700 ($70 / 0.1).
After figuring out your CLV, find out the actual profit margin. You have to calculate the cost to look after the new customer you get, for the entire time they’ll do business with you.
For instance, if the cost to take care of an existing customer’s requirements is $7 monthly for spending approximately ten months with you, it will provide fulfillment costs of $70.
Additionally, you have to consider more fixed costs of your business and divide those by the average monthly customer number. For instance, considering the same example, if rent, utilities, salaries, etc., amount to $5,000 monthly, that turns out to be $50 per customer monthly.
To calculate the mean profit per customer, a customer’s fixed and fulfillment costs can be used as in the equation below.
CLV – (Mean monthly costs of a customer / churn rate) = Profit of a customer
In this hypothetical example, the mean CLV was $700, and it costs $7/month to look after a customer for the business to proceed. For a customer, the monthly total average cost turns out to be $57. For a customer’s lifetime, this amounts to $570 ($57 / 0.1).
Subtract this value from the average CLV to get a profit of $130 ($700 – $570).
After calculating the amount, you can spend to convert a lead into a customer, work backward and figure out the cost you can bear to achieve this.
In an ideal world, we could consider the possibility of finding new customers out of all the leads, but those who have chased leads know how hard that can be. Use the following formula to calculate the amount you can spend on every new leads:
(Monthly sales closed / Monthly leads) * Profit of a customer = Maximum CPL
In the hypothetical scenario above, if you get 250 leads every month and close 50 out of those, you can spend $26 on every lead ($130 * (50 / 250)). If you spend more, you’ll lose money on each customer.
In addition, running and tracking metrics on a remarketing campaign means bounced traffic may not yet be a complete loss to you.
Even though you know your budget for a customer, it doesn’t solve the mystery of how much your target cost per Lead (CPL) should be, which ultimately comes down to your business goals.
Understand what your ultimate goal is. Is it to make tremendous amounts of money or reel in potential investors by showing you can get customers? The target cost per lead (CPL) for both cases will be different because you should be prepared to have some loss initially in the former case so you can build a solid customer base. Here, you will have a profit margin that is lower than the target CPL.
Of course, this is not a recommended business practice, but it is a clear indication of the importance of using the optimal Cost per lead (CPL) according to your goals.
Now that we have figured out how much you can and are willing to spend on your target cost-per-lead, let’s get to an essential part of this process: all the customers are not worth the exact cost.
Using the average CLV to choose a target Cost per lead (CPL) is a great approach, but what happens when you find more valuable customers to your brand? In this case, you have to assess what the right Cost per lead (CPL) will be according to the different customer types.
Let’s look at the ACME Widgets case because they sell the best widgets, and their average CLV is a whopping $24,000!
If you use the above hypothetical scenario calculations with the $24,000 mean LTV, a high acquisition cost per lead will be affordable for you.
However, it helps to know what types of buyers you have. In the case of ACME, there are three critical types of buyer personas, including Widgets Classic, Widgets Pro, and Widgets Infinity, with average LTVs of $1,750, $72,000, and $1.59 million, respectively.
These buyers with different LTVs enable you to spend differently on them. You can spend much more on Widgets Infinity leads than Widgets Classic on any day.
Not only this, your entire marketing campaigns/ad campaign varies with the different types, which you work on when you decide the optimal Cost per lead (CPL).
Compartmentalizing leads makes things simpler and enables you to spend wisely than choose some strict acquisition cost. For instance, Classic, Pro, and Infinity’s acquisition costs are $1k, $12k, and $202k, respectively.
These different buyer personas help you understand the amount needed in turning a lead into a customer. It will allow you to be more strategic in your approach towards the right Cost per lead (CPL).
For instance, an Infinity customer may require a target Cost per lead (CPL) Compaigns that is 80 times more than that of a Classic customer, but the higher cost shouldn’t budge you too much as Infinity would be a lot more profitable in the long-term.
If ACME Widgets would’ve stuck to an average figure to spend on every new lead, they probably would’ve closed most of the marketing channels and google ads that got them Infinity leads which would be detrimental to their business. Marketing channels are the most important thing!
For effective marketing campaigns that include a lead generation strategy, you have to invest time, cost-effectiveness, money, and effort to get valuable results.
Picking the right target cost-per-lead requires accurate thought and calculations so you can focus on the customers appropriately and optimize the right aspects of your paid marketing plan. This is particularly true if you’re manually doing the work and not automating your bidding on keywords in PPC. One of the most important things to recognize in this entire process is your business goals to identify the optimal Cost per lead (CPL) that your marketing campaigns/lead generation campaigns requires. Additionally, you have to consider your customer base to make the right decision.
Know the search engine optimization leads you want to focus on because not all of them are the same. Once you have this idea, it’ll be easy for you to make an informed decision rather than picking random figures and wasting your time and money!
Engage our PPC management services today and find out how we can help you dial-in your cost-per-lead!
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Understanding your conversion rate will help you assess the overall success of your marketing efforts. Conversion rate optimization is the process of improving the rate at which potential customers complete the objective that you want them to. It could be subscribing to your newsletter, making a purchase, donating to a charity, any action that you want a visitor to your site to complete.
Optimizing your conversion rate is not something that is easily done or something that can be done once or twice. That is why it is best to find a CRO service that can help you with the process every time you need them. In this post, we’ll explain the important points about your conversion rate as well as how to find the best conversion rate optimization service for your needs.
Most marketers are aware of what a conversion rate is, but may not have a tight grasp on just how much it can impact business performance, the cost of customer acquisition, and other aspects that are difficult to gauge by just looking at an ad campaign’s results.
Having a surface-level understanding of conversion rates is fine if you just want to plod along in your marketing, but if you’re shooting for real success, then knowing more about how your conversion rate impacts your business will help greatly when it’s time to find an optimization service.
That’s the first mistake a marketer is likely to make, if people aren’t converting, there must be something wrong with the ad campaign or the way you’re marketing the business.
While the type of ads you run, their placement, and frequency all matter in terms of people seeing the ads and knowing about your business, there’s a lot more to your conversion rate than that.
A conversion rate optimization service will have the tools to analyze all the aspects of your business to pinpoint key issues affecting your conversion.
We’ll break down some of the other issues that affect conversion so that you know more about what to look for.
As we said, there’s more than one reason why your conversions may be underperforming. Part of the process of converting is making it easy for the process to happen.
Sure, the first step in conversion is getting them to your site, but whether or not they follow through with what you want them to do is due in large part to how easy it is to get around your site and complete whatever process you have for them is.
Poor website design can mean a number of things. The first thing to consider is: Is your website optimized for the device they’re using? This plays a lot into SEO in general but the user experience is crucial to conversion.
A good CRO service will test your site fully and understand where potential leads are being turned off. The list of things that the best Conversion Rate Optimization Service will explore and test is nearly limitless.
One thing to note is that the majority of traffic now comes from users on their mobile devices. If your site isn’t optimized for mobile, you may be driving away a good portion of your traffic before they even attempt to convert.
Factors like image size, loading times, navigation, and ease of access all affect mobile optimization.
The CRO Service you choose will know best practices for optimizing for mobile so that traffic from mobile devices has an easy time accessing your site.
Another factor that often goes overlooked once a user actually clicks on an ad is the landing page. User experience begins at this point. Sure the ad drew them in, but the landing page is what keeps them interested in what you have to say, sell, or do.
The best conversion rate optimization services will test multiple variables to see what works and doesn’t on a given page, changing text and other elements around to see what converts more.
Whether or not you’re using dynamic landing pages, optimizing the page to convert is not the same as optimizing specifically for SEO. The most well-designed pages may not convert well due to certain elements. It’s important to have a conversion rate optimization service audit your landing pages to see what is and isn’t working.
You’ll want to have your CRO service on standby each time you change out ad campaigns and landing pages. Successful businesses maintain regular audits to ensure their conversion rates remain high.
As ad campaigns change and new content is added, you should be routinely checking to see if your conversion rate is up to snuff. That’s why doing it yourself would be time-consuming and extremely costly.
The best CRO services will offer web analytics to tell you how your site is performing and how to improve SERP ranking to drive traffic. Traffic volume helps with possible conversion and combined with conversion optimization will lead to much better customer acquisition rates and lower costs.
eCommerce sites can have a particularly tough time drawing in conversions if their site isn’t optimized for easy use. Having a poorly organized site, difficult to navigate menus, gaudy graphics and images, and other problems can severely affect your conversion rate.
This is not only damaging for an eCommerce site, it can literally end your business by having you spend exorbitant amounts on ads only for potential customers to window shop or get disgusted and leave.
Imagine for a minute having a brick-and-mortar store that pays its employees all day to have no one come in and actually buys anything, this is essentially what happens with the marketing budget of an eCommerce site that doesn’t convert.
Just like with other sites, the best CRO service can pinpoint your weaknesses and devise ways to keep customers on the page and shopping. They can test all the images, graphics, product listings, payment setup, and more to determine what works and what doesn’t.
Now that we’ve finished diving into all the conversion rate problems with your site, we can delve into how a conversion rate optimization service can save your advertising campaign and how they can multiply those ad dollars through higher customer acquisition rates and lower costs.
Just like with your website, many factors can affect your conversion rate when it comes to your ad campaign. Figuring out just what the problem is from raw data can be a frustrating mess, even for the best marketing consultant. That’s why you need someone with the tools and the strategies to figure out the problem and propose workable solutions to help you fix it.
Your CRO service should know the ins and outs of all the different types of campaigns to help you figure out whether your ads just need some work, or it’s time to reevaluate your entire strategy.
We’ll break down some of the elements so that you understand what your CRO service should be looking at and how it helps your business.
Whether you’re using automation or AI to buy ad space or you’re doing it yourself, the targeting strategies you use can affect your conversion rates. Having too high of an expected ROAS or CTR can make your ad spending ineffective at best and extremely costly at worst.
Expecting a 20x multiplier on every ad dollar spent when you don’t have the market share to get it will quickly see you throwing your marketing money away. The same is true for an absurdly high click-thru rate.
Another thing to consider in regard to targeting is the audience you are targeting. Ad space targeting is one consideration, but whom you go after is another. Web analytics helps you determine the demographics of your likely customer and can help you shift your market focus to perform better in terms of conversion.
An effective CRO service will have the means to address your targeting strategies on both fronts and help you reevaluate and retarget as needed. This is something that can change from campaign to campaign, so you’ll want your CRO service to perform an audit every so often to ensure conversion stays up.
There are many types of advertising on the web, but paid search marketing is the most widely used and recognized. Knowing how best to utilize this method and getting the right conversion can be difficult even for an experienced marketer.
Paid search marketing is the optimal way to market your product or service as users will have already gotten some idea of what they want when they see your ad in the SERP. The problem with these is often lack of oversight.
Setting up a PPC campaign that relies on paid search marketing and not optimizing it, or optimizing PPC once and leaving it will result in lost potential. Managing your paid search marketing on a regular basis requires regular audits and changes, often weekly.
This ensures that your conversion rates are always as high as they could be. The best CRO service will be able to manage your paid search marketing and keep it up to date and converting over the long term.
The best CRO services will actually actively monitor your paid search campaign and make changes as needed rather than waiting until your conversion drops and your money is wasted. Investing in the right CRO service can save your ad dollars and make you money.
There’s a lot of potential conversions from social media marketing campaigns. Ads that run on sites like Facebook can reach many more potential leads than other methods and as such can be a great source of revenue for businesses
The problem is that managing social media ad campaigns can be complex. For one, your targeting strategy for your specific market has to be tailored in the right way to reach the 1 billion users on the platform.
This means understanding how the platform integrates ads and shows them to users based on key metrics. Even an experienced marketer would have trouble analyzing all of that data alone. That’s where a conversion rate optimization service has the ability to help you manage your campaign. The best ones will have tools and software to analyze your ad metrics and target your specific audience better so that more of the right kinds of leads see your ads.
LinkedIn is a resource that is often mismanaged due to the sheer time it takes to target and market effectively. Generating leads on LinkedIn can be time-consuming, to say the least, and even a team of marketers doesn’t have all the hands necessary to manage posting, messaging, follow-ups, and lead generation.
The problem with LinkedIn ads management for many marketers is not the volume of potential targets, but the caliber. Much of the marketing done on LinkedIn is direct to business executives and professionals. B2B marketing is very much message based. How you would talk to the average consumer is not the same way you would speak directly to a business.
Messaging is much more key in this space than on other platforms. The added reach of being able to reach other businesses directly is worth the effort if it matches your market space, but the proper help is needed to do it right.
The best conversion rate optimization services have tools and automation to help you market effectively and convert on LinkedIn without hours of cold leads and wasted effort. The right CRO service will help you identify and communicate with leads that will actually close rather than typical mass marketing efforts.
The best way to gather all the information and metrics to see how your advertising is doing is by auditing your Google Ads account. The sheer volume of data can be a bit much to sift through, from your projected budget waste to your mobile strategy, CTR, and other factors.
The best way to handle an audit of your Google Ads account is by relying on an experienced CRO service. The best ones will look over every metric of your account and work to optimize the performance of the whole thing. Ideally, this is the place you start if you plan on overhauling your marketing efforts with a CRO service.
The best CRO services will perform a full audit of your Google Ads account and work forwards to develop a marketing strategy. Beginning your conversion rate optimization with a Google Ads audit can help to prioritize the areas that need the most attention.
These are most of the key areas of marketing that can benefit from a CRO service as well as what to look for when trying to find the best CRO service for you. If even one of these areas of your marketing strategy needs attention, consult a conversion rate optimization service to make sure you capitalize on all the business that could be coming your way.
Managing PPC campaigns or multiple ad campaigns across different skews can be time-consuming, frustrating, and costly. That’s why paying a PPC management agency is a good idea. Overpaying is not, however.
Determining what you should pay and the type of agency or services you want will require many different considerations about your business, your willingness to spend on PPC advertising, and how much effort you want to have to put in yourself.
Most PPC agencies have different pricing model’s based on different needs and the scale of pricing can vary wildly, it’s only one of the reasons clients have issues with their PPC agency. The upside is that a good agency can get you much more of an ROI than a typical marketer is capable of.
It’s a given that you’ll have to spend money on advertising in order to draw in customers, but much of that money can be wasted with ineffective PPC campaigns. The right PPC management will keep your Google ads fresh, well-targeted, and ever-evolving to consistently engage your market.
The core of figuring out how much to pay will be determined by the type of strategy that works for you and how much you can afford to spend in return for managing your ad campaign.
There are three standard pricing model’s that each work differently and are best suited for different types of businesses as well as additional fees and services that you may want to consider.
We’ll detail each model and then discuss the optimal situation where that pricing model would work to give you an idea of what’s best for your business and campaign strategy.
The way these models of pricing work, is that companies pay an agency a set percentage of whatever their base ad spending is. The company then manages the ad campaigns based on regular ad spend percentages.
In many cases, the more campaigns the agency manages, the lower the percent paid gets. This means by volume the agency makes more money but the business pays less. This is not the case for every agency but is standard practice for many of them.
This is generally the most common pricing model used and does not include additional fees and services provided by the agency. One caveat that comes with these pricing model’s is that they typically require a minimum amount of ad spend to operate regardless of the overall budget.
The percentage is also set by the agency and once locked in, can be difficult to renegotiate, especially mid-campaign. This means that fees are locked for a period of time regardless of return or tracked performance unless otherwise stipulated. Knowing the conditional stipulations that apply to your PPC management contract will help to avoid unnecessary costs.
These types of pricing contracts are best reserved for big businesses with big PPC advertising or ppc ads budgets. This is mainly due to the minimum required spending that accompanies these pricing plans.
Small to medium-sized businesses may not be able to afford the price point of these plans and the required minimums.
Additionally, larger businesses that run more campaigns or that have large ad portfolios will benefit more from the decreased fees associated with higher workloads on these price plans.
Larger businesses also have the ability to absorb the cost over the term of a contract if the ROI is not as high as it may have been forecast. Businesses with minimal budgets or that cannot absorb extra costs would not be well suited to these models due to the lack of control overpricing.
This is a fixed fee model that is determined by the associated costs and scope of managing a client’s static ad campaign. The fees and assessments for managing a business’s ad campaigns are all built into one payment.
This provides a set range of PPC management services for static campaigns and covers all associated monthly fees. This provides businesses with a set cost for a set run of ad campaigns.
The one typical downside to this type of payment model is that it is not easily modified and the scope of services may be less than other pricing models. Performance is also not guaranteed. The PPC management fee’s are paid regardless of how the Google ads campaign perform unless otherwise stipulated in the contract.
This type of setup can be a double-edged sword for businesses as the simplistic structure and flat fees are beneficial, but the range of services and performance may be limited. It’s best to discuss exact details before deciding on this type of payment model to ensure the services are what you need.
Though this type of pricing model is not as common as the percentage of ads spend model, it can be beneficial for businesses that run a set of standard, static ad campaigns on a regular basis and simply need them managed in some capacity.
Smaller businesses that prefer to pay a flat fee may also choose this model over others so that they have more control over the exact price they pay. The simplified pricing and limited PPC management services also serve smaller less complex ad campaigns better.
Larger businesses or businesses that run constantly changing ad campaigns, seasonal Google ads, and other promotions would not benefit from this type of pricing. The fee structure is based on static ad campaign costs and the PPC management and oversight level is less than that of other plans.
This means essentially that complex ad campaigns will not receive the PPC management and attention to detail that they need to capitalize on their potential and will therefore have diminished ROI. Even if the cost is lower, in these cases the loss of potential revenue may cost even more. It’s like buying a cheaper product to save money and then having it break two days later.
These models are much less prevalent than the previous two and are tailored to less traditional campaigns that rely on leads generation to close sales. In general, this model is used for campaigns such as e-mail marketing, cold calling, B2B sales marketing, and other types of direct sell campaigns.
Agencies typically manage these campaigns and collect a fee-based either on overall performance or per lead that closes in a sale. Though the niche for these types of campaigns is smaller, the costs associated are also much more mitigated than other options.
This option works exceedingly well for eCommerce, direct sales, and referral models.
As we’ve discussed, this model is rarer than others due to the niche nature of the campaigns that use it. However, businesses that market directly or use conventional sales tactics can make great use of this as a leads-generation service to drum up sales.
The basic idea is that you only pay when they bring you a client. This makes the cost relative to client acquisition a worthy exchange in most cases. Linkedin campaigns, B2B campaigns, and direct-to-consumer sales would benefit greatly from this model.
Traditional marketing tactics, ad campaigns, and site-driven sales would not benefit from this model as the overall benefit would be lower compared to the cost per customer.
The plans we’ve listed are the top 3 that are most common, agencies may include other plan options as well as PPC management fee.
Typically, PPC management services fees are flat, static, and applied on top of standard pricing plan rates. The benefit of agencies that offer these fees is that the level of service is usually higher. In particular, services offer more control over ad campaigns, including automatically rotating or updating ads, managing dynamic ad campaigns, updating copy and other elements, and monitoring performance.
The fees for these services aren’t cheap, typically ranging from $500 to $5000, but the benefits are great for businesses with large campaigns who can afford the added cost and want more precise control of their PPC campaigns.
Before you decide on a plan, having a full understanding of your needs will help you determine what you need and what you should pay in terms of required services, changes, and other issues. It’s not enough to say “well, I can afford this much, so that’s what I’ll pay.”
First of all, take a look at your business’s PPC advertising or ppc adsstructure. Look at your base performance, decide what you want to improve. If you don’t have a dedicated PPC advertising/ppc ads program or budget, try to get an idea of what you want so that you don’t go into negotiating with an agency blind.
This is why larger businesses can afford to pay large premiums, they already have the ad budget and the return on ad spend usually covers any costs associated with using an agency.
Once you have a budget in mind, you can begin to decide on what plan would work best. This includes considering whether you want to pay for additional PPC management services.
The fees on percent ad spend plans are fairly standard and don’t leave much room for negotiation, but performance-based models and flat fee structures usually leave room for negotiation in terms of service and price. The larger and more complex your ad campaigns, the more you’ll spend overall, but you can also expect a higher ROI in these cases, with a good agency.
Before you sign the contract, make sure you have a PPC audit performed and go over any and all particulars so that you know where you stand. Having stipulations in your contract that cover you in case of downturns in business, poorly performing Google ads, or dynamic ad campaigns will allow you more control over your campaigns and protect you from the unexpected.
To help you figure out how much you’ll be spending, we’ll break down some of the standard industry fee structures.
Estimating is key to success in Google Ads.
Startup Fees are essentially assessment fees that are paid at the start of the contract. These are usually paid regardless of whether you start a long-term contract or are month to month. They can range from a couple of hundred dollars to several thousand depending on the agency and the scope of the PPC management services needed.
You’re paying these fees up-front for the agency to put together a plan for your ad campaigns and the PPC management services requirements. What you get for these fees, however, depends on the agency, so don’t expect a guaranteed level of service just because the startup fees are higher.
Contracts typically come in three types when you sign with an agency. Depending on your situation or budget, choosing one type over another may have more benefits.
Some agencies offer month-to-month contracts that allow you to change or alter services on a monthly base or quit the contract after the next 30 day period if you so desire. If you’re uncertain about your need or want to test out the agency before committing to a long-term contract this is a good option.
Though rare, some agencies offer a no-contract option. This allows you to end service at any time. Fees may be applied, but this may be a good option if you face financial difficulties or find that the service you are using isn’t working out. Those who don’t like commitment may prefer this option as well.
The standard option for most agencies is a term contract. These typically range from 3 to 12 months. These contracts can include performance minimums and expected services as well as all minimums and fees associated with payment. Payment is typically made on a monthly basis and can include the contract fee as well as PPC management fee’s.
There are three components to PPC management agency fees: Monthly click budget minimums, the standard monthly base fee, and the percentage of ad spend fee.
The first component and one that you should be aware of before signing is the monthly click budget minimums. These are the minimum ad spend budgets that an agency will work with. This is especially important if the agency takes a percentage of ad spend as part of their fee. If you don’t meet these minimums, you may need to change agencies or renegotiate the terms of your contract. This can determine a lot of the expense. Smaller businesses with tighter ad budgets may want to shy away from agencies with high minimums.
The second component is the base fee. This can be structured in a number of ways, but the base fee can be considered the minimum you will pay the agency for their work each month. Some agencies charge this as a flat rate or have flat-rate plans that don’t add additional charges.
Some require a base fee, plus hourly expenses based on workload. Others have a base fee based on keyword count, tiered fee structures, or fees associated with each service, as an a la carte service.
The normal practice is to charge a base fee, plus a percentage of either ad spend, or a percentage of the total PPC advertising budget, both of which can become quite hefty and can range from a low of 15% and a high of 50% of ad spend.
You should assess your financial health and your overall marketing budget when deciding on the type of payment structure and agency to choose.
Understanding the benefits and costs of a PPC marketing agency allows you to make more educated decisions on what to pay. What that number is for you will be dependent on a lot of factors.
The best answer we can give you is to do a hard inventory of your business’s finances and marketing budget and determine what you can afford to spend, even if things don’t go your way.
In general, you can expect a great return on your investment, and using a PPC management agency is a fantastic resource, but you shouldn’t over-leverage your advertising budget in case your conversion rate drops or your business suffers a downturn.
The rule is: pay what you can afford for the services you need most. Even a big business needs to be smart about where it puts ad dollars in order to maximize profits. Paying for things you don’t need is never a good idea.
Hopefully, this post has given you everything you need to know about PPC management agencies, how they work, their fees, and what you can expect to spend.
If you’re thinking of hiring a PPC agency or firing your existing PPC agency, get in touch!
Now you’ll have a better idea of what it’ll cost you and what you should and shouldn’t pay the agency you choose.
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