How to Project a Successful PPC Campaign in a Competitive Industry Vertical
We have just finished a piece of consultancy for a new company looking to do PPC and SEO in an established and competitive industry vertical. The difficulty with these verticals is they are highly optimised with authority website on the SEO, and competitors on PPC have a substantial PPC budget to cover CPCs that are in excess of £10.
As specialists working with SMEs, we wanted to ensure that we support this client as best as possible so our consultancy to look at the PPC and the potential opportunity to enter this crowded space cost effectively, whilst achieving an ROI to allow the company to grow.
Here is a basic overview of the process we went through in order to determine whether it was viable or not.
- Keyword Brainstorming. As a team we brainstormed a list of possible search variations for their industry, targeted to their products and services.
- Keyword Research. A few hours was spent looking at all the variations of search terms that were being searched for on Google, looking at the competition level and the estimated CPC. We were then presented with a complete list of potential keywords
- Filter for Intent: both parties sat down to review the list to work out which keywords had the highest conversion intent. Some keywords had obvious browser intent where the searcher is just looking for information – these keywords were discarded. If we had a bottomless pit we would advertise under these keywords to hook the customer in and hopefully they will convert later on in the buying cycle, however because our budget is finite and needs to focus on return we have only selected keywords that have clear purchase intent. For example, “car stereo” can be searched by anyone, but likely to be used by someone looking for information about the different car stereos available. Someone searching “buy JVC-KW-R400 car stereo” is highly likely to be searching to make an immediate purchase. These are the keywords we want to bid for in our PPC campaign.
- Search volume deduction: Taking the keywords with high conversion intent we determined the search volumes based on exact match. We could put the PPC campaign on broad match and use lots of negative keywords, however for the sake of doing the projection we have used exact match to give us best indication of search volumes.
- CTR estimate: We next calculated the click through rate of the advert. Based on the tight targets need to achieve ROI we have projected a low CPC and therefore likely to appear lower down in positions 5 to 8. Therefore we choose a CTR of 3%.
- Clicks: we determined the number of clicks by using the exact match search volumes multiplied by the click through rate.
- Conversion Rate: this projection was for a lead generation website which average at about 5%. Ecommerce websites should be a little more conservative, and can vary greatly. If you have old data from somewhere for your own website, or have conversion rate data for your industry then this is useful for your projection. Some ecommerce websites convert at 8% but others convert at 0.02%, it depends on the quality of the website, the type of product sold, etc. If unsure, please consult an expert to get a guide. In this case we projected 10% which is ambitious and will need a very strong call to action and USP to win over searchers to leave their details on the website, particularly in a competitive market place.
- Conversions: From the conversion rate we projected the number of conversions we expect to receive monthly through the PPC for this set of keywords.
- Lead to sale conversion rate: the company then confirmed how many conversions they expected to make and we could then work out the number of sales per month from the PPC leads.
- Sales revenue: from the number of sales we could project the sales values based on the average order value.
- Profitability: So we knew our projected sales based on this keyword set, however we did not quite yet know what our spend would be and therefore what our profit would be. There are a couple of ways to do this. We could firstly take the estimated CPC that Google gives for the keywords we researched, multiplied this by the projected number of clicks to work out the cost. Or, which is what we did, we determined what our maximum cost per click would have to be in order for us to achieve a return on investment ratio of 7. That way we could work out our maximum cost per lead, and then based on a conversion rate of 10% our maximum cost per click.
There are a few. Firstly there is no direct correlation between the CPC, the CTR and position which are all correlated in reality. Therefore whilst our max CPC gave a positive ROI there is no correlation between this CPC yielding a CTR of 3%. This may be higher or lower.
All the variables may change. For example, the CTR, CPC, conversion rate, and lead to sale conversion rate may all be somewhat different in reality to what is used in the projection. Unfortunately that is why it is a projection, it isn’t cast in stone. However what we do know though is that the CPC is in our hands to control so if we can see that ROI targets are not being achieved by a keyword then amendments can be made. It also doesn’t take into consideration the quality of the adverts or the landing pages, both of which are in our control and can have a big difference on the bottom line.
If you are thinking of a doing a PPC projection then be mindful that there are many variables. Instead of adding in a variable plucked from your head use some insights and theoretical reasoning to deduce. This will increase the accuracy of the projection. If you need help with a projection then please feel free to contact us.