Today, we’re taking a step back from PPC and SEO tactics and taking a 10,000 foot view of your overall marketing efforts. Specifically, how do you know if PPC is right for your company? Let’s talk about it.
Hey, everybody, it’s Jim Lastinger back with another episode of Marketing in 10. Today, we’re going to be talking about whether or not PPC, and specifically Google Ads, make sense for your business.
I’m a big believer and a big fan of paid ads because I think they’re the best way to get qualified traffic to your site quickly. But it’s definitely not always 100% necessary and doesn’t make sense for every business. There are times where I would actually advise against running paid ads.
Probably the best way to approach this is to talk about who PPC is and is not for. First, let’s talk about who PPC really makes sense for. So start with eCommerce companies. For the vast majority of eCommerce companies, PPC is a no brainer.
The only limiting factor here is your margins. If your margins are large enough that you could be profitable with a two to three-X return on ad spend, then definitely go with paid ads. Sure, it’s going to take some time to get your campaigns dialed in and optimized to the point that it’s consistently hitting a 2-3X ROAS, but once you do that, you can’t afford to not run paid ads. Next, let’s talk about lead-gen companies, and we’ve talked about lead-gen companies before on the podcast. These are companies that are looking for leads, free trial, signups, information requests, et cetera. And the key here is very similar to eCommerce companies, it’s all in knowing your numbers.
If you know your lead to close ratio and your average client value, then you should be able to calculate an acceptable cost per lead for your campaigns. And once you know that goal cost per lead, you can do some online research and see what averages are for your industry. It’s going to vary wildly, but if your industry average is pretty close to what you’ve calculated, then there’s a good chance that PPC can work for you. And it’s definitely worth doing, or at least experimenting with. On the flip side, if you need $20 leads and your industry average is $150 bucks, then you might want to invest in other marketing channels first like SEO.
And the same kind of advice goes for local service companies.Usually, the margins are pretty tight there so you’ll usually need very cheap leads, but your lead costs will be driven primarily by your market and your market size. So if you’re in a big, competitive city, then it might be tougher to get cheap leads than someone who’s running a similar business in a small town.
So we’ve talked about a few cases where PPC probably does make sense. Now let’s talk about some where it probably doesn’t make sense. So anytime you don’t know your numbers or haven’t been in business long enough to figure them out, then that’s a good time to be cautious about spending a lot of money on PPC. Feel free to run some pilot ads and see what kind of response you’re getting, but I wouldn’t put any pressure on PPC to be profitable right out of the gate.
Another case that I see quite often is a company that doesn’t quite know how to describe its product or service. So if you’ve created something new, it’s definitely going to make sense to you but that doesn’t necessarily mean that it’s going to make sense for your target audience. So people generally don’t search for things they don’t know how to describe. So the same goes for new inventions and new products. Facebook ads might be a better approach here because you can target cold audiences that might be interested in what you have to sell as opposed to using Google Ads and targeting people who would be searching for your products. I don’t think that you would waste a lot of money on Google Ads, but I don’t think you would be able to spend much either and wouldn’t be able to learn anything.
So hopefully that gives you some things to think about when you’re weighing your marketing options. PPC is definitely worth exploring for most companies, but it doesn’t always make sense. If you have any questions about your PPC strategy or even whether you should be running ads, feel free to reach out to me. The best way to do that is to visit my agency website at deepfieldinc.com and start a chat there. That’s all for today. Talk to you soon. Take care, guys.