How does PPC work?

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by | 14/04/2021 | Marketing | 0 comments

PPC or Pay Per click is a service offered by Google and others that allows you to bid on certain words and phrases and display ads at the top of the search results when people search for those terms.

Let’s say you are a psychotherapist based in Manchester and want to gain more patients, you might look at setting up a PPC campaign using phrases such as these:

therapy Manchester – £4.18
Manchester therapists – £3.52
therapists near me – £3.27

This gives you an average Cost Per Click (CPC) of the selected terms of £3.32 per click, this means that when someone searches for one of those phrases they may see your ad, and only if they click on it will you be charged.

When starting out we don’t have any data to work with so we have to make some assumptions, as a general rule of thumb I tend to suggest 1 in 10 clicks should get you an enquiry giving you a Cost per Enquiry (CPE) of £33.20,

Here we need to look at your conversion rate, let’s say for every 3 enquires you get, 1 becomes a paying customer so your Cost of Acquisition (CPA) is £99.60. 

NOTE: While the CPA may seem high, for example if you are a therapist charging £60 per hour, you have to consider the lifetime value of a customer, lets say on average a customer has 10 sessions, its now cost you £99.60 to bring in £600.

You can then use these figures to work out a budget, for example if your aim in to bring in 4 new customers a month, you need to be spending in the region of £400 per month.

Account Management

The job of an account manager, whether you are doing it yourself or paying someone else to do it for you, is to optimise and improve the campaign, there are many ways to do this, they include:

Improve Quality Score
Quality Score is a metric Google uses in calculating the Cost Per Click, it takes into account amongst other things how well the ad targets the page, and how often that ad is clicked, the higher the quality score the lower the cost per click. So continually monitoring and optimising the quality score of your various ads can make significant difference to your CPC.

Split Testing
This is where we run 2 or more ads at the same time and compare the results, constantly changing and removing those that perform less well.

Changing Key phrases
Based on the data we get from running the campaign we might find that some phrases have lower conversion rates than others, We may choose to drop these and replace them with others.

Website Optimisation
Creating specific landing pages for different ads, and optimising the content to increase conversions can increase the number of enquiries you receive and therefore lower your costs per enquiry.

Account Management Costs

This is often related to your budget, if you have a £200 per month budget, once its up and running you can probably keep it ticking over nicely with an hour of maintenance a month. If your budget is £20,000 per month you are going to want someone look where you are spending in the region of £150 per hour on clicks you are going to want someone looking at that campaign every day.

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