How to Lose Money on PPC and Still Grow Sales
Paid Search

How to Lose Money on PPC and Still Grow Sales

Many marketers view pay-per-click (PPC) advertising as a vehicle for direct response marketing only. How could they not? With fully transparent metrics — cost per click, conversion rates, and cost of customer acquisition — it makes sense to think of PPC that way.

What is often lost in this formula is the value in engaging with site visitors, even if they do not directly convert from a sponsored Adwords placement.

Taking Branding Into Consideration

It seems counter-intuitive to say this, but losing money on pay-per-click advertising can be an ingenious move. PPC can support branding initiatives by boosting your visibility across the web.

Think first about the real estate on a search engine results page (SERP). Above the fold, users tend to discover significantly more ads than they do organic search results.

Naturally, this is an advantage and a disadvantage. The pessimist would see it as Google’s attempt to increase ad revenue and squeeze more dollars from hard-working marketers. The optimist would believe this is an opportunity to capture more value above the fold and pay-to-play on the world’s largest customer acquisition platform.

Amerisleep.com search results1 380x171 How to Lose Money on PPC and Still Grow Sales

Screenshot taken 06/29/2014 of Google search result for “Amerisleep”

My company, Amerisleep, makes it a point to pay for product-focused keywords as well as branded terms. The screenshot above demonstrates how much extra value there is in investing in PPC.

The ad pairs well with our organic search result and, together, they make up two of the five results shown above the fold. By capturing more real estate in the SERPs, we ensure we drive more search traffic our way (and away from third-party links we have no control over).

Although this PPC ad example is actually profitable, many marketers would worry it cannibalizes clicks to our organic search result, especially because most brand names go uncontested. But that’s shortsighted thinking, and you would be surprised by how much more value search marketers get from branded PPC ads.

Even if it turned out that paying for our own branded search term cost us more to maintain than it helped to drive revenue, without a doubt, we would continue to throw money at it. Why? Because we want to make sure that our competitors, such as the one that has cleverly placed an ad against ours, had fewer opportunities to steal market share.

A Multi-Channel Approach

Marketing 101 suggests most customers will only purchase after multiple touch points. PPC can serve as one, or several, touch points and works particularly well when it plays a part in a multi-channel strategy.

Interestingly enough, PPC helps fuel SEO conversions because when users search your business and related items again, they will eventually convert. At times, the synergy between the two can be immensely powerful.

Take, for instance, a case study by Melissa Mackey published on Search Engine Watch.

In it, she describes a situation in which an anonymous B2B e-commerce company tested PPC advertising to boost sales. After 10 weeks, the website saw a 17 percent increase in site visits, but, more importantly, a 136 percent leap in sales. Of course, PPC was not the website’s sole marketing channel. That said, Mackey dives deeper into the numbers to reveal the true value of PPC on sales. She writes,

We found purchases that were touched at some point by PPC had a 21 percent higher average sale than those not influenced by PPC.

The beauty of a diversified approach to marketing is that although certain channels may seem like “loss categories”, your overall marketing performance can skyrocket.

To ensure you make the most of your PPC campaigns and capture value from site visitors, reel them back in with retargeting, email marketing, or social media promotion.

As an advertiser, you may notice the direct response results from your PPC campaigns become increasingly unprofitable after you first introduce them. Over time, you will realize those losses are minor investments that ultimately support growth and sales in other areas of your business – making PPC entirely worth it.

Are you willing to lose money on a single marketing campaign to expand your overall company?

 

Featured Image: epSos.de via Flickr. Used under license.

 How to Lose Money on PPC and Still Grow Sales

Firas Kittaneh

CEO & Co-founder at One Mall Group
Firas Kittaneh is the CEO & Co-founder of One Mall Group and Amerisleep. His award-winning team is focused on bringing housewares online to a larger consumer base using cutting-edge technology. Learn more about his passion for entrepreneurism and fitness by following him on Twitter (@firaskittaneh)
 How to Lose Money on PPC and Still Grow Sales

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5 thoughts on “How to Lose Money on PPC and Still Grow Sales

  1. Firas, the study by Melissa Mackey looks extremely interesting. The only drawback I see is that it was for a B2B e-commerce company (richer content, richer ads). Do you know any similar studies for other types of businesses?

  2. It’s true though. If you had a vast marketing budget for a new website and paid for 1 million visits via PPC and turned it off next month. I would guarantee that a certain percentage of that would remember the brand and come back. PPC is a great brand awareness tool when you think of it.