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How to Assess the Value of Pay-Per-Click Leads

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There really is no simple answer to what should you pay for a PPC lead. This presentation authored by the search engine marketing experts at www.ToTheWeb.com presents 7 factors for calculating cost per action (CPA) to help put you on the path to higher ROI with pay-per-click.

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How to Assess the Value of Pay-Per-Click Leads

  1. How to Assess the Value of Pay-Per-Click Leads
  2. Pay-per-click advertising is 
 the fastest way to generate leads for highly competitive keywords
  3. What should you pay for a PPC lead? QuestionAnd there are no easy answers Good, Common and Tough
  4. No benchmark exists for the cost of a lead • No standard cost per action conversion rate
 • Baseline conversion rates are different for 
 every industry and their products • Cost per actions differ between verticals 
 and products • Advertisers can measure a variety of actions
  5. What do your competitors pay?
 • Ad networks don’t divulge 
 competitor data • You cannot know what 
 keywords your competitors 
 bid on 
 
 (Despite what shady tool vendors may say)
  6. What actions do we want to measure? 
 • Request for a demo • Lead form completion • Download • Online chat • Video view • And so on… CPAs vary…
  7. CPAs vary… 7 Factors for calculating CPA
  8. 1 Keyword mix • May or may not include your brand name
 (Brand keywords are generally inexpensive) 
 • Short tail vs. long tail keywords

  9. 2 Ad networks • Search • Display networks • Retargeting Conversion costs differ by media platform
  10. 3 Geographic locations Costs differ by country
  11. 4 Offer types Your campaign may feature a variety of offers • For example, a product demo vs. a white paper download = much different values • Consider propensity to buy in assigning values to actions • Weigh CPA against the value of the lead

  12. 5 Competitive campaigns • A common strategy is to bid on searches for the names of your competitors and/or their products
 
 A costly CPA strategy, but could deliver very valuable results
  13. 6 Quality score • A measurement of how relevant an ad 
 is to the keyword and landing page • Maintaining good quality scores allows 
 for full ad delivery and lower CPCs • Measured based on the likelihood • of a click-through
 A good quality score = lower CPC + higher position
  14. 7 Timing • CPAs fluctuate by seasons • Periods of heavy ad testing • Holidays
  15. CPAs vary… 3Additional considerations 1 2 3
  16. Length of sales cycle • Numerous people may be 
 involved in the decision • Leads can take a long time to 
 surface and qualify • A lead may initially see an ad 
 on a mobile device and convert 
 on the desktop 
 (Difficult to attribute to the PPC campaign)
  17. Product cost • A $10K product vs. a $100K product • Expect lower CPAs for lower priced products

  18. Lead actions • Campaigns may 
 have multiple CPAs • Values differ 
 by action

  19. Technique for formulating lead costs What you need to know to make this calculation: • Leads from paid media in the prior year • Sales from paid media in the prior year • Revenue generated in the prior year • Total cost of paid media
  20. Example formula How may sales came from paid media last year? How much revenue did those sales generate? How many leads came from paid media last year? How much was the total paid media cost? 420 Sales $270,000 ($99/sale) 1,000 leads $240,000 CPA = $143
  21. PPC platforms
  22. We work with B2B companies with lead generation challenges. Our search engine programs drive visitors to your site. But we don't stop there — we make sure your visitors convert into leads.

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