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How Much Should You Pay for a PPC Lead?


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Pay-per-click (PPC) advertising is an effective way to generate website traffic. PPC is, in fact, the fastest road to garnering relevant search results, especially for highly competitive keywords. But how much should you pay?

And how much are your competitors paying? Great questions but there is no short answer.

For more information, contact Rosemary Brisco, ToTheWeb |

Published in: Marketing
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How Much Should You Pay for a PPC Lead?

  1. 1. $25$250 $50 $10 Pay-per-click Leads. What should you pay?
  2. 2. Pay-for-click advertising is the fastest way to generate leads for highly competitive keywords PPC Leads 2
  3. 3. What should you pay for a PPC lead? Good, common and tough question. And there are no easy answers. PPC Leads 3 $25$125
  4. 4. No benchmark exists for the cost of a lead • No standard PPC conversion rate or cost • Advertisers can measure a variety of actions as a conversion further complicating measurement, and • Baseline conversion rates are different for every industry and even across products. PPC Leads 4
  5. 5. What do your competitors pay? • Ad networks don’t divulge competitor data; and • You cannot know what keywords your competitors bid on (despite what shady tool vendors may say). PPC Leads 5
  6. 6. What actions do you want to measure? CPAs vary… • Request for a demo • Lead form completion • Download • Online chat • Video view; and so on… PPC Leads 6
  7. 7. 7 Factors for Calculating CPA
  8. 8. Keyword Mix • May or may not include your brand name (Brand keywords are generally inexpensive); and • Short tail versus long tail keywords impact CPC. PPC Leads 1 8
  9. 9. Ad Networks Conversion costs differ by media platform: • Search • Display Networks; and • Retargeting. PPC Leads 2 9
  10. 10. Geographic Locations Costs differ by country, region and city targeting. PPC Leads 3 10
  11. 11. Offer Types Your campaign landing page 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; and • Weigh CPA against lead value. PPC Leads 4 11
  12. 12. Competitive Campaigns • A common strategy is to bid on searches for the names of your competitors and/or their products; and • A costly CPA strategy, but could deliver very valuable results. PPC Leads 5 12
  13. 13. 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; and • Measured based on the likelihood of a click-through. PPC Leads 6 13
  14. 14. Timing • CPAs fluctuate by seasons • During periods of heavy ad testing; and • Holidays PPC Leads 7 14
  15. 15. 3 Additional Considerations
  16. 16. Length of Sales Cycle • Numerous people may be involved in the decision • Leads can take a long time to surface and qualify; and • A buyer may initially see an ad on a mobile device and convert on the desktop (difficult to attribute to PPC). PPC Leads 1 16
  17. 17. Product Cost Matters • A $10K product vs. a $100K product; and • Expect lower CPAs for lower priced products. PPC Leads 2 17
  18. 18. Lead Actions • Campaigns may have multiple CPAs; and • Values differ by action. PPC Leads 3 18
  19. 19. Run your conversion ratios through the sales funnel. Leads Sales is a Numbers Game 19
  20. 20. PPC Leads PPC is top of the funnel marketing to build awareness and your remarketing list. How many visitors will it take to close one sale? 3,000 600 150 50 10 Visitors coming to the website Lead clicks on ‘Call to Action’ Lead interacts with company Company pre-qualifies lead Sale is closed 20
  21. 21. Technique for formulating lead costs What you need to know to make this calculation. PPC Leads 21 Leads Sales Revenue Generated Paid Media Cost
  22. 22. 420 Sales $270,000 ($99/sale) 1,000 leads $240,000 CPA = $571 ROAS = 12.5% Example Formula 1. How many leads came from paid media last year? 2. How many sales came from paid media last year? 3. How much revenue did those sales generate? 4. How much was the total paid media cost? PPC Leads 22 CPA = Cost Per Action ROAS = Return on Ad Spend
  23. 23. PPC Platforms PPC Leads 23
  24. 24. Convert your visitors into leads We work with B2B companies with lead generation challenges. Our search programs drive visitors to your site – but we don’t stop there – we make sure your visitors convert into leads. CALL 650.627.8800 24
  25. 25. There is no demand without marketing Questions? 650.627.8800
  26. 26. B2B Learning Center | Blog Free B2B Tools + Articles Tap into B2B Resources @ 26 Visit