It’s a shocking fact that business owners commonly waste 25% of their pay per click ad spend on simple managerial and strategic advertising errors. But even worse, we’ve found they could easily save 60% more while still getting more customers and sales.
Many business owners wonder how they can do to cut costs and up there ROI and still have the advantages of networks like Google and Facebook.
First, we found there exists several reasons causing the losses business owners often don’t realize which includes:
- Poorly written ads
- Technically incomplete ads
- Poor targeting
- Poor landing pages
- Poor follow up
- Poor testing
“I’ve often seen small business owners who are not educated in this area [online advertising], spend a couple thousand dollars a month and have nothing to show for it. Why? Because they didn’t test on a daily basis. This is what’s so great about digital marketing: it’s a real-time engagement where you can change messages on the fly on the online advertising portals. You can change the landing pages. You can change the call to action. You can see immediate upticks in click-throughs, and immediate upticks in sales conversions, and measuring keywords that are working and ones that aren’t, as an example. Once they start testing, they can get into that sweet zone, where they dial in on an ideal cost per lead and ideal cost per sale.”
— Ken Braun, Lounge Lizard
In most cases, we’ve found it is a combination of all the above, which causes double the cost per click, and customers leaving your site almost as soon as they land there. Combine this with the fact that 97% will never see or click your ad again, thus never see your website again, and you see the problem clearly.
The worst part is, you, the business, don’t even know what’s happening. Many blindly spend more each month only because they have been told they should, and typically it’s not the business owners fault.
The Economic Problem of PPC
Without even considering the 6 items above causing losses, just the economics of the click may be killing your online advertising budget and ROI.
It’s a fact, the costs of clicks have steadily risen since December of 1999 when Google joined the pay per click game and turned it into big business. In those days, penny clicks, five cent clicks etc., were easy to come by.
Not so much anymore.
Though Wordstream reports the average cost per click on the Google search network to be between $1 to $2, the reality of what most experience seems to be much different. For example, the most expensive click on 2016 was for the term “best mesothelioma lawyer“ coming in at $935.71, as reported by Search Engine Land.
For many retail industries, services, and financial providers the clicks run from $20 to $80 each. Here’s some examples as reported by Wordstream in December 2016:
- Insurance – $54.91
- Loans – $44.28
- Mortgage – $47.12
- Attorney – $47.07
- Credit – $36.06
- Lawyer – $42.51
- Donate – $42.02
- Degree – $40.61
- Hosting – $31.91
- Claim – $45.51
- Conference call – $42.05
- Trading – $33.19
- Software – $35.29
- Recovery – $42.03
- Transfer – $29.86
- Gas/Electricity – $54.62
- Classes – $35.04
- Rehab – $33.59
- Treatment – $37.18
- Cord blood – $27.80
Yes, it’s true you can lower these costs using what is known as a “long tail keyword.” A long tail keyword is a keyword phrase of typically 3 or more words. An example might by, “how to hire a trial lawyer.”
This phrase would be much cheaper than just the term “trial lawyer.” The problem with the first version is, it’s typically someone looking to hire the lawyer sometime in the future, and not ready to buy when they click your text ad in the search results.
Regardless, the costs bite into your ROI in a bigger way than most imagine. You obviously see the cost of an agency managing all of this is not included in what I’ve discussed. Having someone manage your PPC costs more than just the click for obvious reasons.
The Hidden Factor Preventing You From 10X’ing Your PPC ROI
One of the biggest drawbacks of PPC advertising is the text ad in search cannot be followed up on. Remember, 97% won’t see or click your ad again, meaing they won’t go back to your website.
Once a person clicks your ad, then views your page and leaves, you must hope they click again when and if they do the search again. It is truly a game of chance. For many keywords, this is a very expensive game.
While effective ads with solid keyword choices can overcome these costs (which is why businesses do PPC), most hit a ceiling in ROI that seems to be getting lower and lower all the time, regardless of how good you are or your agency.
Long-time digital ad folks may rebut that re-targeting fixes that. To some degree, this is true. But it does not fix PPC because you cannot retarget the text ad in the search network. You must pass the ad to a display ad network for further re-targeting.
Re-targeting, to keep things simple, is:
- A person views your ad
- A pixel is “dropped” in that person browser to label them as seeing your ad
- This enable your display ads to continuously display to the person originally viewing your ad, on any website they visit that shows display or banner ads.
- The length of time the your ad “follows” them depends on programming and whether or not your viewer cleans their browser of cookies and such.
Without the display ad network, you have no chance at follow up ads or re-targeting, as it’s called.
But there’s a cost to get in the display ad networks.
The Cost of Display Ads (Banner Ads)
One thing you may already know is the cost of views of display ads is generally much cheaper than costs per click in search networks. These ads commonly are sold by the cost per thousand (CPM) method and the typical costs are from $2.80 to $5.00 per thousand views, but can be significantly higher depending on the quality of placements you purchase, and your experience doing so.
This is great, but there are other costs that tend to stop small and medium business from pursuing long-term display advertising. It’s the cost of creating the display or banner creatives.
Again, it’s true that one banner isn’t all that expensive. But the fact of banner ads is it takes from 16 to 23 display ad sizes to ensure you have full coverage on all networks. The cost of a full set of display ad banners of quality design from an ad firm can run from $300 to $1,000 per set.
You may also have heard of the phenomenon of “banner blindness.”
…a phenomenon in web usability where visitors to a website consciously or subconsciously ignore banner-like information, which can also be called ad blindness or banner noise.
The term “banner blindness” was coined by Benway and Lane as a result of website usability tests where a majority of the test subjects either consciously or unconsciously ignored information that was presented in banners.
Limiting the effects of banner blindness is a simple concept, but can be costly, because it requires you to have multiple sets of display banners to rotate periodically. Then you need to do this over time.
Add in the cost of replacing failing ads, and adjusting the banners for higher click-through rates (CTR) can take your ad cost, without a single view, to over $3,000 on a cheap day.
Despite this somewhat negative feeling you get about display ads, they work when done right, with a tested strategy. The proof of this is that in 2016, the total ad-spend by companies advertising online using display ads surpassed that of search ads.
Display online advertising is the fastest growing form of online advertising today.
Re-targeting Your Potential Lead
Ad re-targeting is a technical thing, but relatively simple to accomplish. It is how you follow up with your viewer so seeing your ad repeatedly is not by chance.
You likely already know you need to get your offer in front of a targeted prospect as much as 13 times to have the highest probability of sale. One or two times simply won’t do the job.
However, you must be able accomplish this repeated advertising for much longer than most think. The reason is, many of your potential buyers are in a research mode, and may not be ready to buy for weeks, or even up to 6 months from the day they first see your offer.
The Fix to 10X Your Results While Lowering Costs
As a strategic marketing agency focusing on small and medium business having massive success, we’ve spent a lot of time, research and money finding solutions for business owners to dominate their markets online.
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