By Cody Tucker in Entrepreneurship — Aug 6, 2021

How to Create Profitable PPC Campaigns

In this post, we show you how to create profitable PPC campaigns. How to plan, build and optimize PPC campaigns. Starting with forecasting CPA and ending with optimizing best practices.

Search engine marketing, commonly called PPC advertising or simply pay-per-click (PPC), can be a great solution for advertisers.

If you are looking to target very specific groups of people who may have an interest in your product or service, then PPC is the way to go.

A few reasons you might want to manage PPC in-house, One is cost, on average contractors charge $101-$200 per hour to manage PPC.

Another reason should be educating yourself on what goes into creating PPC Campaigns. Even if you go with an outside agency, you should at least understand the basics.

PPC is different than traditional advertising, the old ways show your ads to everyone and only a small part is your target audience.

With PPC advertising, Google and other search engines will display your ads based on relevant keywords that potential customers use when searching online.

This allows you to reach only the people searching for products or services you offer. With search engines like Bing and Google, you can manage your campaign with ease by setting up precise parameters around targeting criteria such as location, age range, gender, and so forth.

As a professional PPC campaign management company, TMV Social has been running successful campaigns since 2015.

Our goal with this guide is to help small businesses create profitable PPC campaigns. There is a lot to unpack, feel free to drop a comment with any questions or if anything should be more clear.

Forecast CPA to Calculate PPC Budget

The first thing you should do when setting up your PPC campaign is to determine a budget. Because all keywords are not created equal, it's important to set aside an amount of money that reflects your ability to compete for certain terms.

Sorry for all the acronyms btw... CPA or cost per acquisition is the amount you pay to get one customer. It's really important with PPC advertising if you want to start profitable.

A quick and somewhat "dirty" way how to forecast CPA is to start from 1 sale and work backward through each conversion step. Forecast average conversion rates for each action in your sales funnel to get an approximate CPA.

"Dirty" because it is a rough guess, but this will help greatly when planning your campaign.

Business to Business can be pretty complicated with all the steps but check out the graphic below.

A B2B Funnel may look like this. Clicks x Average Cost Per Click = CPA

A B2C Funnel is a little easier, but the formula is the same. Clicks x Average Cost Per Click = CPA

Now you have a great starting point for how to plan the rest of your PPC budget. You can compare the CPA to LTV (Life Time Value) to make sure you have a profitable plan.

We try to plan for a 15% higher CPA when starting. Your cost could be at least 15% higher than your plan until the conversion tracking gets up to full speed.

As a rule, “Full Speed” would mean the time it takes for the first conversion to leave the conversion window you set when setting up conversion tracking. (30/60/90 days)

90 days means better data in the long run. B2B can also have a long sales cycle, you may capture your form fill but not the won deal in 30 days.

Identify PPC Target Audiences

The second step that many advertisers skip in creating a successful Pay Per Click (PPC) campaign is to determine the target audience for your advertisements. This will help you decide which keywords to bid on and come up with a specific strategy that will bring results.

Many searches will match your keywords but won’t match your PPC objectives. The goal here is to match the objective intent to the search intent. This means, that if your objective is sales, your audience search intent should be sales.

Example: an insurance agency that wants to sell employer insurance plans.

A broad match to “employer insurance plans” would match “employer insurance plans too expensive.”

Knowing your audience will eliminate wasted spending. You can create a negative keyword list for searches that don’t fit your audience. Also, Google has premade market segments you can adjust your bid or target. Take a look at the audience section to learn more.

Find the Right PPC Keywords

PPC keywords are the most important part of any successful PPC campaign. They determine your budget and therefore how much you spend on your advertising.

Many business owners fail to factor in search volumes when choosing keywords, instead opting for terms that they think will be popular with their audience. While this may seem like a good idea at first glance, there’s no guarantee that these particular terms will bring traffic to your site.

Look for keywords that have a good mix of high search volume and low competition. A great place to start is researching your competition and bidding on some of their best organic keywords. Export the keywords from SEMRush or Spyfu and throw them into the Google Ads Keyword Planner.

The Google Ads Keyword Planner is a tool that allows you to find long-tail keywords. This tool helps you be more efficient with your money by showing us exactly what terms people are searching for to help create the most effective PPC.

Structure Ad Groups into Keyword Themes

The more targeted your ads are, the better the conversion rate you will get. To make sure that happens, it's important to have themes of keywords and phrases in each ad group so we can accurately target each specific audience.

Ad Groups are a way to segment your ad campaigns and assign different budgets, bids, and targeting settings. They also help you organize your keyword groups to see the performance of each group separately.

A proper ad group structure should be created with keyword themes in mind. Meaning each ad group should contain and target specific “mindsets” of the customer or user. You target “mindsets” by guessing the keywords a customer would search for when they are ready to complete an action.

For example, what intent do you think the user has with this search? “digital marketing agencies in Nebraska” Did you guess mild researching? I think so too, how about, “Phone number TMV Social?” Little better, looks like they’re wanting to make a phone call. The theme of that ad group would be branded/phone calls.

Now it doesn’t always make sense to do branded campaigns (Your company name in the keywords) because you are probably showing up organically for the same searches. But the example applies to all intent, the idea is you create ad groups with the customer in mind, and this helps with the next step of creating ads.

Create Ads that are Relevant, Compelling, and Persuasive

Insurance is one of the most competitive markets right behind family law. Each click could cost upwards of $30-$50. So if you need a little inspiration, check out what they mention in their ads.

Now you have the most valuable keywords for your product/services, you separated them into themes and intent groups, and all you have left is to make ads that speak to your potential customers.

This can be a little daunting and can be harder than it sounds, but don’t worry there is an easy approach.

Start with 1 Expanded Text ad, matching each ad group's intent and keyword themes. Then add 1 responsive ad per ad group. Just match what the customer expects when completing the search.

Copywriting doesn’t come naturally to everyone, thankfully the data will help you make the right decisions after your ads go live.

You should also take a look at what other advertisers are doing for your keywords. Directly copying won’t help, but seeing what other advertisers think is important will help you create great ads. Keep an open mind also, you might find an angle they didn’t think about.

With tools like spyfu.com and semrush.com, you can research your competition to see what ads they are running.

Set Up Conversion Tracking

You 100% need conversion tracking, even if you’re using a bidding method that doesn’t need conversion data. Having conversion tracking will allow you to see which keywords and ads are generating sales and leads.

The easiest way to set up conversion tracking is with Google Analytics. Create the conversions you want to track in Goals and connect Google Analytics to Google Ads to import goals as conversions.

This does force you to use the last click method of tracking conversions, but it’s good enough for a simple contact form.

BONUS: Optimizing your PPC Campaign

Make sure your site loads quickly and has no technical errors.

If you're an advertiser, then you should know the importance of having a site that loads quickly and has no technical errors.

If your website takes more than five seconds to load or contains any error messages, then you are losing up to 7% of visitors who will not come back again.

To ensure that your site meets these standards, advertisers need to be aware of what is going on in their CMS (content management system) and make changes as necessary.

For example, they should check for broken links on their pages and update all plugins if there have been updates made since installation.

Track PPC ROI

This guide on How to Create Profitable PPC Campaigns wouldn't do much good if you're not able to track profits. Google Ads does have the functionality to show your ROAS (return on ad spend) but you need to send sales data back to Google Ads.

How can you tell if your paid search strategy is working? You may have great click-through rates, but what about conversions? How much are you spending for each lead or sale? These are all important questions to be asked before investing in a new campaign.

To calculate ROI, divide the total revenue by the total cost for that period. For example, if you spend $500 and get 10 sales ($1M), then your ROI would be 100%. If you spent $100 and got two sales ($200), then your ROI would be 50%.

Test Different CPC Bids for Each Keyword

If you're advertising on Google Ads, then you know that the cost-per-click (CPC) bid is how much it costs to show your ad for every click.

The CPC bid varies depending on who clicks – a higher bid will yield more expensive customers while lower bids may attract less desirable ones. But what if there was an easier way?

If you're not happy with your current cost-per-click (CPC) bid, it's time to do some research. The difference between a $5 and a $10 CPC bid can be huge!

If you've been running the same campaign for weeks or months now, it's time to try something new. Clone and change the bid type on a few of your most expensive keywords to see if something works better for you.

Optimize the Landing Page Content

In the digital marketing world, landing pages are a crucial component of an advertising campaign. Landing page optimization is vital to get right because if you don't do it correctly, your campaign can be wasted and not produce any results.

The landing page’s content should focus on two main things: a compelling copy that will draw in readers and persuasive videos or images to keep them interested.

A poorly optimized landing page will have too much text, making it difficult for visitors to find what they're looking for. It may also lack persuasive visuals that convey a clear message about the product being advertised.

The goal of your landing page is to convert viewers into customers by providing exactly what they want when they click on your ad - whether this is a purchase or lead form fill.