What is the best way to spend money on PPC/SEM?

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Dec 22, 2017
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#1
There are drastically different benchmarks between internet marketing focused on branding vs. internet marketing focused on sales. There are also other categories as well.

Since your question did not really specify benchmarks in terms of branding or other categories I will focus my answer on benchmarks in terms of internet marketing for the sale of products and/or services.

First off, I can tell you I am a Certified Google Partner as well as a Bing Accredited Professional. Although advertising certifications don't exist for social media platforms I have also done a good deal of marketing at places like, Facebook, Twitter, LinkedIn, YouTube, VK, Foursquare, etc.

Being totally real... I can tell you I don't have all the answers nor am I the world's foremost and unquestionable expert. For whatever it's worth I have spent countless hours staring at an MCC dashboard, dealing with campaigns and of course handling clients.

After all that I've been through rest assured I am well aware of the "lingo" of the industry when it comes to terms like quality score, click through rate, cost per impression, cost per click, etc.

But frankly, all that lingo exists more amongst campaign managers than it does real world business clients and since the clients pay the bills there is a great deal of weight on what "they" typically consider to be the benchmarks that matter.

This cuts to the chase and weeds out all those piles of industry lingo words rather quickly and what you're left with is ROI. A business client will care about the Return On Investment (ROI) benchmark. The next point is that we could say there are sub-benchmarks that lead up to the Grand Daddy benchmark of ROI.

Consider it mathematically from the business owners perspective:

  • X= How many sales did this marketing push generate?
  • AND SUBSEQUENTLY.......
  • Y= How much net profit did those sales generate?


  • Z= How much did the marketing push cost?


If Y is > Z your client is happy and you probably get more work
If Y is < Z you're in trouble and can expect to lose this client

The more that Y is bigger than Z the better things will go
The more that Y is smaller than Z the worse things will go

Benchmark this. If the advertising spend does not produce a return on the investment it's negative energy. If the advertising spend does produce a return on the investment it's positive energy. This will apply regardless of the campaign type as in pay per click, social media, email blast, etc. The marketing effort pays off or it doesn't... you know like a pass or fail grade so to speak.

Because of this dynamic I try to prequalify each client. If you have a client with a low net profit dollar amount per transaction things are more difficult to ROI. Case in point let's say you client sells a $12 t-shirt with $4.00 net profit. This gives you very few dollars for the ad spend before you will be spending more on the ads than what the net profit is.

On the other hand things get much easier with a high dollar amount net profit per transaction. Case in point let's say your client sells a $400,000 bulldozer with a $35,000 net profit. In this instance you can spend a lot on ads without gouging too deeply into the net profit number.

In situations I haven't clearly outlined above mostly the same rules still apply. An example might be a client doing an email blast to get people to sign up for a newsletter -or- maybe an email blast to get existing clients to extend contractual commitments. In cases like these everything above still applies with the difference being the client will have to provide a dollar value for each email signup -or- contract extension so campaign ROI can be properly calculated.

Best of luck to you in keeping your ad spend will below the marketing generated net profits! :)

- Mark Guertin
 

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