PPC is often viewed as the fastest marketing channel for increasing sales and profit. With paid ads, you can generate traffic from day one, increasing visibility and brand awareness from the first campaign. But it takes months of careful planning, campaign management and optimisation to build a truly profitable PPC strategy.
Let me show you how we’ve optimised one Google Ads account over an 8-month period to create a long-term, profitable advertising strategy for our client. I can’t share the name of the customer, but this case study demonstrates how experiments and refinements during the early stages of campaign management lead to higher returns.
The profit wave of a new PPC account
Because PPC has a reputation for getting results from day one, you might expect your Google Ads account to generate a steady profit every month, starting from month one.
Unfortunately, you’re never going to maximise profitability during the first month. Even if you manage to generate steady profit month-to-month, it’ll be a fraction of what you should be making by month 8+ and your returns will gradually decline as the same keywords become more competitive.
Instead of aiming for profit in the first month, you should spend the first four months investing in long term results. If we track the profit of an effective PPC strategy over the first seven months, you should expect to see a “wave” that looks something like this:
Here, you can see that only one of the first four months returned a profit yet months 5-7 alone generated enough profit to cover the initial investment. More importantly, we’ve invested in building brand awareness during the first four months (and continued to do so) while developing a strategy that will continue to generate high returns for months and years to come.
Here’s a quick preview of what we did for this client during the first eight months:
- Month 1: Build some early search visibility and start collecting data to help us optimise campaign performance.
- Month 2: Refine keyword choices to improve conversion rates.
- Month 3: Expand the keyword list to increase search visibility and opportunities.
- Month 4: Increase budget to bring more traffic to the website.
- Month 5: Prioritise top-selling products to increase campaign profitability.
- Month 6: Optimise Quality Scores to lower the cost of campaigns and win higher ad positions.
- Month 7: Introduce remarketing campaigns to chase up lost leads.
- Month 8: Optimise the website to increase conversion rates.
During the first three months, we focus on building search visibility and positioning our client to take advantage of every opportunity available to them. Then, over the following five months, we optimise the account to generate more leads, increase conversion rates and prioritise the most profitable campaigns.
Month 1: Get some visibility and some data
Optimisation of a PPC account is impossible if you have no data to lead you. As we were working on a site with hundreds of products our first priority was to start sending relevant traffic to the product pages to gather information on search volumes and potential for expansion.
With this is mind, our primary goal was to increase visibility.
At this stage of the process we have yet to receive an indication of which products sell the best and which areas will produce the highest return on investment. As a result of this, the campaigns produced a loss.
If we were working on the assumption that PPC should be providing us with instant wins, at this point it would be time to panic. But we have actually achieved exactly what was needed from the first month of a campaign: visibility and data.
Month 2: Refine keyword choices to improve conversion rate
Now that we had enough data to optimise campaigns, we were able to refine keyword quality and reduce the amount of wasted spend with negative keywords, which stop your ads from showing for irrelevant (but related) search queries – “wedding photography courses” when you’re promoting wedding photography services.
By this point, we also had enough data to prioritise the budget more effectively, allocating a larger proportion of spend to products that we knew would generate a higher return.
By refining the keywords, we reduced the number of impressions and clicks, but the increase in traffic quality meant that conversion rate and profit both increased. This means you’re spending less on traffic, but generating more profit through a higher conversion rate.
Month 3: Expanding the keyword list
Having returned a profit in month two, we wanted to push the campaigns further to drive more clicks and increase revenue. To do this we expanded our keyword list to bring in traffic from other untapped areas. We knew this would increase clicks and were aware that in the short term there was a chance profit might take a small dip as we established which of the new keywords were capable of driving high-quality traffic.
At month three we’re still in the data-gathering stage so a drop in profit is not something of concern. Month two has shown that we’re on the right path and, now, we’re increasing spend to open up wider opportunities, which we can take advantage of through months 5-8.
Our keyword expansion resulted in a 15% increase in clicks but – as we predicted – a 160% decrease in profit.
Month 4: Increase budget to bring more clicks to the site
In the first three months of the campaign, we established that certain channels were performing well and had a large amount of data on which keywords were working. What had become apparent was that the ads were only running for a small amount of time each day due to the limited budget, so whilst we had optimised the campaigns according to the data we had gathered, this data set was very small, and we would perhaps see different results if the ads were running for longer.
With this in mind, we decided to increase the budget and bring more clicks to the site. Although there was a 68% increase in revenue this was not enough to outweigh the increase in cost and the campaigns returned a loss. Crucially, we were now confident that we were gathering a much broader range of data and could more effectively optimise the campaign moving forward.
Month 5: Focusing on top selling products
Five months in and, with a much larger amount of information available to us, we were now able to prioritise the products that were generating the highest return for the customer, whilst using shopping campaigns to promote the remaining products on site.
We created a new campaign that was focused purely on the site’s 15 top-selling products and allocated a higher amount of the monthly spend to ensure maximum visibility. The result of this change was a huge increase in profitability.
Month 6: Boosting Quality Scores
With our client’s budget prioritising top-selling products, we turned our attention to optimising the Quality Score of campaigns. In Google Ads, higher Quality Scores can reduce the amount you need to spend on keywords to show your ads in the top positions, allowing you to beat competitors in the auction, even if they bid higher than you.
If you want to maximise the profitability of your Google Ads strategy, Quality Scores are a priority (and all of the major PPC networks have an equivalent to Quality Scores).
Google calculates Quality Scores primarily on the following three components:
- Expected click-through rate (CTR): The likelihood that your ad will be clicked when shown.
- Ad relevance: How closely your ad matches the intent behind a user’s search.
- Landing page experience: How relevant and useful your landing page is to people who click your ad.
To increase CTR and ad relevance, we use responsive search ads to test multiple variations of headlines and descriptions, allowing Google to find the best combinations with its machine learning technology. This increases the relevance of ads to user search queries and, as a result, increases click-through rates.
Next, we have to optimise the landing page experience to keep users on the page and incentivise conversions.
Hoping to gain further insight into how users were navigating the site we also implemented event tracking to a number of the help tools available – such as a cost calculator.
To increase conversion rates, we also changed the way this tool worked. Instead of giving the user a final price and an option to exit, it would give them an option to add items to their cart or proceed to checkout.
The result of these changes was an 11% increase in CTR and a 130% increase in profit (the highest profit month on record).
Month 7: Chase lost leads with remarketing campaigns
Following two very successful months, we were confident the campaigns were moving in the right direction. We further explored avenues that would increase brand awareness and help drive more conversions.
Over the course of the campaign we had highlighted that users visited the site on multiple occasions before making a purchase. We needed to take steps to reduce the time lag between first visit and conversion by introducing the first remarketing campaign.
This remarketing campaign was split into different audiences:
- All visitors: This would be our overall brand awareness ad group and would be purely focused on creating a stronger brand presence and bringing users back to the site sooner.
- Product audiences: These ads would be aimed at specific products with a high return on investment.
The impact of the remarketing campaign was huge with a 276% increase in impressions and a 24% increase in profit.
Month 8: Website optimisation
As we approached the eighth month working on the campaign, all of our focus had been on account optimisation. Now that we were confident with the account performance, it was time to look at conversion rate optimisation on our client’s website.
Our data showed the checkout page on the website was converting at only 5% so we set about improving this.
The checkout page was very bare so our first step was to make the page more user-friendly and add more trust signals to ease any purchase anxiety users may have during the final stages of the purchase.
We added Trustpilot reviews and a secure checkout widget to build confidence and added a basket summary option to provide users with more information about their purchase. We also removed unnecessary form fields wherever possible to reduce friction and minimise the user input required to complete purchases.
The result of this was:
• Conversion rate up 91%
• Cost per conversion down 56%
• Revenue up 192%
• Transactions up 350%
The checkout page saw a reduction in bounce rate of 38% and an increase in page value of 113%. Overall, checkout page conversion rates increased by 56% resulting in another substantial gain in profit.
From early investment to big profit in just 8 months
Over the course of eight months. We took our client’s Google Ads account from the early investment stage to big profits. Sure, we could have targeted profit in the first few months of running the account but this wouldn’t have achieved the high gains of months 7-8.
Throughout the course of the campaign it was really important to monitor how PPC was performing as a part of the overall marketing mix.
The time lag from first visit to purchase was around 12 days and 8 visits, so it was vital that any decision we made to improve the PPC campaigns wouldn’t have a negative impact on overall revenue.
We kept a close eye on the number of assisted conversions to ensure all decisions were made in the interests of the company. By focusing on how we were contributing to the bigger picture, we were able to increase PPC revenue by 440% and increase overall site revenue by 152%.
By investing in search visibility during the first few months, we raise the bar of success with higher profit margins and set our clients up for long-term, sustained success.
This article was written for Business 2 Community by Andy King.
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