Everybody needs a purpose. What is our purpose as PPCers?
In the PPC world there are so many great tools and resources at our disposal. If we are not careful, we will get caught up in the means and forget the end we are working towards. It is very important to prioritize correctly and avoid getting lost in a sea of less-than-effective tasks.
Here’s an example: One of your accounts has a higher than desirable CPA. You dive in, employing all available resources to bring it down – scripts, bid management tools, rigorous landing page testing, competitive research tools, et cetera. Soon you are running ragged.
In this case our goal (or end) was achieving a lower CPA. Our means were many tools and resources. Let’s say we achieved that goal. Now what? We would probably move on to the next goal – account expansion, increased automation, et cetera et cetera.
These can all be worthy goals for a PPCer. However, it’s easy to forget that these goals fall under a simpler, broader and more important goal.
Profitability. Say it with me. Profitability. Achieving the highest possible level of profitability in an account is your purpose as a PPCer. The sweet spot between the highest possible volume and the lowest possible CPA is the bull’s eye. Look:
PPC Profit = (leads*profit per lead) – (leads*CPA)
So as leads get higher, profit gets higher. AND lower. What?
Good, Better, & Best
Everything you could do right as a PPCer comes down to maximizing profitability. A lower CPA may increase profitability. It may not in cases where a lower CPA decreases volume and profit overall. Expanding an account may increase profitability. It may not when new traffic is significantly more expensive than existing traffic. Start with the right goal and keep in mind that these other variables interact with one another underneath it.
When we center everything we do on maximizing profitability we prioritize effectively, manage our time correctly and achieve secondary goals along the way.
What if your client has other priorities, or doesn’t understand the interaction of volume, CPA and profit? The customer is always right? Wrong! Sometimes your clients are wrong. Make suggestions. Bring things to their attention that could increase profitability, even if they have other priorities. You are the PPCer. Your primary (sole) objective is getting the highest possible return.
Back to our equation, with an example:
We worked on an account where the CPA target was around $10. As time went on, the client asked us to increase volume even if it meant a higher CPA. The acceptable CPA target then became about $12-$15. Here were the numbers in March:
After some work ramping up volume we had these numbers for May:
PPC Profit in March = (20664*profit per lead) – (20664*8.98)
PPC Profit in May = (21954*profit per lead) – (21954*12.44)
So we did achieve an increase in volume, but our CPA and spend also went up substantially. Did profit increase? That depends on what the actual profit per lead is, which our client would not tell us. I wondered if they even knew what their profit per acquisition was! Sometimes clients are wrong! All they wanted was more volume without taking into account the interaction of all the other variables involved.
Profitability. Preach it.