5 Easy Ways to Halve Your PPC Budget

Carrying out digital advertising successfully can be quite a challenge. Optimizing keywords, refining targeting parameters, and crafting compelling ad copy are all demanding tasks. However, other aspects of this process shouldn’t add to the burden.

ppc budget cutting tips

Instead of getting bogged down in unnecessary complexities that only lead to confusion and divert attention from crucial, result-oriented tasks, consider these five efficient PPC strategies. These tips will help you maintain focus on what truly matters, ultimately enhancing your outcomes and reducing unnecessary expenditures from your marketing budget.

1. Project Success (And Failure) Before Diving In

When embarking on a new ad campaign, there’s a common urge to immediately delve into keyword research, analyze competitor metrics, and brainstorm landing page concepts. However, a surprisingly effective “lazy” approach involves postponing any substantial work until absolutely necessary.

By modeling potential success (or failure) before immersing yourself in the actual tasks, you can save significant time during the subsequent phases of in-depth research, analysis, and creative development. This method promotes focus, prioritization, and overall simplicity.

PPC budget Dwight office meme

For instance, begin by gathering fundamental keyword data using your preferred tool. Let’s take “cookie delivery” as an example from SEMrush. (On a side note, doesn’t that sound incredibly tempting right now?!)

PPC budget SEM Rush phrase match report

For now, let’s narrow our focus to the most prevalent and competitive match (the rationale for this will be explained in the following section).

The objective is to formulate a basic, conservative projection of what a SINGLE sale might entail, considering various scenarios involving your effective CPC and conversion rates. You can obtain this data from tools, historical information, or these two excellent benchmark resources:

  • AdWords costs
  • Facebook ads cost At this point, we don’t have a clear understanding of what’s reasonable, and we shouldn’t invest time in figuring it out just yet. Therefore, a simple sensitivity analysis (using expectations within the middle ranges) should suffice as a starting point.
PPC budget CPC conversion rate comparison

You now have a general idea of the number of visits required to generate one sale. So, what will be the cost involved, and what does the ROI on a single sale look like? Excellent questions!

PPC budget ROI of one sale

In just 5 minutes, you’ve essentially determined the target range for your CPC and conversion rates to achieve break-even or generate significant revenue for this specific product.

Our example indicates that we’ll need conversion rates of at least 2% if the CPC falls within the $2.5-$3.5 range.

You’re also beginning to grasp the interconnectedness of these variables. For instance, it’s unclear if lowering the CPC is currently feasible. Therefore, an alternative could be to enhance the gross revenue per conversion through methods like product bundling or increasing customer lifetime value.

Speaking of revenue, let’s consider the potential outcomes when you scale up. What would be a reasonable budget to start small, validate this model, and then expand if the results are promising?

PPC budget ROI of 10 sales

The math is straightforward, requiring about 10 minutes of effort. By pinpointing the specific variables (or levers) that need adjustment and the direction of those adjustments, you can save yourself considerable time and effort in achieving your desired results.

Is this statistically significant? Not at all.

However, you now possess a rough estimate of the target figures and what to look for as you launch a new campaign, enabling you to make adjustments on the go.

An additional advantage is having some ammunition to advocate for giving campaigns more time to self-correct without making hasty decisions and pulling back prematurely.

In short: Modeling in advance helps you demonstrate success on a small scale, minimize losses if things don’t go as planned, and scale up when the time is right.

2. Prioritize Using the 80/20 Rule

Back in 1896, an Italian economist named Vilfredo Pareto was tending to his garden when he stumbled upon a fascinating observation. As he examined his pea pods, he realized that a significant portion of his peas (around 80%) came from a relatively small number (20%) of pods. This distribution pattern reminded him of the wealth distribution in his own country, Italy, where a small percentage of the population held the majority of the land. (Okay, I admit, I wasn’t actually there in 1896, so the cool air and winter draft are purely fictional.)

Since then, the 80/20 analysis, also known as the Pareto Principle, has been applied to various fields to explain the often disproportionate relationship between inputs and outputs.

And guess what? Your PPC campaigns are likely a goldmine for the 80/20 rule too. Here’s why:

Intelligent individuals tend to over-intellectualize. While this is generally a positive attribute, it can sometimes lead to investing excessive time and energy in tasks that don’t necessarily require it.

By examining your account for 80/20 patterns, you can identify and avoid activities that are excessive and might consume an entire hour of your time. The good news is that spotting these patterns should be relatively easy – no complex analysis required (or even permitted at this stage).

For instance, begin by focusing on the usual suspects:

  • Top-performing keywords (considering both volume and intent)
  • Most effective ad ’templates’ (which can be expanded upon)
  • Targeting parameters (e.g., location, time of day)
  • Devices (some campaigns might benefit from mobile intent while others won’t)

Identify the 20% of factors that are driving 80% of your results, and concentrate all your limited resources on those areas.

Chances are, you’re dedicating far too much time to elements that are not yielding significant returns.

PPC budget Donald Trump meme

To illustrate how simple this should be, let’s consider an example. When you open an Ad Group, it might look something like this:

PPC budget ad groups

For now, let’s focus solely on the keywords and disregard the Quality Scores (we’ll delve into those in the next section, I promise!).

This particular ad group was new and unoptimized when we received it from a client. While the results might not be as skewed in your own campaigns, a similar pattern is likely to emerge.

Yes, it’s crucial to continuously introduce new keywords into the mix. However, a large portion of your results will ultimately stem from a select few well-performing ones.

Long before self-proclaimed internet gurus flooded the scene, there was Peter Drucker, a renowned management consultant. Back in 1967 (!), one of his central principles was to focus on strengths rather than fixing weaknesses.

To summarize: Concentrating your efforts on your top performers simplifies your workload, particularly when dealing with constraints related to bandwidth, time, energy, or budget.

3. Boost Results By Optimizing Quality Score

While metrics like Cost per Click (CPC), Cost per Conversion, and Return on Ad Spend (ROAS) are undeniably crucial, they become irrelevant if you haven’t addressed your Quality Score.

Why?

Because everything else hinges on it. Even small improvements in Quality Score can have a significant impact on your campaign’s performance, especially considering that social media platforms are adopting similar measures. For instance, Facebook’s Relevance Score demonstrates that a 1% increase in post engagement can lead to a 5% reduction in ad costs.

You’re probably already aware of this. However, just like in the previous section, it’s worthwhile to delve deeper into what constitutes Quality Score.

For example, comprehending the visitor path is essential for improving your Quality Scores. Generally, it follows a pattern similar to this:

  • Step #1. A visitor initiates a search using a navigational, informational, or transactional query driven by a specific intent (often revealing their customer journey stage).
  • Step #2. They swiftly scan the top three (or four) ad titles and descriptions before shifting their attention to the organic search results.
  • Step #3. If something piques their interest, they instantly form an expectation of what they’ll find upon clicking the ad.
  • Step #4. Upon landing on your page, they make a snap judgment within approximately 17 milliseconds and will bounce back if the page doesn’t meet their initial expectations.

The takeaway here is that effectively optimizing your campaign, ads, and landing pages for specific keywords goes beyond implementing basic best practices found online.

Returning to our previous example, you’ll observe that the underperforming keywords with high costs per conversion also tend to have average to low Quality Scores. Bingo! We’ve struck gold!

PPC budget Quality Scores

Within a few days, we can achieve some quick wins by implementing optimizations along the visitor path:

  1. Segment Ad Groups based on visitor intent (e.g., informational vs. transactional)
  2. Identify your top-performing keywords using testing and tools
  3. Divide the winning keywords into more specific Ad Groups
  4. Create new and unique ads that highlight the original value proposition for the best-performing keywords
  5. Develop new and unique landing pages that align with visitor intent and ad value proposition
  6. … test multiple ad variations
  7. … test multiple landing page variations

It’s a simple approach. But what about the results?

In one instance, new lead conversions skyrocketed by 900%, the conversion rate surged from less than 1% to over 26%, and Cost per Conversion plummeted by a remarkable 99%. And these achievements weren’t due to some secret PPC ninja skills but rather a focus on the fundamentals and leveraging areas with the highest potential for improvement.

PPC budget lead conversion data

In essence: Optimize for relevance, and the rest will naturally fall into place.

4. Boost ‘Macro-Conversions’ by Enhancing ‘Micro-Conversions’ with Remarketing

It’s a harsh reality that a majority of your website traffic will vanish without providing anything valuable in return.

Only a small fraction, typically between 1-10%, will convert into customers, leads, or subscribers. The rest? Gone, never to be seen again.

Knowing this makes it astonishing that remarketing remains an underutilized tactic.

On average, remarketing costs are approximately 46% lower. Plus, it’s a no-brainer to target individuals who have already shown interest in your brand compared to attracting new visitors who are unfamiliar with your business (and more importantly, unaware of why they need your products or services).

Here’s the most compelling part:

It’s highly unlikely that someone will make a purchase on their first visit. In fact, studies show that at least 50% of customer interactions of customer journeys involve multiple touchpoints across various channels.

This means potential customers will engage with your brand and visit your website at different stages of their buying journey. Consequently, the most effective way to boost your significant conversions (such as leads and sales) is to focus on improving the “micro” conversions that guide people through each stage of the funnel. Let’s illustrate with an example:

  • Awareness: Utilize content or top-of-funnel promotions to capture attention and generate interest.
  • Consideration: Offer “lead magnets” or other freebies in exchange for initial customer data (e.g., name and email address).
  • Decision: Employ direct purchase or sales-oriented messages.

Are your sales-focused remarketing ads falling short? It’s worth exploring why.

Perhaps the timing isn’t right, or the offer isn’t appealing because the individual isn’t ready to convert. In such cases, consider moving up the sales funnel with a softer approach, such as an ROI calculator.

PPC budget ROI calculator

While it might not be a direct prospect or a perfect solution, it provides an opportunity to nurture a new lead over time and assess the effectiveness of the lower CPC in relation to the eventual ROI.

It goes without saying that ad creative plays a crucial role in Display ads used for remarketing and retargeting. One classic copywriting technique is to draw inspiration from magazine headlines – you know, those glossy publications tucked away in the back of stores. Remember those?!

PPC budget Rolling Stone meme

Alternatively, you can look to online equivalents. Believe it or not, BuzzFeed excels at grabbing attention and enticing clicks. Analyze their headline formulas, captivating descriptions, and visually appealing imagery for inspiration.

PPC budget clickbait example

Remarketing and retargeting can become even more impactful and precise with social advertising options, such as Facebook’s custom audiences. You can target specific users at nearly every stage of the aforementioned funnel with highly relevant messages that compensate for the inherent lack of intent often associated with social media ads. This is particularly effective when combined with Dynamic Product Ads, which we’ll explore later.

Another ingenious tip, courtesy of Massimo at AdEspresso, involves leveraging remarketing to “hack” social sharing. For instance, utilize a server redirect with a “Website Custom Audience Pixel” when sharing external content on social media platforms. When someone clicks on the link and gets redirected to the final content, you can retarget them with your ads based on the specific topic or content.

In short: Remarketing offers one of the simplest and most cost-effective methods for converting more of your website traffic into valuable actions.

5. Automate to Enhance Message Relevance and Timing

Email marketing automation has gained immense popularity because personalized emails have been proven to increase click-through rates by 14% and conversion rates by 10% (Source: Sales Higher).

Furthermore, according to Jupiter Research, sending more relevant emails can result in 18 times higher revenue.

This highlights the well-known adage that the most effective marketing messages are those delivered to the right people at the right time.

While digital ad optimization is still in its early stages, it shows great promise.

Google Shopping Ads (formerly Product Listing Ads) are highly effective because when a user searches for something specific like “red Nike men’s running shoes,” they exhibit strong purchase intent. On the other hand, Facebook’s relatively new Dynamic Product Ads function similarly to remarketing campaigns, targeting users based on their previous website interactions or purchases.

Both approaches are equally effective. But why?

Because 86% of people are increasingly ignoring banner ads, and a growing number are blocking banner ads altogether. (And let’s not forget about Apple’s interest in ad blocking).

PPC budget rise of ad blocking technology

Therefore, for online ads to maintain their effectiveness amidst (a) heightened competition, (b) evolving consumer behavior, and (c) efforts by major companies to block them, they need to excel at:

  • Delivering the right message
  • To the right person
  • At the right time

As demonstrated in other marketing channels, automation is the most effective way to achieve this.

The good news?

Digital ad automation also enables scalability, reducing the time investment required to create numerous variations of keywords/audiences and ads.

Gartner Research estimates that companies utilizing email marketing automation save approximately 15% on creative production. Similarly, by implementing Facebook’s Dynamic Product Ads, The Honest Company (which, by the way, has a fantastic domain name) witnessed a 38% reduction in cost per purchase (along with a 34% increase in click-through rates). Not too shabby!

Both Google Shopping and Facebook’s Dynamic Product Ads leverage your product feed (or catalog) as a central database to power the ads displayed, streamlining the process.

PPC budget Facebook Dynamic Products

Image: Facebook

What’s truly exciting about this era of contextual marketing is that the possibilities for improvement are virtually limitless, all while simplifying your life significantly.

This translates to more time for enjoyable activities, like catching up on old episodes of your favorite shows! Yay!

PPC budget 30 Rock don't vote Republicans count those

For instance, by integrating BOTH Google Shopping and Facebook’s Dynamic Product Ads, you can automate ad delivery based on user behavior, much like how automated emails are triggered. This automation can be based on actions such as:

  • Searching for “blue purses”
  • Browsing blue purses on your website
  • Adding a blue purse to their cart but not completing the purchase
  • Purchasing a blue purse, which then triggers recommendations for a matching black dress (my apologies if my fashion sense is a bit off, but you get the idea).

To put it simply: Implementing digital ad automation techniques can significantly enhance your outcomes, boost sales, and free up your time from tedious and time-consuming tasks.

In Conclusion…

In today’s ever-evolving digital marketing landscape, there’s a constant pressure to do more and more.

However, when resources are limited, the most effective path to profitable growth often involves doing less.

Before diving into any tasks, model potential successes and failures. Continuously apply the 80/20 rule to your campaigns to maintain focus on high-impact areas, such as improving Quality Scores. Utilize remarketing to enhance lead nurturing and “micro-conversions,” ultimately driving the significant conversions that truly matter. And whenever possible, leverage ad automation techniques to streamline your efforts.

Embrace the art of efficiency. Remember, a higher ROI isn’t about more ads; it’s about better ads.

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