Traffic Strategy - PPC
Posted: Apr 04 2016 / Richard Bairstow / We are Underground
So you’ve built this great site with a brilliant theme and your product range is fantastic. You’ve got your pricing competitive and making a good margin whenever you complete a sale. Your fulfilment process is smooth, and your customer services are just itching for a problem they can solve well and delight the customer.
Now if your shop were sitting on the main street in a busy town, you could expect lots of customers all day long. But imagine your store is actually sitting in a small field in the middle of a vast city and surrounded by a high wall that nobody can see over. Well, that’s today’s internet! Millions of people are just a few yards away, walking around the wall and looking at other shops they can see.
If only they knew your store was there, then they’d be jumping over the wall to visit you! It’s a common myth in e-commerce that - ‘if you build it they will come’. In fact ‘they’ may need some help to find your store – especially in the early days until you build up a customer base.
Let’s assume that you don’t have a massive TV advertising budget but you still want lots of people looking. So how can you achieve this? Well, there are many ways and in previous articles, we’ve mentioned the need to be persistent. Fresh, relevant and engaging content are always the bedrock of a site that will bring people in - but on its own it will be a slow burn. So let’s look at strategies for getting some quick wins. You’ll probably use a whole mix of methods, and none is mutually exclusive.
In this article we’ll look at the pros and cons of PPC to build traffic and in future weeks we’ll consider Affiliate Platforms, PR, Social, “Papping” and then we’ll be cover Display Advertising and Partnerships. PPC (Pay Per Click) is the term applied to some search engines to display your advertisement on their search page, and it’s usually heavily disguised as a natural link.
These days PPC solutions are very sophisticated and have multiple options covering budget, geography, time of day, and frequency of serving your ads. PPC is a real science but you can still manage the campaigns yourselves, and there is loads of information out there that will explain how to make them as efficient as possible. There are also plenty of digital agencies who will run your campaigns for you if you wish and charge a percentage of your spend.
But how effective is this form of promotion? A good conversion rate (completed transaction) from a click through to your site would be 2.5%. The cost per click can vary wildly from a few cents to several dollars depending on the competitive market and the search terms used. However, PPC does not tend to work well in the long run with low-value products in competitive markets.
If your average order is less than $20 in a reasonably competitive market, then it's unlikely the economics will work because with an order say every 40 paid clicks your costs will probably exceed your profit. However, if you are confident that using PPC to bring in a new customer who will continue to order regularly afterwards once they have your site details – so that next time they won’t need to go through a paid click, then the strategy can work well. You just have to allocate the budget, stick to your guns and keep monitoring and tweaking the campaigns until you get the most efficient results for your money.
Bear in mind that once you’ve signed over your credit card details and set your daily budget, it will always be spent in full by the search engine. Let’s face it, in the Western World, Google account for around two-thirds of all searches and as you would expect, their PPC rates reflect that. If you are using this strategy to build a recurring client base then much will depend on the frequency that your customers need your products. If they are going to be ordering every month, then it may only be a few months before you can reduce your PPC budget but if it’s an impulse purchase, then it may take longer to build that natural base.
So here are a few suggestions for ‘dos’ and ‘don'ts' when using PPC for the first time:
Don’t go into PPC without fully understanding your metrics. Make sure you know the economics in advance and work backwards from the margin on each order to determine your likely spend and conversion rate.
Do use PPC in the early days of your store if you are confident that you can build recurring revenue and eventually pay for the spend through the same customers coming to the site directly.
Do monitor you campaigns daily in the early days and make changes to test the effectiveness of each search term and parameter. Don’t rely on the security systems of the PPC providers to weed out the fraudulent clicks from competitors trying to use up your budget.
Do invest in a fraudulent click detection system that will help discourage them and enable you to claim credits from the search engines. If you are a charity or your products are being sold for real causes then do investigate the grants offered by Google and other search engines for PPC spend.