When Surprisingly Good Performance Leads To Tough Questions About The Value Of PPC

These past few weeks have prompted many firsts for even the most seasoned digital advertisers. Be it challenging questions from clients/bosses, head-scratchers within accounts, new working conditions, etc – our day-to-day PPC activities have been turned upside down. While there is a ton of content on the “do’s and don’ts” of advertising during this pandemic, I haven’t noticed much content around what happens next.

Whether you are spending more, spending less, or not spending at all, you’re likely experiencing some of the following.

• Higher conversion rates across all channels
• Higher purchase intent at all points in the funnel
• Strong Organic growth
• Strong Direct growth
• Lower CPCs
• Higher efficiency metrics (ROAS, ROI, etc)

And the list goes on. Obviously, not every brand is seeing positive trends and are negatively impacted. However, this conversation is geared more towards those cases where steady revenue remains at reduced advertising spend.

As some background, here’s a look at how Shopping Portals and Search Engines have trended over the last 12 months.

Additionally, here is how a few industries have trended specifically in Home & Garden, Off-Road Vehicles, and Vehicle Parts and Accessories.

Search volume overall has remained steady, if not slowly increasing, while some industries appear to trend how we’d expect under normal circumstances. We do notice a universal dip around the middle of March (coinciding with states’ stay at home orders), otherwise, the search volume is there. That coupled with the higher purchase intent (referenced above) has resulted in some of the strong performance I’m addressing.

All that said, I was asked a very good question the other day that could be tough to field depending on where your account is and what performance has looked like the past few weeks. The question was, “How do I go back to spending six figures on PPC when we’ve pulled back and saw a 30% drop in PPC, but a 10% increase across the entire site?” 

Right now we’re in a wave of people buying like crazy – All types of verticals, all types of products, and so on. Whether it’s stimulus checks or online picking up slack on low brick and mortar sales, many ecomm brands are showing strong results. But it will slow down. Below I will discuss a few different questions/themes you’re likely to encounter between now and then and some factors you should be considering. (Keep in mind many of these points can be used interchangeably across the different questions.)

Back to the first question I called out…

How do I go back to spending six figures on PPC when we’ve pulled back and saw a 30% drop in PPC, but a 10% increase across the entire site?

• Diminishing brick and mortar shopping is naturally causing an influx in online sales – Sales that may have otherwise not been there. As quarantines lift, we can anticipate online conversion rates to normalize to what we’ve historically seen.
• Regardless of what you do, at least part of your competitor set will be spending (if they aren’t already), and it will begin to eat away at your impression share. Run some sample searches – What is everyone else doing? Are you losing out on searches you used to own? Are competitors moving in on your brand? Are the Shopping results flooded with sellers that weren’t there before?
• If you are still seeing awesome results, odds are you have a strong brand presence. This is a good thing! However, this model isn’t sustainable. While you may be reaping the rewards of months of hard PPC work right now, you can only coast there for so long. Eventually, you’ll need to re-implement the tried and true strategies of prospecting and awareness building.
• Although you’re seeing great results with reduced PPC budgets, keep in mind that PPC would have undoubtedly performed just as well, if not better in some cases. In fact, there was likely revenue left on the table due to a more conservative approach.
• Just as you should be mindful of if your competitors are spending, you need to also be mindful of if they aren’t spending. In other words, part of your success could be due to them drastically reducing budgets, not being able to fulfill their own orders, etc. Again, something that is temporary.

Organic has really been picking up the slack and performing well – Why do you think we need to be so aggressive with paid?

• This isn’t exclusive to any one account. Brands have been performing above average across the board – However, we need to remember that this will eventually slow down. At that point, we should be prepared to revert to the more tried and true approaches.
• Also, consider your competitors’ SEO efforts. It could be a case where your SEO is noticeably stronger and it’s able to really take off without the friction of PPC.
• Again, what we’re experiencing now is not the new norm and we should anticipate that it could end at any time. If we are not investing in advertising in the future we will only lose ground to those competitors who aggressively ramp back up. For perspective, we’ve already seen many of our clients begin to ramp back up.

How long should we stay completely paused/on reduced budgets?

• Once your employees are back in full swing (i.e. managing inventory, order fulfillment, etc) you should look to return to normal. Clicks are less expensive and purchase intent is high – Take advantage while you can and as it makes sense. Again, we’re seeing most of our clients ramp back up, and again, clicks are cheap right now, but we only expect that to last for another month or two.
• If you are hesitant to resume campaigns given strong performance without PPC, I would at least run incremental tests at reduced budgets (i.e. with certain locations or certain products). The expected result is that you won’t be able to compete with a more aggressive strategy, but that is at least a way to test it.
• Another aspect to consider is testing something that you’ve previously lacked the resources to do. Many brands have unused budgets at this point, so it would behoove you to invest in new content creation like video, or even on a new engine/platform that you’ve never had the budget for.

Obviously, I didn’t cover every single question that will come up and I didn’t consider every single answer for questions called out. However, these will fit, in general, with what most advertisers will soon experience if they haven’t already. These trying times have brought on quite a few changes, but it’s important to remember that many of them aren’t here for the long haul. 

In closing, I’ll leave you with a couple of recommendations. Regardless of if you’re lead gen or ecomm, increasing spend or decreasing spend, there are a couple of things that everyone should be doing right now. One is running constant surveillance of what your competitor set is doing as it will have a larger impact on your PPC strategy than ever before. The other recommendation is to run continuous analysis and forecasting. This pandemic seems to change on a daily basis which means your business can too. Make sure you’re keeping an active pulse and adjusting as necessary.

This marketing news is not the copyright of Scott.Services – please click here to see the original source of this article. Author: Zach Bruner

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