3 reasons ppc ads are key to long-term success

I’m often told by old-school marketers that pay-per-click (PPC) advertising is the faucet that can and should be turned on and off. Use it to generate sales in the short term, they say, while using SEO and social media to deliver continuous, long-term results. I disagree.

PPC has a halo effect, positively influencing brand growth and customer loyalty online and off.

I’ll demonstrate the three primary factors contributing to the long-term success of digital advertising campaigns, and then show how we can measure those positive effects.

Brand Growth and the Buying Cycle

Each time a potential customer is exposed to a brand, the likelihood that they will purchase from that brand increases (basic advertising, I know). Don’t forget that the amount of touch points it takes to actually trigger a sale is going to differ by person, industry, and product. Understanding the value of each touch point is the first step in measuring the full impact of the totality of your PPC campaigns.

Since a PPC ad is likely one of many touch points before a purchase is made, it is likely that the volume of transactions and revenue influenced by your PPC campaign is being severely under reported if we are only looking at last-touch attribution.

Customer Loyalty

There is a reason that your cell phone starts to slow down months before your two-year contract ends, and you have no choice but to purchase a new phone every two years. This is called Customer Lifetime Value, or CLV.

Nothing is more valuable than the ability to generate repeat business. When quantifying the return on your PPC campaigns, you also must understand the long-term value of a customer. If we only tie revenue back to one purchase, we will never understand the full ROAS (return on ad spend) of a campaign.

Word of Mouth (Referrals)

Any business will tell you that the most effective marketing is word of mouth. For this reason it is essential that you deliver an amazing experience, starting with the search results and ending after the sale. Optimized UX is you get referrals.

The goal here is to get to the point where you can measure the average number of referrals driven by each customer. If you close a sale through PPC and that person tells five friends about the product, then your revenue from that sale might be as much as five times what you thought.

Mind the Gap with Multi-Touch Attribution

One way to see the long term effects of PPC is to measure the difference in revenue between last-click attribution and multi-channel attribution (over a 90-day period). The difference between these two values will give you the revenue generated by users who came to the site through a PPC ad at some point in the conversion funnel, and then returned and purchased through another traffic source (e.g., direct, organic, social, etc.). This data set includes both repeat purchasers and users who needed multiple touch points before making a purchasing decision.

As a test, I ran this analysis for two drastically different companies. Company A is a two-year-old company only at the cusp of getting out of startup mode; company B is a large brand with a longer than 30-year history.

Gap analysis for a 2 year old startup company. Gap analysis for a major brand.

When running this type of analysis, we find that that there is a significant revenue gap between these two attribution methods. What is most interesting is that this gap grows larger and larger each month a campaign runs.

Thus, it can be seen that multi-touch attribution should be an essential part of any digital advertiser’s analysis.

Meet Elizabeth Banks, Archer Roose’s “Uninvited Guest”

Marketing in the Time of Coronavirus

We’re taking team building to a whole new level!

Andy Groller Teaches B2B “Fishing” at MarketingProf’s ABM Online Forum