Check out Episode 5 of On The Same Landing Page, where Astra Newton takes us through how to manage rising CPC.
On this episode, Astra Newton (Head of Advertising) is asked what Businesses can do to manage rising cost per click in paid search advertising and paid social. Find out some of the tricks of the trade you can use for your ads accounts or speak to us for a review of your PPC accounts…
Jason:
Hello and welcome to On The Same Landing Page Episode 5. We’ll be doing things a little bit differently to normal, where we normally have a guest. We’ve just got Astra, Head of Advertising. As I always am, I’m Jason, the Marketing Manager for Web Presence. I had to read that. And I’m joined, as I said, by Astra.
So we are a web and marketing agency based in Macclesfield who help businesses grow through inbound marketing. A big part of the inbound marketing approach is paid advertising. It’s often the first place we start. I introduced you in and I talked over you. Astra, welcome to episode five.
Astra:
Hi. Nice to be here.
Jason:
So we’re going to tackle the issue of cost per click and how it’s increasing. For almost all industries, the impact that this is likely to have on your ability to generate new business over the next five years. We’ll also touch on how channels who sell the advertising space are helping you with it and what actions you can take to reduce the impact of this inflation of cost
Jason:
per click so that you can keep generating traffic through paid advertising. Talk to me about the problem just just first of all, and just give us an introduction as to maybe where we’ve been and where we are at now in terms of cost per click and across the different channels.
Astra:
So cost per click is a how long is a piece of string kind of cost exercise? You can’t really focus it accurately. But in the early days of Google Ads back like six years ago when the company is running a like manual CPC is like 15 pence a click kind of thing. So if you’ve got a thousand pounds a month, you can get lots of traffic. Over the years, we have seen that start creeping up.
As with everything in life, the price eventually inflates. But we’ve seen a particular increase over since, well, since the Post-Pandemic years, if you want to call them that. But everyone had really good years in different industries in like 2019, 2020, 2021 everyone’s at home on the internet, clicking, buying. So lots of businesses, despite being closed, managed to stay afloat and had a bit more money to spend on marketing in the years after.
And because they expected that they’d get the same levels of traffic, the same cost per click, that kind of thing. So a lot of them have thrown much more budget into their campaigns this year, which in any market as there’s more money and there’s more demand for these keywords is driving the cost up the price that we’re willing to pay.
And because everybody’s doing this on such a large scale in particular industries, that is inflating the cost massively up to sort of like three times we’re seeing. So people looking to grow like year on year, looking back at their figures in 2018, 2019, had really good years are wondering why now even though they’ve got more marketing budget to play with because of the revenue that they’ve generated in those years means they are not getting as much bang for their buck if you like.
Jason:
Right. So that’s they were always going to go up but the digital transformation of the pandemic exacerbated it.
Astra:
Yeah. Basically it’s all to do with just people as more people in the marketplace. Now lots of digital businesses started up in the pandemic, so there’s just more competition out there. So it’s inflated.
Jason:
And then that’s just going to keep going.
Astra:
Potentially, yeah. I mean there’s obviously there’s always a ceiling on this kind of stuff. It could keep going it depends if everybody sort of pulls back. At the moment, everybody’s acting in the same right way, right? Everybody’s putting more money into it and driving that price up. But it takes everybody to pull back and tell Google, Facebook, Instagram.
Now, I’m not willing to pay that price anymore. Everybody pulls back a little bit. It will probably break down, but you’ll always have the one outlier who’s like, oh, everybody’s pulled back. So I’m going to sit at the top. So I can outbid everyone. So it’s it’s like any of the competitive market supply demand increases in costs. People are going to have to pay more for the keywords you got to pay more for their products.
It’s just that it’s the way of the world, it seems. And you don’t escape that even on digital platforms.
Jason:
Yeah, it’s interesting, as I’m just thinking back to that, my economics modules about about supply.
Astra:
Got it in the.
Jason:
Yeah, yeah. AS level yeah… smashed it and yeah. So I guess it’s just like a good old fashioned bidding war in terms like how supermarkets would undercut eachother on costs. Now it’s the same for ad spend. And if you’ve got it’s whether your customer lifetime value is worth that initial costs..
Does that mean then the big companies who sell loads of things will probably be able to bid out bids the small companies that have niched down because like if you’re a virgin and you get a customer through on your credit card, you can send it, sell them holidays and everything else because then somebody is more time.
Astra:
Yeah, typically. I mean, it depends. Obviously, bigger companies will compete with the bigger companies. Medium companies compete with medium companies, small companies with the small companies and on paper, that would be the way that it goes. So they go on more money spent outbid them waiting all the clicks kind of thing. But actually, I’m thinking to some of the clients that we have one of them who is like a B2C patio furniture sales company.
And in spite of them being quite small, company is just a lovely couple who run at nine months of the year and they are outbidding Amazon for the furniture that they provide, which is crazy because they don’t have an enormous marketing budget so they wouldn’t mind me saying.
Jason:
How is how they doing that?
Astra:
Just really this is the thing, the cost per click is increasing, but theirs is one of them. That has that three times increase since last year alone. So they are suffering under the weight of that. But just because it’s a really refined campaign they’re targeting really small keywords, obviously Amazon targets a wealth of products. This is just on this one product that they supply.
They are managing to outbid Amazon and the pair of them in the search results consistently.
Jason:
When you say refined, what do you mean?
Astra:
So really lean, I think we’d say, so we’ve worked with this company on and off for five years as I say they only work but 9 months of the year so we do sort of like nine month campaigns for them. And in that time we start really broad in terms of the different keyword variations for their product that we target and eventually through the optimisation month by month we whittle it down to okay we’ll turn off the ones that aren’t converting. We’ll turn off the really expensive ones until you eventually get left with sort of like 9 or 10 keywords which consistently provide for their business. So it’s lean is what I would say.
Jason:
Yeah, okay cool, well let’s come on to the solutions then. What can you do that’s go through like this, can we do this by channel? Maybe if we can do them by channel, but that so, so Facebook and Instagram, we, we help loads of B2B on B2C companies, but Facebook and Instagram still works even on the B2B level, right?
Because you capture the people, maybe they’ve come to your website and then you retarget to them when they’re on that kind of their own time. But they still… you still get good conversions. How do you tackle that when when the cost the click is increasing. How do you tackle that natural increase and make sure you still get good results.
Astra:
So you can either touching on just what I said about the patio furniture supplier. You can make your companies really heavily optimised, which is what you should do anyway. Best practise. So make sure you’re only targeting the locations that may be profitable for you, make sure you’re only targeting the specific demographics that you buy from you. You can do it that way.
So you control your costs by targeting just the people you know are existing customers. But that’s going to help you grow right? You’re not going to be able to reach people who don’t know about yet. So in order to reach those people who aren’t necessary engaged with the brands, don’t know who you are and still manage to keep it all in under your marketing budget, Facebook have like released a couple of new tools which they haven’t specifically said to also target this high rising cost per click but in like very early experiments, we have found that they are doing that.
So they’ve got a new campaign tab called Advantage Plus. And like everything, it’s all moving towards like ultimate automation and AI learning. So rather than building an ad set filling out the demographics telling it who you want to target, where you want to place your ads creating your advert, putting your image in, putting you URL in and doing your tracking. So doing all of that, you can just give it a URL and a collection of assets if you like.
So photographs videos, headlines, descriptions, just give it a URL and it will just dynamically generate outfits based on what it thinks you want it to target. It can also dynamically pull through audiences based on the people who’ve been on your website as long as you have that pixel and still see that. So it can track this sort of stuff.
And that’s just proving a really effective way of using those tools to bring it down is typically lower cost per click. As always, these platforms are sales tools right in themselves. So if you use that tools rather than being like, Oh no, we’ll do the manual way, if if you push one of their new developments, then you will be rewarded.
Jason:
So, oh, okay. So that could be a topical. This could be working right now. Like get on it. While it’s hot.
Astra:
Yeah, absolutely. Well, just as with anything, any of these services they want you to promote them as being good. And to do that, they have to work right or they have to be rewarding for the people using them. So people like me will come on podcasts and tell everyone how good they are and that kind of thing.
Jason:
In six months. That won’t be the thing that will work?
Astra:
There might be something else in six months. You know, there’s been a lot of change at Facebook Meta.
Jason:
How do you keep up with all this? How do you know about that and I don’t?
Astra:
Because I do my job… yeah, you know, in the back end of business manager and stuff, and it’s a bit of different if you just if you just have like a page interface, you probably aren’t aware of that. Although the page tools in Facebook have increased a lot too and you can manage up some stuff from there.
Now, they’ve used the back end management system as manager and business manager. There’s always they really push these things on you so that we like having seen this, I’ve seen this and most people just click go away, whereas I have to go through everything, the tutorials and look at how they work and clients have to put faith in me.
Right? There’s this new thing. Do you want to give it a go? And sometimes I like you have the really good ones. They’re like, Yeah, it’s like, No, no, that’s the traditional way you sometimes ultimately solve a high risk reward, right?
Jason:
So do you have to try different things?
Astra:
Yeah, absolutely. I mean, we’ve always that’s what we’ve done the whole basis of data marketing is A-B testing, right? You tried to have things, see what works and then push it in that direction. This is just another thing where I’d be testing for people get really daunted by the fact that the advantage plus dynamic and lots of like buzzwords.
Yeah, it can be a bit overwhelming, but ultimately still running up. It’s on Facebook.
Jason:
Okay, so that’s that’s Facebook. What Google ads is massive for us and that customer click I feel like as it gone up by.
Astra:
More or less. Yeah we’ve definitely seen that across different industries and that’s been the main platform where people are really noticing a pinch of it going up. This is the platform when I say we’ve seen increased by three times bigger, this is one where is.
Jason:
And what’s what is there anything we can do.
Astra:
Yet like Facebook, they have kind of rolled out a new, new campaign type. So traditionally people would run outfits on the search network using keywords to target their audience. Or the display network using retargeting and display ads to show across YouTube or Gmail campaign where it comes into the inbox of people who browse the products, that sort of thing.
They’ve got a new campaign type called Performance Max, which takes into account every single placement of Google on some part of sites as well. And you give it an asset library, like with the Facebook advantage plus, and videos and descriptions, headlines, paths, URLs, and it would share out across the network and the machine learning will place the combination of URLs, pictures, headlines together in the position that it thinks is most likely to convert based on how you set up the campaign, budgets and that kind of thing.
So it’s moving away from manual CPC, which used to be the best practise years ago. You could like control how much you wanted to bid and if you couldn’t reach up it, you couldn’t put your adult there whereas now things like really automated and automated bidding strategies like maximising conversions and clicks or target ROAS are the best practise.
But because of that it means we’ve not had any control over that cost per click or what we do have some control of the high quality keywords, more refined is the cheaper. It’s likely to be, but we don’t have that granular control where we say, no, don’t bid for this. All we have control of is that daily budget or the daily cost proposition that we set it.
And within those parameters, Google will just fire out, which means it does creep up. And that coupled with the inflation and everybody bidding on the same keywords with more money is really driving up. So performance metrics, so.
Jason:
Sorry to jump in the about what I think the things you set to Google, it’s almost like having a conversation like this is what a customer’s worth. It is the most raw spend target ROAS which is Return On Ad Spend (ROAS) this is what we want to get in return for the money we put in and that’s all kind of that’s bidding parameters and this is different because.
Astra:
This is the same it’s you still set those bidding parameters and automated bidding strategies but instead of just refining it onto one network it reaches across display across the search network, across shopping if you want it to if you’ve got an ecommerce website and rather than having to put different baskets of money for each, you just give it a daily budget and it will the machine learning and the algorithms will learn the best placements, the most profitable placements and the most profitable combinations of ads and place them across there, which is resulting in lower cost per click so far.
Jason:
And this is Performance Max this is called
Astra:
So we’ve had a lot of success with it and again, we had to like break track lines. Like there’s this new thing. We’re not sure of what you want to give to go people’s cost per click was going up. So, so they’re willing to give it a try and I started with one client and couldn’t believe that they were getting like cost per click of 10 pence and I was like, Jesus, this is like the early 2000 again kind of thing though I can remember because I was a child then (this is a lie) but yeah.
And I was like, show me. Not like this is just beginner’s luck kind of thing. It can’t be like this. And it continued to stay between like 10p and 30p, which is unheard of like the last time I heard of Cost per click that low was years and years ago and on that manual CPC. So yeah, we’ve had a lot of success of that and I rolled out across all of the clients so okay so.
Jason:
So that’s Google performance Max that can help a little bit with Google, Facebook Advantage plus I can help a little bit. They sound like toothpastes..
Astra:
Nine out of ten dentists recommend Advantage Plus
Jason:
I’ve, I took a lot about cost per click am I talking too much about cost per click? Is everyone talking too much about cost per click?
Astra:
I mean, it certainly feels like I’ve had to have a lot of chats about customer click and yes, it’s going up. No, we’re not ripping you off We’re not just charging you 3 times as much for a fewer clicks. And yeah, part of the part of the conversation is that yeah obviously it’s it’s a cost on your business is really important.
You know, cost of business equal how much profit you make it into the accounts when you add them up.
Jason:
I think the equation goes like that…
Astra:
Not quite like that. It’s a big jump, but you know, you have to take into account the cost of you click if you want to like especially if you rely really heavily on one channel and that’s your main source of lead generation. It ultimately reduces how many leads you can get for your budget, how many that you can reach customers, how much revenue make.
Still not the full equation, but a little bit clearer but we have been saying, you know, cost per click is just one metric that we measure as to define the success of the campaign. And although it’s an important one, we have seen kind of a trend where although obviously you getting fewer clicks for your budget, they’re actually converting at a higher rate.
So that’s why this machine learning comes in, right? It’s placing adverts in better positions and better places in front of better people. So because that’s getting stronger…. ultimately, even though they’re getting fewer clicks are some of the clients we’ve done this will tend to be getting better conversion rates and high quality leads as well. So as always, everything’s balanced on a knife edge, right?
It’s weighing up your spend with the quality of your leads. You can spend loads more and probably get more leads. But they might not be any good for your business. It could just be bots and crap coming through, whereas because we’re being really refined with the targeting through this A.I. learning, we’re seeing that it’s converting better. So ultimately you have to have I said to clients, you have to be like look.
It’s high, we can control it. We can bring it down a little bit, but we there’s no guarantees awith AI but it’s converting better. What’s more important at the end of the day?
Jason:
Yeah, okay. So when you say better people, better placements all that stuff is that like how you know, if the person is more likely to actually go ahead and buy it? Is someone that has seen this ad in this position, someone may click on something very easily when it’s pushed into their face maybe by mistake and your cost per… that’s, that’s going to get you more clicks, but they’re more likely to convert when they’ve been shown it around maybe an affiliate product or something similar or something like that is that sort of the right lines?
Astra:
Kind of… Yeah.
Jason:
That’s no then.
Astra:
Kind of.. kind of that’s why I’m the head of advertising. Wow… Flex! I got a promotion guys… is it evident? Yeah kind of. So again, it is particularly with like display ads so we can say, oh, we want to show the model that similar websites to ours all people who engage with these topics. So, you know, if someone’s engaging with using the example before patio furniture on like an Amazon, we can tell Google, oh, I’ve got patio furniture client people who buy from them typically have browsed on August and Amazon.
We can give it that information. And so people might be doing a little browse looking for the new furniture in the garden and sunshine and then be like, oh, oh, there’s that company click kind of thing, you know, just catching them at the right moments again. Is that higher intention sort of purchases is putting out and people who have more intentions of buying rather than just be like, Oh, we want to get your loads of clicks, scattergun approach.
Jason:
So I thought the correct answer was going to be better than that, but we’ll carry on so if not cost per click and if so, cost per acquisition, I guess, or conversion. What are the things I should be asking about that you can boast as performing well and as a sign that it’s a healthy account, doing good business sense.
Astra:
Well, that depends on how many campaigns set up and what your goals are. So different KPI is for different different goals, different business goals, right? So depends if your a… and which part of the funnel are you targeting. We talk heavily about cost per click, conversions and how that interferes with sort of business ideas, but some people just want more awareness. Some people want people to consider their products.
So ultimately, although cost per click is going to be high for them, they can absorb a little bit more because you don’t expect to see that much reward off the back of an awareness campaign. For example, as long as you’re getting those impressions. So say you’re running an awareness campaign, you’re probably putting it on a display network or across Facebook, Instagram and so the most important thing then is reach. How many people as it reached.
How many people have seen it, how many people are aware of your brand? Impressions; how many times has that ad served in your demographics? Frequency; how many times has people have people seen the ad? Is it too much? Are you wasting your budget giving it to them? Four or five, six times, that kind of thing. But if you’re running a target ROAS campaign, you try to get return on ad spend.
You’re telling these platforms, right, I need to make £5 for every pound that I spend. So ultimately metric is going to be okay. How much have I spent how much have I generated? The division of those two numbers that gives you the ROAS. That’s going be what you look at there. If you are driving lead generation, ultimately the metric that you want to look at is those conversions.
How many people have filled out form? How many people have called the business? How many clicks have you had? What’s your click through rate? So that’s when cost per click does become like a big factor but even then, as I said earlier, if those conversions are rising, the conversion rate is rising. You click through rate is rising, maybe bounce rates dropping in Google Analytics? Maybe people staying on the page longer and browsing more and more of the content on your website.
These are all things that we should be considering. We shouldn’t just be honing in on one thing. If we do a call back to the first ever podcast that we did with our Director Paul right, zoom out. it’s always the advice focussing in on this one metric? It’s just going to give you a headache if you get so hung up on that that you forget to see everything else that comes in around the user’s journey, right?
How strong is your advert? How relevant are your keywords? How strong is the landing page experience? How long people on your site for? All of these things tell a story. So ultimately, if people are spending more time on your site, browsing content, sharing stuff online, can you afford to pay a little bit more for your customer? Probably.
Jason:
I always think that you sound like you often are protecting the algorithm quite a lot when it comes to conversations around learning phases and too many changes to campaigns and having a fixed strategy. So we’re probably going to see is because the way that there’s a little bit of fear in the market and people aren’t sure what’s going to happen in the next six months is that people will start investing they’ll have a bit of cash, a bit of budget.
They can they can invest and they’ll be like, What? How many leads can we get for this? I’ve got a couple of thousand pounds. I just need leads. I need to turn some of those people and customers. And then we safe. Everyone’s salaries protected enough to make anyone redundant. We’re cashflow good from that point. Those are the kind of campaigns you’re probably going to get.
Why does that not help the algorithm and why would you suggest a longer, more strategic approach?
Astra:
These algorithms work in mysterious ways. I mean, you can understand them as much as you want. And we obviously when you would have been for a long time, have a lot of insight as an agency, but they rely on a constant stream of information. So having a long term campaign so it can measure seasonal dips and troughs in the market, so it can measure the wavering cost per click, so it can measure different placements the longer time we give it and the more information we feed it, the smaller it gets.
So I if we starting like a… someone’s got a couple of grand and is like just throw it all at it for three months. I mean, that’s great. And we probably will generate some leads, but then say you want to do the same campaign in six months time, you’re unlikely to replicate any results from it because it’s not had it’s learning period and
it’s learning all over again. It’s like kind of like a Groundhog Day situation. Just keep starting from the same point. You’re going to progress so far, it’s just it’s a bit of a ceiling there. Whereas if you keep it running for a long time, it will get more and more optimised. It’ll know where to place the ads, what’s bringing you money in, and ultimately will drive down that cost per click as well.
Like the longer and the more it learns, the cheaper it can make things for you. You just have to have a little bit of faith in it. So we absolutely have to protect the algorithm at all costs.
Jason:
That’s a really good point. And so it’s like having the marketing team working on a big campaign and then wiping their memories and then saying might not work on this campaign. You get none of the learnings from before that.
Astra:
Yeah, yeah, exactly. So the longer term that you can run them, the better.
Jason:
I mean, this might be a bit too open. And what can you do then if you’ve only got a certain amount of budget, where would you you know, if you, if you if you can’t if you can’t get the investment or the sign off on a big, long strategic campaign? Yeah. Is it, is it worth doing those little ones, those little short bursts of spend what would you advise someone like that?
Jason:
Would you say, look, just save you up and then go big? Or would you say, yeah, do little bits to prove concepts that it works I How would you advise on those situations?
Astra:
Yeah, it depends. It depends on the client. The advice will be save up. If if you’re a seasonal business, for example, we run a few accounts like this right now. As I said, again, come back to the patio furniture. They will run them 5 months of the year. We have lots of really seasonal clients on board at the moment. So this is like peak time for them.
So early on we’ll have conversations in like December, November when the client and they turn the campaigns off because there’s no point in running ads then. Nobody in the UK in that right mind is going patio furniture, at least not live here. And so there’s just no use them. It just to run ads in that sense is costly for them.
They’re just spending money and getting no return so in that sense, we’ll say turn them off, saves the budget and invest it in the summer when you know there’s going to be a point, you know it’s going to be tough. So it’s all about working when we’re out, when to start the campaigns and then say, oh, you’re going to have a we can predict like a big peak in May.
So let’s save some of the budget. We’ll start low and then build up, hit that peak so that you can get all that revenue in so that they can survive the winter. So in some instances like that, we’ll say “yeah, you know what we can do on and off campaigns” but… I don’t know if I should remember trade secrets.
Jason:
Of course, you should.
Astra:
Ok so.
Jason:
That Jamie Oliver teaches me how to cook every every time I turn the TV on, I still can’t cook.
Astra:
So one of the ways around it is if we have these short on and off campaigns, which we’ve already said aren’t ideal, right? They interrupt the flow of learning, but sometimes you can’t escape from it. You just don’t have the money. In which case we’ll say, yeah, we’ll do it. Of course, we’re never going to say unless we say, oh, absolutely.
No, it’s not good any leads. You’re just going to spend three grand and you’ll get nothing from it. Then we’ll say, Absolutely not. Save it for next year, go on holiday. Who cares? And one way we can do it is turning on and off campaigns. That’s the crux, right? That’s the worst thing you can do. What you can do to kind of manipulate the algorithm is say you have like three or four months off, but you you still got a bit of marketing budget if you keep that campaign running and then just reduce your budget to like a pound a day, it won’t perform well, you won’t get leads from it, but it keeps the algorithm learning and it just keeps it just ticking over enough to keep learning. So that’s something that we’ve done with a few of our clients who want to like day part, or we’re only open three days of the week, so they don’t want to run their adverts on the weekend. We’ll keep it running over the weekend, but with really minimal budgets just to keep the algorithm going because if you turn it on and off, you’re constantly going back into that learning phase.
It’s having to learn the best bidding strategies and where to place your ads, which makes your performance really up and down. Sometimes it will overdeliver, sometimes it won’t deliver at all so yeah, that’s the trick.
Jason:
And yeah, we’ve talked a lot. We’re talking a lot about cost per click and cost per acquisition. What about real life application to this? Can you either there must be like a couple of examples perhaps of where you’ve changed, how you’ve managed to view it, because the trust for the client is so good. So instead of saying Get me lower cost per click, get me lower cost acquisition, they’ve just said, Hey, I want £7,000 this month, how can you get me that I just realised I’ve used a number.
Jason:
I know you’re going to say so. Yeah. Can you tell me that story where someone just said I need this much leads? Do you do what you have to do to get me that?
Astra:
Yeah. So we have a regular client who worked on enough with, I say on and off. We’ve worked consistently with them for ten years on different projects and always run PPC advertising that one of the greats who started on PPC advertising and then branched out into SEO GDD web development. So they like kind of like a star in the cabinet of our clients and they have like everybody seen our cost per click increase and the customer acquisition increase and a bit of a dip in traffic as well.
Again, these are one of the quite seasonal businesses I had a conversation with the client recently last month, do you want to go? And he said to me the cost per click with some of these keywords, they have five or six campaigns is really rising. What can we do? How can we make these generate more? And he’s like, it’s a bit quiet in the office.
We could do with, we could do like some doubling the amount of leads coming in. We can handle it so that right okay, we’ll get about 300 at the moment amongst the few, but how many do you want? And he is like 600 and he’s like, so should I double my budget? And I said, no, we don’t need to do that.
Sometimes if you tell Google, here’s my money, it will drive up the cost per click and the cost per customer acquisition because it’s learning where to place them, sometimes you can use more trade secrets, you can manipulate a little bit and say, I only want to spend this much, but I don’t want to pay this much more for anything. So it’s about using the forecasting tools cleverly and working about where that tightrope that you need to walk is in terms of not driving up that cost, of not driving up that cost proposition but still generate leads.
So yeah, he was like, Okay, what do we need to spend? Where’s the ceiling here to achieve that goal? So we went away, we did our research, we figured out if there’s any more keywords we could add in, if we could optimise the landing pages further and settled on a budget increase of just £100 a day. Well just £100….
Obviously significant over a month, but quite low in comparison to what he was spending anyway. I think it’s like £250 a day. So we upped it to £350 and some absolute smashed his goal of over 600 leads and had them all coming in at customer acquisition about £14 which is really cheap.
Jason:
On the back end. What’s their customer lifetime value roughly.
Astra:
Oh, so I don’t know how much I can say about giving it away. They give varying it varies from customer to customer but I think it’s a minimum of like £6,000 upwards to £60,000.
Jason:
Okay so what’s 6000 divided by 14 just to work that out…
Astra:
I need my massive calculator.
Jason:
Great return on investment though yeah.
Astra:
Yeah, really good. Whatever the rest of them, I mean I could probably put it up right now but they’ve, they’ve consistently had like upwards of like 500% return on investment every month of the year even though they are a seasonal business. So when it’s peaking for them, which is up now, they can see that go up from like 700, 800, 900.
So and they’re busy. He didn’t answer the phone yesterday when I rang him so that’s good sign right.
Jason:
So so costs per click are going up by either how if you set how much by.
Astra:
About three times.
Jason:
Three times.
Astra:
On average.
Jason:
So to do so we just stop doing paid ads so we just start doing.
Astra:
No thank you. I would like to keep my job.
Jason:
We’ve got other options right? SEO? We’ve got offline advertising? Do we just start investing in some of the newer channels? what what do you advise for growing? So a company wants to grow their business, but they’ve just got their website, whatever. We have had a website for a long time and maybe we’ve done it or they’ve made it look good or they just got a new landing page.
They need leads as yesterday. Don’t they all! of course I’ll do the full thing, but then they’ll look at it properly, you know? What do you advise them to do today?
Astra:
Well, first of all, just because cost per click is going up doesn’t mean we should all ship and just think, Oh, well, we’re going to abandon any kind of paid advertising. Absolutely don’t do that. It needs to be even now, even in the glory days of the 13p cost per click manual CPC “Hacienda 2000s” it is Friday guys, gotta get the hacienda days in there and that even then PPC should never be a standalone strategy right because what happens if the internet goes down one day what happens if your computer stops working?
You know, putting all eggs in one basket has always been a bad strategy in life generally, but definitely in digital advertising. Because the minute you turn them off or the minute and you competitor and just the market you bidding all over again kind of thing. So it’s a constantly in flux and you just it’s not it’s never been reliable it can be a reliable source of leads, but the metrics have always been up and down.
Even the way to run a campaign has changed so much in five years. So it should always be part of a wider strategy, more so now because it costs per click is going up. And typically that means the cost per conversion will go up too, and you’ll get less traffic you can’t just keep pumping money into that over and over again.
It’s not sustainable where eventually where you blow all your funds and end up paying a fortune for your customers and it might not return be that way. There might not be that customer lifetime value starts to drag down all the really important business metrics. So absolutely, we can still use it as part of the strategy, but we should do some SEO, we should use an email nurturing, we should do some well in the targeting of current customers.
That which is another sort of argument that we’ve touched on before in previous podcasts, but with less and less of third party data being able to share being shared across these platforms. And Google Analytics is going to sunset Universal Analytics next year as well. So that coupled with this rising costs per click means we’re going to have less information about where we can place ads and who we’re placing them in front of
Jason:
So let me stop you on the “sunsetting”. And so that’s where they’re changing. I’ve thought this is mostly going to affect just us isn’t it and it’s how we track things and break down – the dashboard changes.
Astra:
Yes and no. No, I don’t want to like scaremonger on the podcast. Yes, I do. But it’s actually going to change for anyone who uses it as well. You need to be getting it set up now.
Jason:
So we talk about Google Analytics.
Astra:
Google Analytics. GA4. Google Analytics 4. Currrently for a lot of people have Universal Analytics, which is the interface that we all know and love from a very sad to lose. Is that getting rid of that entirely and it’ll have to be GA4, but they are not going to the data will not transfer across the properties. So it will only start collecting data from your websites from when you set it up.
So ideally you need to do it now so that you’ve got years worth of data. Otherwise you have nothing to base year on year growth on. So very important factor for businesses you do on a growth day for get it sorted out and but all of that to say with less information at our disposal and less control over the cost per click, we need to be investing in more sustainable forms of marketing.
So SEO which as we’ve said hundreds of times, is a massive investment to get to where you want to be. But then once you’re at the top of the rankings of Google, you’re not paying for every customer who comes through that kind of thing. We can’t easily, as easily could target new customers. So we need to stop incentivising the ones we have currently and sending email, nurturing and that kind of thing.
So it needs to be part of an inbound strategy.
Jason:
Inbound strategy, yeah. I think, I think, yeah, often we forget as marketers that every most of the stuff we operate in is in the attract phase almost when managing campaigns, trying to get new people in via app and email or whatever it might be, all of that. So, you know, or you can. SEO. So but yeah, any of that stuff. Any of those channels can just turn that off, change the rules and then your dead in the water right.
So I mean, that’s why you do a broad range of them still. But the ultimate goal we kind of forget, I think, is that you need people to be on your or in your community. Right, and nurturing them in that way and becoming ambassadors for other people. So that’s probably why we talk a lot about cost per click and all that stuff.
But we need to do it is part of a broad campaign and in the end we need to keep sight of the ultimate goal with that. Also ties back to how much is a customer worth and how when you say cost per click or what’s the average lifetime value of a customer, maybe it’s more than you think because if your average customer refers you on two more customers in the B2B world, that can be quite common.
Then actually your average customer value is higher. Maybe your bids should then be higher on the beginning of that journey.
Astra:
But that’s it precisely. People are just, as I say, that used to those like early glory days about having less than a pound cost per click. So even though customer what you have ten grams of them lifetime value so they see suddenly that clicks £3 and they’re like, whoa, whoa, whoa, whoa, whoa. Which is understandable. You know, nobody likes the cost of living going up, but ultimately, what, £3 out of the £10,000 lifetime customer.
Jason:
And just to summarise as well, there’s so much work has gone into the algorithm since those days that your cost per acquisition is actually lower. Yeah. So yeah, customer clicks gone up by three times that your quality of that, of that customer that comes face or the track, the lead that comes through is much better. So overall we’re, you know, we might be better off.
Astra:
Just to touch on what you said about the nurturing of what your current customers expect, it’s always going to be high when you cold targeting people on these networks, it’s always going to be higher because they don’t know your brand, they don’t engage with you, they don’t know your reputation they’ve not learnt about you yet. If you start pushing out retargeting ads to people who’ve already bought from you, who’ve already engaged you, we already have that data in the algorithm about it.
It’s going to be lower because they’re way more likely to click on your ads if there is you before. So is a really important part of it. People forget about in these quick wins that this whole audience of their own, people who already trust above them and use them, they sometimes get left behind on the PPC.
Jason:
Cool. So let’s I mean, let’s just finish this off I guess with, you know, who is the ideal candidate for a PPC campaign and what does that lead into ads and how can they start that off? Kick that off. This is the segue into a plug just in case that wasn’t clear.
Astra:
So PPC campaigns can work for pretty much anyone B2B / B2C – say you have to have a good landing page somewhere much. Send them. You have to have the ability to track. Ideally, tracking is really important so that we can go the tracking feeds into the algorithm. If we can find out more information or who’s on a site and what they’re doing, then the the algorithm learns and it can work for small businesses, medium businesses, large businesses, businesses with any sort of marketing budget upwards from £500.
But ideally £1,000 a month. It really is appropriate for all, to be honest. But we’ll always do our due diligence and go in forecast and say, Oh, maybe it is not going to work for your goals. Then say, maybe invest in something out. So but I can’t think of an example whereby it’s not good for them. Google even has the Google ads grants for charities, which we’re running as well, whereby we can unlock funding for charities of like £7,000 a month.
Jason:
unlock funding?
Astra:
Unlock funding.
Jason:
Free money?
Astra:
Free money! from Google. And so everyone could be on it. I mean, you can’t sell guns on there
Jason:
What makes you go straight for that?
Astra:
It just seems obvious you can’t you know, there’s this there’s obviously a policy in selling guns, not your gun sales. When we can’t help you. It’s quite difficult for us to do like prescription drug services that can be quite challenging, not allowed to do medicines, anything that’s sort of like a bit of a grey area of the law.
We can’t help you. So.
Jason:
Okay, okay. His, his, the plug of all plugs. So what should you do then if you’re interested in doing some paid advertising.
Astra:
Give me a ring. That’s all you need to do. Yeah, no, I mean, send me an email, you can to get in touch on our website. We can go from the ground up. We can do it retrospectively. It could be a new business, an existing business as one changing agencies, whatever give us a call. If you’ve already got Google of the company thinking of switching.
We can do an audit, take through what’s working, what we could do differently if you start it from the ground up, we’ll get to to figure out what keywords might work for you, what you can afford, what your budgets are and put together a plan of action. So yeah go into our webpresence.digital or if you’re a charity and you are interested in unlocking £7,000 of free funding every month and then that’s a slightly different service that we offer obviously is free money that’s webpresence.digital/Google-ad-grants and on there there’s a free eligibility checker.
So as it’s a charity not for profit based service, not everyone’s applicable, but we will do a free eligibility check for you.
Jason:
Awesome. Thank you very much for joining Episode five. Hopefully you got loads of information out of it, lots of trade secrets that previously Astra kept so close to their chests and is now out there, which might not work in six months so get in quick because you know, the world knows about them. That was really good – thank you.
Astra:
Thanks.
