To subscribe for fortnightly actionable tips, new podcast episodes & the 101 Customer Journey Optimisations ebook
In episode 56 of the Customers Who Click podcast, I had a great chat with Mike Rhodes about PPC and the Profit Curve.
PPC is not the same as it was 5 years ago; it’s one of those areas in digital marketing that just never stops evolving. One thing that has never changed, however, is people desperately trying to pay less and less for each lead.
It would be fantastic if we could pay just one dollar per good lead but it doesn’t work like that - the less you spend, the fewer people see your ad. You have the potential to unlock so much more traffic by bidding higher, and acquire customers that are just as profitable as before, but there’s more of them. To help his clients see that, Mike created a methodology called the Profit Curve which visualises how much they need to be spending to achieve their business objectives.
Mike is the Founder & CEO of WebSavvy, a Google-award winning agency, internationally recognised speaker and author (most recently of "The Ultimate Guide to Google Adwords" with Perry Marshall). Before getting into digital marketing, Mike was a helicopter pilot but realized he did not want to pursue his military career further and started looking into Google Ads when they first appeared back in 2004. You can connect with him on LinkedIn, Twitter or head over to www.websavvy.com.au.
06:12 - 15:20 - How Has PPC Changed Over The Years - It started off very easy and Mike compares it to flying a small plane, almost like driving a car - it was that simple. Today, PPC is like a 727 cockpit - you can really hurt yourself if you don’t know what you’re doing. The biggest change was, of course, the rise of artificial intelligence and how it changed Google in general. Fundamentally though, it’s still pretty much the same: showing the right ad to the right person at the right time.
15: 29 - 36:46 - What Is the Profit Curve - Profit Curve is a tool Mike created to help brands find out what is the right cost per lead for their business and visualises how much profit you can make at various budgets based on data form Google. In other words, it helps you find that sweet spot of how much the most profitable leads cost and how much you need to spend to get in front of those leads.
Essentially, think about Google Ads as an auction house: You can’t expect to buy a million dollar house for a hundred grand. So while reducing cost per click in itself is not a bad idea, the lower your “bid”, the less traffic you’ll get. Rather than focusing on spending as little as possible, focus on whether or not you want to grow a profitable business.
37:02 - 42:37 - Biggest Mistakes with PPC to Avoid - Set and forget - we’re buying data, analysing it and using it to optimise in the future, what action to take etc. Some even go as far as trying to predict their next steps. But that’s just wasting your ad spend. Another mistake is having a set budget and not willing to go over it, even if the leads are flooding in left, right and centre - why would you want this to stop?
And finally, don’t get stuck on status quo - approach PPC with the mindset that there will be lots of testing, that you will be wrong and that you’ll need to try a tonne of different things before you hit that sweet spot.
52:02 - 54:37 - Mike’s Marketing Pet Peeves - When brands still send emails after you’ve unsubscribed and poor SMS marketing that brings no value whatsoever and only ends up annoying the receiver. This is one of the worst things a brand can do to their customersIf you’d like to hear more from Joris, you can connect with him on LinkedIn, Twitter or head over to www.websavvy.com.au.