PPC Case Study 2
This second example of the results we achieved for a customer of ours was chosen to show you how rapidly and conclusively a correctly implemented PPC Campaign can improve your lot.
In actual fact we have now reduced the PPC Costs for this customer by 100% since they employed us to not only address their PPC problems, but also for our SEO Services to correctly optimise their website.
They are now no.1 in Google and don’t spend a single penny on PPC advertising.
Our first brief however was to address their online advertising costs that had increased dramatically and were seriously jeopardising their business. At that time they were spending around £4500 (c.$7000) per month on Adwords and were seriously having to look at cutting their workforce.
This really is a significant amount of money if you think about it, particularly when you consider that it comes straight off the bottom line. If you’re working on a 20% Gross Margin, then you’d need to turnover £22,500 per month just to cover the £4500 of advertising!
The first thing that we did was to analyse not only the keywords within our customers Adwords campaign, but also to analyse the Adwords campaigns of their main competitors to discover which keywords were working for them (more on this later).
Our customers original list came to 83 keywords and phrases, which were all on the “broad match” setting.
We quickly whittled this list down to 21 keywords and phrases and set these to either “phrase match” or “exact match” to make sure that we had a clear focus between what the visitors were searching for, and what they would find on the website.
The remaining 62 keywords and phrases were paused rather than deleted so that they could be re-activated later if necessary.
We then added a handful of new phrases that seemed to have shown some success for our customers competitors.
The results were instant and conclusive. The Adwords costs dropped from £4500 per month to under £300 the following month, whilst turnover from the Adwords campaign dropped by just 6.5%.
But what does this mean in real terms? Using the actual figures from this customer:
Originally they were turning over £27,500 on average from an Adwords campaign costing £4500 per month, and they were working on a 20% margin.
This gives a gross margin of (£27,500 x .2) = £5500
Less the £4500 Adwords costs gives them a profit of just £1000 which equates to 3.6% profit margin and a return on the Adwords investment of 22.22%
After our changes things looked much better:
They were now turning over £25,712.50 (£27,500 x .935 [the 6.5% drop in turnover]) from an Adwords campaign costing £277 per month, and they were still working on a 20% margin.
This gives a gross margin of (£25,712.50 x .2) = £5142.50
Less the £277 Adwords costs now gave them a much better profit of £4865.50 which equates to 18.9% profit margin and a return on the Adwords investment of 1756.5%
In summary:
| Turnover | Gross Margin | Adwords Cost | Profit | Profit Margin | |
| Before | £27,500 | £5500 | £4500 | £1000 | 3.6% |
| After | £25,712.50 | £5142.50 | £277 | £4865.50 | 18.9% |
This increased the profitability of the PPC advertising campaign almost by a factor of 5, and is clearly much better and how a healthy Adwords campaign should look!
It is clear from the figures above that getting your Adwords campaign wrong has severe implications for your business, especially with regards to your profit margin and bottom line.
Getting it right is critical if you want to get the maximum from your business.
The next step for this customer was to analyse the results and see which keywords and phrases were performing best, whether any could be improved, and whether any could be removed – but frankly after such an emphatic turnaround in performance this was a minor issue and not something that unduly concerned the customer.
We did tweak and adjust the campaign and make some further slight improvements, but after optimising the website for search engine performance it ranked 1st in Google within 3 months, more than quadrupling our customers turnover and profit and rendering his PPC Campaign unnecessary.
Hopefully these 2 case studies will give you an insight into not only what we need to be looking at to optimise a PPC campaign, but also, and much more importantly, how much difference an optimised PPC campaign will mean to you, and how much difference it can make to your bottom line.
We’ll now move on to optimising your own PPC advertising – you should be able to implement the first changes to your campaign and start saving money on your advertising shortly after reading the next section….
