Uncategorized

What is PPC Conversion Rate and Why Does it Matter?

Are PPC Leads Worth the Expense?

Turns out the cost per lead varies widely depending on the effectiveness of the marketing company you hire to run your campaigns.

Utilizing Google Ads PPC campaigns is the fastest, most versatile method of achieving a high volume of leads for service contractors. However, buyer beware; not all PPC marketing firms produce equal results. In fact, differences in performance are alarming and could mean the difference between enjoying a robust return on investment and blowing your advertising budget with little to show for it. 

There is an enormous gap between average and superior Ads performance. According to a recent article by Wordstream, a trusted authority in measuring PPC conversion results, a full 25% of PPC users report conversion rates under 1%.

Unlike SEO, or organic lead generation, which takes many months to ramp up and achieve first-page placement on Google searches (and let’s be honest, if you aren’t being found on the first page, you most likely will not be found), using Google Ads PPC to generate exclusive leads yields much faster results.

Google PPC is an auction-style platform for showcasing businesses on the first page of searches. Rather than showing in the maps (GMB) section, or the highly regarded organic results section, Google PPC ads are displayed at the very top and the very bottom of the search page.

PPC Explained

Ads are about scarcity. There is only room for 3-6 PPC ads on a page, about half posted at the very top and half at the bottom, under organic results. In order to achieve first-page placement on Google, you’ve got to be one of the top bidders. A high conversion rate is achieved when a large percentage of people who click on an Ad call for a quote (a lead). The more leads you receive for your monthly budget, the better your return on investment. 

With Google Ads, contractors are bidding per click, meaning, they are telling Google what they are willing to pay each time a potential buyer clicks on their Ad. The goal is to pay the lowest Cost Per Click, or CPC that you can but high enough to make it into a top 3 position, at least for a decent percentage of the time. Google doesn’t place 3 companies there and then walk away. The top 3 are rotated throughout the day. What gets companies up there? First and foremost is being a top bidder. 

Achieving visibility on a search is just one piece to the puzzle though. Equally as important are your click-through rates (CTR) and your conversion rates. Click-through rates are the percentage of times someone clicks on the link in your Ad to visit the landing page compared to the number of times your Ad is shown (aka impressions). If the Ad is compelling and relevant to what the person is looking for, the click-through rate will be higher. If your CTR is low, you will likely also have a low conversion rate. 

And finally, let’s talk about conversion rates. A conversion for some industries may be the collection of information (email or phone number) from a potential buyer that can be added to a telemarketing or email nurturing list. In service contractor industries, a conversion is a lead. Better, with 99 Calls, it is an exclusive lead that is delivered either through a live phone call or email. The better your conversion rate, the more leads you will receive for your monthly budget or advertising investment.

Average Conversion Rate and Why it Matters

The average conversion rate for service contractors using Google Search PPC advertising is 2.35%. This means that out of every 100 customers who click on your Ads, only two to three will actually call you for a quote. 

The worst-performing (bottom 25%) campaigns receive a 1% or lower conversion rate. One in four campaigns falls into this bottom category. In fact, nearly half of all people who use Google Ads have a conversion rate lower than 2.5%. Included in these numbers are the do-it-yourselfers who don’t think it’s worth paying the service fee to have a marketing team manage their accounts.

Imagine that your monthly Ads budget is $1000. If the average click for your industry costs $5.00, at a 2.35% conversion rate, you’d get 4-5 leads with your budget if you hire an average marketing company. 

The best performing marketing businesses, those in the top 10% of all companies, are averaging an 11.45% conversion rate. If you were using one of them to manage your Ads campaign and had the same $1000 budget and click cost at $5.00 each, you’d achieve 23 leads. That’s over 5x the lead volume for your marketing dollars! That’s why conversion rate matters.

How to Maximize Your Conversion Rate

There is a bright side to Google Ads marketing. People and businesses in the know are able to achieve excellent results with PPC advertising. The best performing marketing businesses, those in the top 10% of all companies, achieve an 11.45% conversion rate. This is far better than the average performer with 5x the lead volume for the same budget.

A small study looked at 124 customers using Google Ads campaigns managed through 99 Calls with a monthly budget of more than $300. The Google Ads specialists at 99 Calls were able to use their in-house PPC advertising system to achieve an average conversion rate across all service contractor (restoration contractors, carpet cleaners, painters, landscapers, appliance repair technicians, electricians, plumbers, HVAC, etc.) industries of 20.43%. Using the same scenario above, these contractors would have achieved 40 leads per $1000 budget, 10x the average PPC customer.

Conclusion

With the increases in online competition, SEO alone often isn’t enough anymore for a growing service business. Many service contractors have turned to PPC advertising to increase their customer base and their revenue. However, with the huge discrepancy between top-performing PPC management firms and low performers, it’s no wonder that many companies have become frustrated with PPC. They have lost trust in Google Ads. They complain that they have burned through their budgets too quickly without results. When every dollar counts, it is crucial that contractors find a top 10% company to handle their Ads campaign. Using a trusted, experienced Google Partner to manage an Ads campaign can literally make the difference between getting one lead for every 100 clicks on your Ads or 20 or more!