According to classic marketing philosophy, all marketing channels fall into one of three categories: paid channels, earned channels, and owned channels.
One of the most popular paid channels today is PPC (pay-per-click) advertising.
PPC, along with email marketing, is one of the top three generators of on-page conversions for businesses. (SmallBizGenius)
Unfortunately, PPC gets a bad rap. It’s not uncommon for business owners to read about how effective PPC is, run over to Google and haphazardly set up some ads, and then wonder why they’re not getting any more sales.
Then, they simply conclude that PPC isn’t effective. But according to a study by WordLead, 65% of people click on ads when making purchases.
The problem isn’t with PPC but how these businesses are approaching it. With a little bit of foresight and planning, PPC ads can be an incredible boon to eCommerce businesses and significantly increase your bottom line.
In this post, we’ll go over best practices for eCommerce PPC campaigns, including:
- The pros and cons of PPC for eCommerce.
- How to target the best keywords for your business.
- How to think through the entire customer journey, not just the ad click.
- How to use competitor analysis to intelligently edge out other advertisers.
Let’s jump in.
What is PPC Management?
PPC management is the discipline of planning, executing, overseeing, and fine-tuning your business’s PPC ad spend and strategy.
There are several different ecosystems that offer PPC advertising, but the most popular is Google Ads, with social platforms like Instagram and Facebook close behind.
It’s not uncommon for bigger businesses with massive marketing budgets to hire a full-time employee to do nothing but manage PPC campaigns.
However, PPC is infinitely scalable. You can start small and grow from there. So, if you’re a solopreneur or you’ve got a small team, don’t fret. You can still make a significant positive impact on your business with PPC ads.
What is PPC in eCommerce?
There are many different goals and approaches eCommerce businesses can take to running PPC ads. Therefore, PPC for eCommerce can get a bit more complicated than other business archetypes.
Don’t be fooled into thinking that just because eCommerce businesses sell things, all PPC ads should sell. That’s the same naive approach to PPC that makes businesses so easily give up on it.
Since Google tends to be the home of more transactionally-minded users than social media, many eCommerce businesses prioritize Google as their main PPC hub.
However, social platforms still play a powerful role in capturing leads using PPC ads, especially for products that benefit from imagery and video.
Some eCommerce businesses with longer sales cycles use PPC ads to capture leads, then remarket to them through email marketing or social ads.
Other eCommerce businesses will actually “go negative” on their PPC ad spend because they know that the average lifetime value of a customer will make up for the initial profit loss.
For this blog post, we’ll focus on Google Ads due to its ubiquity, but many of these principles can be applied to social PPC.
We’ll go over all these best practices and more in an upcoming section. But first, let’s go over the pros and cons of PPC advertising.
Pros and Cons of PPC Ads for eCommerce
Pros of PPC Ads
PPC ads are perfectly measurable
Unlike the paid channels like billboards, radio ads, or magazine ads, which rely on estimations to determine ROI, PPC is meticulously measurable. This makes it simple to determine ROI on ad spend and whether or not to double down on certain keywords or pivot your strategy.
PPC lets you get laser-specific in targeting
Google not only lets you target keywords but also specific locations and times to display your ads, giving you lots of control over who sees your message and when they see it.
PPC is great for rapid traffic and fast testing
We at SkuVault are big fans of content marketing and SEO, but we can’t deny that any form of organic marketing takes a long time to kick in.
We’re talking potentially six months to see results.
For quick, easy traffic, there’s no better channel than PPC. This is especially helpful if you want to test a product, landing page, or piece of content in the marketplace.
Rather than waiting for months to see how organic visitors react, you can speed up your testing and iteration cycles by funneling traffic through PPC ads.
PPC offers lots of data to analyze
Another great benefit of PPC is the sheer volume of data it offers your business in a short amount of time.
By running a PPC campaign, you can learn so much about your target market, including:
- What products or services most resonate with them.
- What keywords do they respond to most favorably.
- Demographic information like age, location, and gender.
This information is hugely valuable not only in perfecting your PPC strategy but in all aspects of your business.
You may find that a certain offer you thought would be a success doesn’t perform well in the marketplace at all. Or that your website’s messaging is totally off.
All of this helpful data can be gleaned from an effective PPC campaign.
Cons of PPC Ads
The machine stops when the money stops.
The most glaring downside of PPC (and any form of paid advertising) is the most obvious — as soon as you stop funneling cash into the system, the ads stop.
Organic marketing efforts like SEO and content marketing, while a much more long-term strategy, give you free traffic in perpetuity.
Clicks don’t necessarily mean sales.
It’s easy to get blinded by vanity metrics when you start managing your PPC campaign. You might see all these clicks on your Google Ads dashboard and get really excited. But remember, a click isn’t a sale.
In fact, clicks that don’t end up in some sort of conversion should concern you. Not only because something is deficient in your funnel, but because those clicks are costing you money without a return on investment.
PPC requires constant upkeep
PPC is the opposite of a “set-it-and-forget-it” marketing channel. It requires frequent tweaking and constant monitoring, especially when you start branching into multiple customer segments and lots of target keywords.
We recommend starting with two or three basic keywords and scaling up from there. This workload is why many businesses opt to hire PPC specialists to manage campaigns on their behalf.
PPC Best Practices for eCommerce Businesses
Alright, now that we’ve laid the groundwork, let’s get into the best practices.
Set up your Google Analytics properly
Before you even think about opening up that Google Ads dashboard, you must make sure your Google Analytics is configured properly.
Otherwise, you’ll be flying totally blind, or, perhaps even worse, you’ll be getting inaccurate data that may precipitate poor business decisions.
A full Google Analytics setup is far beyond the scope of this post. But this tutorial is hands-down the most comprehensive guide on setting up Google Analytics for eCommerce businesses.
If you’re on the Shopify platform, this tutorial has you covered.
Define your goals (and be specific)
What’s your goal for PPC ads? If your answer is “make more sales,” you need to be more specific. Here are some questions you should ask yourself as you give your PPC strategy more shape:
- Do I want to sell to existing customers or brand new customers?
- Do I want to bring people into my email list for future marketing or go straight to product promotion?
- Which customer persona should I target?
- Which product is the best candidate for PPC ads?
Many of these goals can’t be fully fleshed out until we review the next few best practices.
Know your critical business metrics
There are three essential metrics you must know about your business before spending a dime on PPC ads.
They are:
- Profit margin
- Customer acquisition cost (CAC)
- And the average lifetime value of a customer (LTV)
Let’s discuss why each of these is essential.
First off, your profit margin is by far the most critical metric. It will dictate how much money you can spend on ads without losing money on the initial ad spend.
For example, if a product costs you $1 to produce and you sell it for $2, your profit margin is $1 for that particular SKU.
Therefore, it won’t make sense to spend more than $1 in PPC (or any marketing channel for that matter) to generate a single sale. Unless your customer LTV makes it worthwhile to “go negative” on the first sale (more on that in a second).
The next metric you need to know is your customer acquisition cost (CAC). In other words, how much does it cost your organization in sales and marketing spend to win a new customer? There’s a simple equation to determine this.
First, choose a date range. Ideally, this would be at least three months, but the more time, the better.
Then, add up your total cost of sales (this includes employee salaries, inventory costs, technology costs, etc.) and marketing (all ad spend and marketing channel fees).
Divide this figure by the number of new customers. The resulting number is your customer acquisition cost. The goal is always to reduce CAC, but a large CAC isn’t necessarily a bad thing, especially if it’s exceeded by the next metric — average lifetime value.
Average lifetime value (LTV) is the next critical metric to know before starting your PPC ad campaign. As the name suggests, average LTV is the amount of revenue a customer will bring to your organization over the course of their time doing business with you.
Lifetime value gets a bit complicated to calculate and is beyond the scope of this post, but this tutorial will walk you through how to find it for your business.
Why is knowing LTV important? Let’s say your business has a near-perfect retention rate. Customers who buy from you almost always come back for more (this is very common when selling consumable products).
You know that you can go negative on your initial PPC ad spend to win new customers because they will make it up with return business.
This is just one practical example of why knowing (at least) these three metrics will help you lay the foundation for a successful PPC campaign.
Even if you don’t plan on running PPC ads, these KPIs will only help you make better business decisions, so we recommend every eCommerce business know them well.
Think in funnels
Everyone’s customer journey is different. Maybe your eCommerce business has lots of low-ticket items that are prone to impulse purchases (like vegetable seeds, for example).
Or maybe you sell big-ticket items that require a lot of research, planning, and a longer customer journey (like 3D printers, for example).
The former business may be able to get away with just sending PPC ads to the homepage and product page. They may even get a few sales, though they could certainly be getting more by utilizing some of the best practices in this post.
However, sending a searcher looking for information on 3D printing to your product page without any guidance or clear next step is a mistake.
You’re taking a top-of-funnel searcher and hitting them with a bottom-of-funnel sale in a matter of seconds. That’s almost never effective.
A better approach would be to run PPC ads to top-of-funnel searchers looking for basic info on a 3D printer and lead them to a custom landing page.
On this landing page, there would be no mention of products or sales but simply a lead capture form offering a free PDF or resource in exchange for the user’s email. I’m picturing something like “16 Useful 3D Printing Recipe and Ideas.”
There’s less friction to engagement in this case, and the user is much more prone to enter their email when they get a free resource rather than simply bounce off the page because you were too aggressive in your marketing.
This way, the user isn’t annoyed, you haven’t wasted money on clicks, and you have an email address for your database that you can nurture through email marketing.
This is why it’s so important to think in funnels during your PPC campaign planning.
Study and differentiate from the competition
One of the first things you should do when starting any new marketing channel is study competitors. Why reinvent the wheel when you can look at what works for the competition and reverse engineer their success? This is especially relevant with PPC ads.
Before you start planning your ads, type in a few keywords related to your business in Google. For example, if you sell accessories for VR headsets, some keywords you’d want to research are:
- “VR headset accessories”
- “Oculus accessories”
- “VR replacement parts”
Or any related keywords you can think of. Pay attention to what pops up on the first few ad results. These are your competitors.
If you want to stand out from the noise, you’ll need to add qualifiers to your copy to differentiate your brand.
As you plan your copy, here are some qualifiers you can implement right out of the gate for a more successful PPC campaign:
Garner trust with social proof
If you’ve got customer testimonials, now’s the time to use them! This can be the number of sales you’ve made, statistics of happy customers, or even an excerpt from a positive review.
Mitigate risk with a guarantee
Ensure that the customer clicks by giving them a guarantee. Lower the barrier to entry and make it almost silly for them not to click. Maybe that’s a very generous return policy or money-back guarantee.
Offer a discount or free perk
If your competitors aren’t offering something in the actual ad copy itself, you have a huge competitive advantage here.
In doing research for this post, an ad for a service-based company caught my eye. It simply said, “get a quote in 60 seconds.”
The offer was so compelling that it made the ad stand head and shoulders above the competition.
Make it clear what the user will get if they click, whether that’s 10% off their first purchase, a free sample, or a valuable piece of free content.
Niche by location
If you live in Austin and you’re looking for a coffee roaster, which ad are you more likely to click?
“Coffee Roaster | Freshest Beans Around” or “Coffee Roaster | Freshly Roasted Here in Austin, TX”?
Even if your business model isn’t location-specific, the fact that searchers see their location makes it that much more eye-catching.
Where this helps eCommerce businesses is when you target the places to which you can ship.
For example, if you make high-ticket items on the West Coast that you can’t afford to ship all the way to the East Coast, you can target only searchers West of the flyover states.
This ensures that the searchers who see your ad are indeed your target customers.
Prioritize keyword relevance over keyword volume
Once you’ve laid the groundwork in the previous steps, it’s time to jump into Google’s Keyword Planner and start doing some keyword research.
Each keyword will have a few associated metrics — the following are the most important:
- Cost-per-click (usually a high and low range)
- Competition
- Keyword volume
Cost-per-click is an estimate of how much it will cost you each time someone clicks the ad. Google will continue to serve up the ad until you’ve depleted your monthly budget.
A high cost-per-click is an indicator that the keyword is profitable for other businesses and thus highly desirable.
Competition is a measure of how many businesses are clamoring after that keyword. The higher the competition score, the harder it will be to outrank competitors. Low competition is obviously preferable, but this often comes at the cost of volume.
Keyword volume, our final metric, is the one to watch out for. High-volume keywords look really good on paper. After all, why not go for the most popular keywords?
However, it’s almost always a better strategy to target hyper-specific, low-volume keywords as you’re just starting out. If you have to choose between relevance and volume, always choose relevance.
You’ll not only get more qualified searchers clicking through your ad, but it’ll save you a ton of money in the long run.
Add negative keywords
Don’t overlook the critical step of adding negative keywords. These are keywords that you don’t want your ad to show up for.
When your brand shows up on irrelevant queries, it not only makes your business look unprofessional but may cost you money in clicks from unqualified searchers.
For example, if you sell dress shoes for men, you’ll want to make sure you don’t rank for “dress,” as that’s obviously a much different search intent.
Double down on the successful keywords
One of the most important disciplines in gardening is pruning. Pruning involves cutting off dead or dying parts of a plant in order to strengthen the plant’s overall health.
The idea is that you don’t want the plant wasting its energy and resources on dead or dying shoots. You’re effectively redirecting precious nutrients to the healthy parts of the plant.
This metaphor is a perfect picture of what it looks like to manage an effective PPC campaign.
As you run your campaign for a few months, you’ll start to notice certain keywords getting much more traction. It’s not uncommon for the Pareto Principle to take effect here — 80% of your results will probably come from 20% of your keywords.
Your job is to “prune” those dead keywords and redirect your budget to the queries that perform.
This is one of the reasons why PPC demands so much attention, but why constant tweaking and monitoring can save you a lot of money and help you get a much better ROI.
Use data to troubleshoot and refine your campaigns
Alright, so you’ve done everything on this list. You’ve planned out your funnel, refined your keyword selection, and created compelling copy with a unique twist to differentiate yourself from the competition.
And… you’re still not getting results. Don’t panic. This is totally normal.
In fact, it’s not uncommon for PPC campaigns to go through multiple iterations before they really find that sweet spot of profitability and high ROI.
This part is actually the most fun. You get to put on your lab coat and goggles and do some real-world marketing experiments.
Here are some common issues with PPC campaigns and some suggestions for how to diagnose and fix them.
Problem: Users are seeing the ad but not clicking it
There are a number of potential causes of a poor click-through rate. The following are the most common:
Your keywords aren’t relevant
Maybe you rushed keyword research, or you didn’t know your prospects as well as you thought you did, but for some reason, your keywords simply aren’t relevant to searchers.
We call this mismatched intent. The searcher was looking for something that didn’t align with what you were offering in your ad.
A good way to fix this is to recheck your competitors and make sure you’ve really fleshed out your negative keyword list.
Your title and meta description aren’t engaging
A Google PPC ad has four critical parts:
- The title
- The meta description
- The URL
- The image (if applicable)
Double-check that each of these parts is as optimized as possible. Utilize the previous tip and include a differentiator like a low-risk guarantee or free trial.
Study what your competitors are doing and one-up their efforts with better copy and a higher quality image.
Problem: Searchers click the ad but don’t take action on the page
Setting up your PPC ad itself is just half of the PPC equation. The other half is building out a landing page that flows naturally from the ad copy.
Here are a few ways to fix poor engagement on your ad’s landing page.
Create a consistent narrative from the ad copy to the page
The best PPC ad campaigns have ad copy that flows seamlessly onto the landing page.
For example, let’s say you’re an eCommerce company selling multiple different types of personal tech devices.
It wouldn’t make sense for you to run an ad for smartwatches and then dump your users onto your general product page.
You would want to have a landing page built that answers that specific query. In fact, it’s often a good practice to build a custom landing page for each ad so that you can fine-tune the message and user experience.
Optimize the page for UX best practices
If folks aren’t taking action once they land on your site, ask yourself the following questions:
- Is it abundantly clear what next action I want the user to take? How can I make it more clear?
- Is the call-to-action too aggressive? Should I make it something more top-of-funnel?
- Is the page cluttered or streamlined? Is there a single call-to-action or dozens of elements vying for the user’s attention?
Use heat mapping tools to pinpoint dropoff locations
Heatmapping is the practice of actually studying real-life recordings and charts of user behavior on your site.
These tools can help you see exactly where folks are “dropping off.” For example, perhaps you notice that users are leaving the page halfway through your copy.
This trend may be a good sign that you need to shorten the copy or provide a call-to-action higher on the page.
More Best Practices
There’s so much more we could say about running a great PPC campaign. Leverage the above strategies, and you’ll be ahead of 90% of businesses on Google Adwords.
Here are a few more things to keep in mind as you’re running your PPC campaigns:
- Add schema markup to your product pages. Schema is a snippet of code that tells Google exactly what your page is about. Using schema can help you get featured in Google’s “Rich Results,” which can dramatically boost click-through rates.
- Adjust your ads based on seasonal demand. If you sell seasonal items, you’ll want to adjust your PPC schedules accordingly. Also, watch your budget, as cost-per-click numbers can spike dramatically in Q4.
- Think through the entire customer journey. Clicking your ad isn’t the end goal. It’s just the beginning. Make sure you have a plan for the entire customer journey, all the way from clicking the ad to making a purchase (and even coming back for return purchases).
SkuVault can help you keep up with demand
If you leverage all the best practices in this post, you’ll not only see an influx of traffic to your site but most likely an influx of sales as well.
That’s we created SkuVault, an all-in-one inventory management system to help you streamline your eCommerce business and keep your customers happy (all while saving you headaches).
SkuVault comes with robust barcoding features, purchase order tools, and powerful analytics so you can align your PPC campaign schedule with customer demand.
You can read about the full list of features in SkuVault here, but our fundamental motivation is to help you work on your business, not in your business.
To learn more about SkuVault or schedule a demo, click the button on this page.
