PPC Traffic Projections and Investment Cases Part I

CEO/CFO/CMO: I’m sick and tired of hearing you complain about lack of budget and what you could do with $X additional budget for PPC. Create an investment case and provide an aggressive ROI/ROAS number to justify the incremental budget, you <expletive deleted>.

Direct Report Responsible for SEM Initiatives: Yes, sir/ma’am! (Mutters under breath, “How the !@#$ am I supposed to do that?”)

CEO/CFO/CMO: I’ll operate under the assumption you have the predictive forecast modeling in place already… So you’ll have the investment case to me in 15 minutes, right (It’s 6PM local time)???

Direct Report Responsible for SEM Initiatives: You betcha (Mutters under breath, “How the !@#$ am I supposed to do that?”)!

Direct Report Responsible for SEM Initiatives (Subsequently referred to as “SEM Analyst Who Is Severely Overpaid”) action plan: Crap, let me search for “PPC Traffic Projections.”

SEM Analyst Who Is Severely Overpaid: “Wow, the first organic search result is from Ian Leong’s SEM blog! He sure is reputable, credible, synonyms^100.”

12 minutes to go until guaranteed delivery time…

Measurable return and ability to predict site traffic impact are a couple of the greatest strengths of online advertising. Personally, I like to start with clearly defining the goals/objectives for the investment case.

Is visitation lift your primary metric for defining success? Or is there a conversion point (form submission, white paper download, product purchase) downstream that you can use to determine cost per lead or cost per acquisition? If branding (difficult enough to quantify) is your primary objective then I would consider adding a display advertising component. Otherwise, stick with paid search. Don’t underestimate the branding effect of search either. There is a great section on this in the 2009 Search Marketing Benchmark Guide from MarketingSherpa. No, I don’t work for them :) You can find similar research conducted by Enquiro here.

The Google External Keyword Tool can be used to estimate search impression volume for your keyword list and get average CPC’s for each. From there, you should probably extrapolate the total number of clicks based on three clickthrough rates (0.5%, 1%, 1.5% for example).

(Impressions) x (CTR) x (CPC) = Estimated Cost (Insert your budget here)

Now solve for total clicks using basic algebra. You DO remember how to manipulate numerators and denominators on each side of the equation, right? The methodology for display ads is similar except you will most likely be using CPM instead of CPC.

Once you have total clicks, you can take it further to attempt to close the loop. Take your existing site conversion data (visit to lead ratio, click to download ratio…) and cut it in half to be safe since your campaigns will obviously not be optimized at launch. Use that number to see what impact on conversion the incremental visitation will provide.

People who consider themselves “experts” in their fields tend to oversimplify things and fail to expand on points where “lay(wo)men” need further clarification. Although I don’t consider myself to be a SEM expert, I do believe I am well versed in the search space. Feel free to shoot me an email if you want to discuss this subject further or just to tell me I am an idiot :)

SEM Analyst Who Is Severely Overpaid: This guy actually sounds like he knows what he’s talking about. I can’t wait to read Part II of this series to see what else I can steal to repurpose for my own benefit!

Ian Leong’s response: Fret not, SEM Analyst Who Is Severely Overpaid! Plenty more tips you can take credit for after this message from our sponsers.

<Insert Interstitial, Roadblock, Intercept Survey…>

4 thoughts on “PPC Traffic Projections and Investment Cases Part I

  1. Ian Leong Post author

    My apologies to the loyal followers of my blog (all three of you). Due to time constraints, I simply have not been able to draft a worthy followup post that may actually be useful to someone who comes across it.

    In these times of fiscal crises, substantive proof of significantly positive ROI/ROAS is a requirement as opposed to a two sentence addendum buried on the 47th page of Appendix 7.2.c.

  2. Ian Leong Post author

    This URL is now on the first page of Google SERPs for “ppc traffic projections.” Further evidence that content is King of the SEO World. Give your visitors what they want and your site traffic will be the sole beneficiary. Remember, don’t optimize for search engines – optimize for your targeted visitor base and the rest will fall in place.

  3. SEMGuru

    Nice post. Been there and done that. I’m pretty sure we have worked together in the past. Hit me up on the email addy I registered with. Here’s a hint: WTC4L.

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