By: Zoltan Wagner On: April 23, 2010 In: Articles & News Comments: 3

In the inbound marketing services side of our business, we get to review a lot of PPC (pay per click) campaigns to help prospective clients determine if we can achieve better results.

Even though I see it all the time, it never ceases to amaze me how many of the accounts we review seem to be focused on getting as many visitors as possible for the allotted PPC marketing budget. The bids are low and the keywords are loosely and broadly targeted, resulting in the showing of ads to a large number of untargeted visitors, thereby generating large numbers of low cost and low value visitors.

I shouldn’t be surprised, given what we see in the mainstream marketing media. A recent article in Direct Marketing described PPC marketing as a good way to “create awareness about a brand or the launch of new product by generating traffic to a website”. In the article the author was promoting CPA (cost per acquisition) campaigns as an effective alternative to PPC. This is a false dichotomy.

Paid Search Should be Focused on Cost Per Acquisition

PPC marketing campaigns that are intended for lead generation should be laser-focused on cost per prospect, lead, opportunity and sale over any other metric. These metrics are the only true measures of value for a campaign that is focused on lead generation. Implementing tracking systems for accurate measures of these metrics is not necessarily easy, but it’s well worth the effort.

Creating targets for the cost per opportunity and sale and focusing on developing a laser targeted campaign that attracts exactly the right visitors (who are most likely to convert to a lead or sale) is a much more effective strategy for a B2B campaign. A monthly budget limit can still be used, but the number of leads generated will be far better than any campaign focused only on attracting cheap visitors. And if the organization has no problems related to inventory or fulfillment of the business (a surprisingly common problem) – it may well be determined that the budget should be increased based on success to scale as far as the search volume allows to deliver even more leads to the sales force.

Tracking Leads, Opportunities, and Sales

It can be quite challenging to set up accurate tracking mechanisms to measure the cost of sales down to the campaign and keyword level, particularly in B2B markets with high-value sales. Some of the problems include sales being closed offline, leads being delivered to partners or through a channel, multiple people in the purchasing decision, or even internal resistance to measurement where it’s perceived as a threat.

Even with these obstacles, it’s still possible to implement detailed, closed-loop tracking and measurement, and it must be done to run a PPC campaign profitably and competitively. It may take changes to the way leads, opportunities and sales are managed, but it’s well worth the effort.