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PPC Management And The Power of Shoestrings and Bootstraps

PPC management is a service offered by many SEO companies — it’s the service of taking your pay-per-click marketing campaign under their wing and nursing it to health. Or just creating it from scratch if you don’t already have one; the point is, they manage the campaigns and make sure that they’re profitable.

Why is this important? Because for a great many entrepreneurs, ‘profitable’ is a line that’s hard to get across — it’s not that hard to make money, but it’s pretty tough to make more money than you had to spend in order to make the money in the first place. PPC management is the art of, forgiving the mixed metaphor, pulling your shoestring budget up by it’s own bootstraps.

Here’s how it works: you have a product with a profit margin. Let’s say you sell widgets for $8 at a cost of $3 per widget and a monthly cost of $5000 for rent and other expenses. Obviously, you need to sell a thousand widgets to break even. But in order to sell widgets, you need to advertise, and that takes money.

If you’re advertising online, you have two basic options: Search Engine Optimization (SEO), or Pay-Per-Click (PPC). SEO is amazing stuff, capable of driving huge quantities of traffic to your site for almost no money, but even the most affordable SEO services take months to build that traffic up to an appreciable amount.

PPC on the other hand gets your traffic today, but it costs significantly more money (on the vicinity of 16x as much per customer) as SEO. But let’s do the math. Let’s say you have to spend $.04 to get a single visit to your website from PPC. Then let’s say that, on average, only 1 in 25 visitors to your website actually buys a widget — that means your total cost-per-sale is $1 per widget.

That means that your profit per widget has just dropped from $5/widget to $4/widget, meaning you need to sell 1,250 widgets in order to break even. The question then becomes: can PPC help you sell 1,250 widgets in a month?

The answer is yes, of course it can, that’s why it works. You’ll need to sit down and talk to your PPC management company about the exact numbers in each scenario, of course, but it’s well within the power of a solid PPC campaign to drive a thousand visitors to your website every day (assuming you’ve done your homework and a decently-sized audience for your product actually exists) — and you only need, on average, 1041 to break even.

Is it extremely efficient? No — but when you’re working with shoestrings and bootstraps, the question is simply will it work? And for most businesses, the answer is yes — PPC management works.