Understandably, this is probably the most common question that we get from a client interested in PPC.

Since we’re not in business to break even, it’s important to get an idea of what it should cost you to get a sale or customer lead.  Fortunately, Adwords has its keyword planner, a tool that you can use to get a ballpark idea of what it should cost you to get a sale or lead.  When you log into the tool, you’ll see this screen:

how much does adwords cost

Don’t feel overwhelmed.  Click on “get search volume and trends.”  This will give you a good idea of what you can expect the cost-per-click to be for the keywords that you want to bid on within the market that you wish to target.

What percentage of the clicks that you pay for will turn into a sale?

This is the hard part.  This is the “conversion rate” of your website and/or ads; the rate at which visitors “convert” into paying customers.  You can typically see conversion rates range from 1%-5% depending on the industry that you work in, but many of the campaigns that we run have conversion rates up to 30%.  A good Adwords manager can maximize your conversion rate through a variety of techniques, developing the right ad copy, the right landing page for the ad, and the right placement for your ad.  However, it takes time to do all of that—what can you expect to see in month 1?

Let’s do a test run

I did a quick keyword check for terms related to an appeals lawyer in Pennsylvania.  How much should it cost us to get a case and what kind of profit can we expect?

how much adwords costs in 2017

I have found that the “average monthly searches” tend to be a bit off, and if you’re in a brand new Adwords account, you’ll get a really broad number like “0-100” searches a month.

If you’re just “average”

In the case of this firm, 100 clicks will cost $1,375.  The average conversion rate for the legal field is 4.35%, so this is likely to result in 3-5 client contacts, of which 1 in 3 is likely to be a “good case.”  Ultimately, if we are working with an average conversion rate, we’re looking at spending roughly $1,375 to get a $2,000 client.

If you have a good Adwords manager

A good Adwords manager could optimize this account to get a 5%-8% conversion rate.  In this case, the firm would be likely to get 2-3 cases for the same spend, cutting the cost of a client from $1,375 to $823.

If you have a rockstar Adwords manager

If you’re running a campaign that converts at 15%-25% (as many of our attorney campaigns do), then your $1375 goes a long way.  In this case, of your 100 clicks, 20 would be likely to contact you.  Of these, 6-7 would be good cases, bringing the cost of bringing in a new case to $211.  If a client is worth $2000, that is a nice return.

Ultimately, the skill of the person running your account is the deciding factor

But you can use some rules of thumb in calculating the results you can expect.
  1. What conversion rate does your Adwords manager normally get for clients like you?  Run the numbers based on your cost-per-click and see how profitable it would be.  Rule of thumb: don’t spend more than 33% of a customer value to acquire that customer.  Anything over $475 for this client should be suspect.
  2. What percentage of the leads that you receive are “good leads?”  If you’re like us, a good 4/5 of the web leads that we get are “good leads” that we can help.  If you’re like our attorney clients, that number is only 1/3.  Try to figure out what your rule of thumb is.

Comments

comments