In this blog, Kostas Giannoukaris, PPC Director at Huble Digital, explains how much a pay-per-click campaign can cost and what variables affect the price of a campaign.
There are a lot of variables that affect how much a PPC campaign costs: goals, spend, competition – but in this article, I’m going to those that affect the price of PPC investment the most. I’ll also share a few examples so you have an idea of what you might pay when running a paid media campaign with and without the support of an agency.
How much do your goals cost?
The most important things to consider when calculating the potential cost of a PPC campaign are your goals. Do you want to:
Increase brand awareness?
Drive traffic to your website because it’s new and has no organic traffic?
Or get people to take action on your website (convert into contacts/leads/sales)?
Let’s assume you want to get 100 people to convert on your website by downloading a top-of-the-funnel (TOFU) piece of content. Having these people convert will add them to your database and enable you to nurture them into customers.
In the B2B environment, paying an average of £100 to get just one conversion via a TOFU piece of content promoted on Google Ads is pretty common.
So, because you need to pay roughly £100 per contact and need 100 conversions, you’re looking at a total of £10,000 (100 x £100). Therefore, your first consideration is whether that one contact is worth more to you than the money you spent on them.
In B2B it usually is. This is because (assuming one of these contacts becomes a client) the revenue from that contact (now a client) can potentially cover the entire cost of a campaign and then some.
For example, if we were to run a PPC campaign, and that contact signs up to a 12-month website development and content campaign with us – and it costs £8,000 a month – we’re getting £96,000 a year, for just £100.
How many channels do you need to use for your PPC campaign?
The next thing to consider is the number of paid media channels that you want to use.
There are loads of options available –but the most important are Google and Bing, which run Google Ads and Bing Ads respectively. Through them you can run search ads, video ads and banner ads (you should consider them as two different channels – Search and Display – if not three).
Next are LinkedIn, Facebook and Twitter. Each one has its own paid media platform and each one operates differently.
Lastly, depending on your target audience and where they hang out online, there are other websites which offer PPC solutions. One example is Quora.com, a Q&A site which has its own paid media platform. Using Quora, you can create and run campaigns which target people based on question topics.
The more channels you want to use the higher your budget should be. For our clients who operate in the B2B technology space, we recommend spending at least £1,000 a month per channel to get enough data for campaign optimisation as soon as possible after launch.
So, for a Google Search Network and LinkedIn Ads campaign, we would recommend spending at least £2,000 a month (£1,000 per channel).
If the budget is not spent quickly enough, you run the risk of taking a lot longer to identify what’s working and what’s not (that's if you ever manage to get enough consistent data to find out). There are even cases where your daily allowance will not even let you get a single click depending on how expensive they are.
How many languages do you want to run campaigns for?
If you are thinking of running PPC campaigns in more than one language, you need to treat each language as a separate campaign. This is because you shouldn’t be serving ads in more than one language to the same audience.
With this in mind, within the paid media platforms you will need to split your activity into different campaigns which will, by extension, split your budget accordingly. I am not suggesting that you spend the same amount of budget for every language but, considering that £1,000 per channel is the minimum monthly spend, you have to spend at least £1,000 per language per channel.
Using the previous Google Search Network and LinkedIn Ads example, if you need to run these in two languages, e.g. English and German, expect to spend at least £4,000 a month. This is because £1,000 per campaign x 2 languages x 2 channels = £1,000 x 2 x 2 = £4,000.
**Please note, these prices do not take into account the translation cost for all of the ads/keywords and content, and it can be a lot!
Another thing to consider is if you have someone that speaks the languages you want to target, leverage their expertise. If not, you’ll have to outsource the work to a specialist.
How many pieces of content will you be promoting?
This is another important decision to make before calculating how much you should spend per month. In a similar fashion to channels and languages, your budget should be split accordingly for each content asset you want to promote.
Depending on what you want to achieve with each piece of content or landing page, you might or might not need to increase your budget. If your chosen pieces of content have the same function and value, then you could use them in the same campaign and just let the audience decide which they prefer. You can then see which content asset drives the best results. However, if one piece of content is for brand awareness and the other is for lead generation, then they should have their own campaign and budget.
Adding two pieces of content (one for brand awareness and one for lead generation) to the above example will double your minimum expected PPC campaign investment.
What will a PPC agency cost?
Companies with large in-house marketing teams can potentially run PPC activities themselves and hire more people where necessary. This will cost the company a bit more (as employees will spend time setting up and running the PPC activity).
For any PPC campaign, I would expect at least 3 people to be working on it full-time (these individuals would most likely be creating campaigns, allocating budgets, managing targeting, identifying keywords, optimising efforts, tracking KPIs and so on).
What this means is that you also have to factor in the monthly take-home of the three employees based on how many months the campaign will be running.
On the other hand, if you don’t have the in-house resource, you can use an agency.
Every agency has a different pricing model – so make sure to look around. We – The B2B Marketing Lab – try to understand and consider all the above before we estimate how much we should charge potential customers (this is because our costings are mainly based on manhours).
There is a minimum amount of time that we will need to spend when building and running a campaign and that time is broken down into the following:
We need at least 10 hours of set up time per campaign per channel. If there are multiple languages, we need an additional 5 hours per campaign, per channel, per language. We believe that by setting up a campaign properly at the beginning, we can save clients time and money in the long run.
We need at least 4 hours of management time for 1 channel and 2 hours for every additional channel. We build this time into our pricing because we know that for every campaign, there are at least 2 hours of monthly administration and communication with the client (regardless of how many campaigns and channels). We also want to spend an absolute minimum of 30 minutes every week on each campaign to optimise them.
We spend at least 1 hour every month to produce a monthly activity report to show campaign performance and the effects of our activity. These reports provide valuable insight that will help optimise campaigns and enable data-driven decisions for future marketing activities.
Monthly update calls
We have monthly update calls with the client (1 hour) to run through the performance report in detail, answer any questions related to the activity and the report and agree upon further actions.
Finally, depending on the channels to be used, we charge a technology fee (which is 2% of the spend) to cover the cost of the bid management platform that we use for the Google Ads and Bing Ads campaigns.
Most of the hours are dedicated to the campaign set up but this can change depending on how much the client wants to spend monthly.
Where possible, we will try to ensure that our total monthly fees do not exceed 30% of the client’s monthly investment. However, because our mixed SEM analyst hourly rate is £150, if the client wants to spend £1,000 on PPC (excluding the setup cost and time) our management time will be 6 hours x £150 = £900. This means that the total monthly investment will be £1900 and therefore our management fees will be more than 45% of the overall cost to the client.
If the client’s monthly spend exceeds £15,000, we estimate our fees based on a percentage of the estimated spend. This rate starts at 15% and decreases as the monthly spend increases. This is because our target isn’t to get the customer to spend more every month but to reduce their cost-per-click and ultimately their cost per conversion.
How much will a complete PPC campaign cost?
Below is an example of how we would approach and cost a complete PPC campaign for a B2B tech company that wants to get 20 leads a month and nurture them for three months.
(Keep in mind that every single client is different – so this might not be for you. We always try to understand our client’s needs before we offer them a solution).
To deliver leads to the client’s sales funnel, our first recommendation would be that the client creates at least 1 piece of TOFU content. Second, to drive contacts down the sales funnel (and potentially generate customers), our next recommendation would be that the client creates at least 1 middle-of-the-funnel (MOFU) and at least 1 bottom-of-the-funnel (BOFU) piece of content.
Once the client has these assets available, the next step is working out the best platform to reach the client’s target audience. Let’s assume that – based on the target audience the client wants to reach – we have identified that the best option is for the client to use the Google Ads Search Network and use remarketing through the Google Display Ads Network. Furthermore, the client can only work with English speakers, so they only need to target English speakers.
In summary, we have:
1 language (English)
2 channels: Google Ads Search & Display Networks (however one is display remarketing which will spend much less per month than an ordinary channel)
3 pieces of content with different value and purpose
20 leads per month
The 20 leads per month could come from any of the 3 pieces of content, so we would calculate a mixed cost per conversion – £150 – from the search network activity. Taking this into account, the client should expect to spend at least £3,000 per month on search network advertising (20 x 150). Also, as there are three separate pieces of content, there is a minimum of £1,000 allocated to each piece of content (which results in £3,000 so the two totals match). Then, we add about £500 from the second month of activity onwards for remarketing.
For the setup we would provision 25 hours:
10 for the first piece of content
5 hours for each additional piece of content
5 hours for the banner ads creation and to set up the remarketing audience
This is a total of 25 x £150 = £3,750.
For the management of the activity we would charge 10 hours per month:
4 hours for the first piece of content
2 hours for each additional piece of content
1 hour for reporting
1 hour for the update call
This is a total of 10 x £150 = £1,500 per month.
Our technology fees would be 2% of the expected monthly spend, so £3,000 x 2% = £60 for the first month and £3,500 x 2% = £70 for the following months.
Ultimately, the pricing table (based on this example) would look like this:
As mentioned before, these prices are just indicative and you should always keep in mind that PPC might not be the right solution for you and your business.
Hopefully this blog gives you a clearer idea of how much a PPC campaign could cost and how much it might cost if you were to enlist our services.