The PPC Guide for Beginners, Part 1: Intro to PPC ROI


This is Part 1 in a 5-part series. Read the rest of the series here:

Getting Return on Investment from PPC

“Return on Investment” (ROI). It is a business school basic and a fact of life. If you get less out your efforts than you put into them, you’re going backwards, not forward – and, eventually, you will be bankrupt.

PPC for Beginners

One investor takes a chance on a start-up company and makes millions. Another puts her life savings into a “sure deal” and loses everything. Return on investment can make or break any operation – and it is a primary consideration for anyone considering a pay-per-click (PPC) campaign.

Before you chance a dime on Google AdWords, Bing PPC, or any other means of gaining more business, consider the potential and probable ROI of your actions. You won’t know the actual results until after you’ve taken the plunge, but you can (and should) perform a pre-launch analysis of your situation to give yourself the best shot for success.

Does Anyone Really Win with AdWords?

If the probability of favorable ROI from an action isn’t likely, there’s no use wasting your time even considering it. Let’s begin with a few case examples from users of Google AdWords – the most popular means of paid advertising on the internet, and a venue where each click can cost up to $50.

PPC Guide

Google AdWords works for large companies, perhaps, but can a small business realize significant ROI there?

These companies gained business and increased revenue through AdWords campaigns:

  • In 1988, the first Roy’s Restaurant opened in Honolulu. Today, there are 31 locations and Roy’s is in eight states on the mainland. They were early experimenters with mobile-only search, an option now simple to execute with AdWords – and, in 2010, Roy’s restaurants used PPC to increase customer calls for information by 40%, paving the way for an ROI of 800%. Would you spend one dollar, if you knew it would bring eight dollars in return?
  • Suzanne Golter is an animal lover extraordinaire, and she parlayed that affection into Happy Hound, a daycare and boarding facility for the lucky, pampered residents she serves. Her background in marketing provided an excellent grasp on the identity of her prime customers, so she began testing the various channels of reaching them – from magazine ads to getting out the word online. Today, Suzanne says she has determined the winner: AdWords brings in 90% or her business, developing an average of 40 new clients every month.

Of course, there are also plenty of examples of companies that lost money on Google AdWords campaigns.

Managed wisely, AdWords and other PPC campaigns can provide a healthy ROI. Done incorrectly, PPC can be an exercise in futility.

And that is why you want to start building on a strong foundation. Here’s how to get started:

What makes the difference between success and failure with PPC?

That really is the big question, isn’t it? When you are sure of getting a positive ROI, your only concern is about the magnitude of effectiveness. But when your likely outcome is a negative ROI, it’s about as wise as flushing money down the drain. You work too hard for your cash to throw it away.

Successful PPC campaigns start at the beginning – they build from an informed foundation of critical insights. You may be in a rush to get going with PPC, or you may have already jumped in and now you are floundering and want to recover. Even if you are already on board and realizing a profit from your PPC efforts – these considerations are paramount.

How to Launch a PPC Campaign

When getting started with PPC, here are some of the questions you need to consider:

What are your goals?

How will you know when your efforts are successful? Are you seeking increased inquires and orders? Do you want to build your brand? Are you struggling to rank in search results and want to be sure your link gets seen by prospective customers or clients? All of these are excellent reasons to get going with PPC, but it is imperative you define your personal objectives and determine how you will know whether or not they are being achieved. Otherwise, you’re just shooting in the dark, hoping to hit an unseen target.

Are your landing pages ready?

PPC is called “pay-per-click” because that’s how it works: every time someone clicks on your link, you pay. But getting clicks isn’t enough. In order to realize sufficient ROI from your PPC campaign, you need to make sure the clicked link takes the viewer to a page with a high probability of getting the reader to take the next step in your sequence – whether that is requesting more information (lead development), placing an order, receiving a message, or some other action.

[MORE: 12 Tests to Increase Your Landing Page Conversion Rate, Starting Today]

What words and phrases do potential customers use to search for your product or service?

Stuart Draper is the CEO of Get Found First, a company focused on helping clients get the most out of pay-per-click advertising. Here is what Stu has to say about the keyword prep work necessary for PPC:

Put yourself in the shoes of the potential customer getting ready to search for what you sell. What keywords and phrases might they search? Before doing anything else, do a few of those searches yourself. What do you find? Who is advertising? What is their value proposition? What calls to action are they using?  

As you search using variations of the keywords, do you see all of the same competitors or a large variety? A large variety means the space is very crowded with lots of advertisers fighting for space. If you don't see any advertisers, it may very well be that you don't have a good product or service for search advertising. PPC isn't for every product and service. The one area where I see the most failure in PPC is new inventions. People can't search for something they don't know exists. 

This article begins a series of posts aimed at helping those who are curious about PPC, who are just starting out with PPC, or who may be about ready to give up on the idea of PPC advertising altogether.

Our hope is that many who have yet to take advantage of the leverage PPC offers will be able to grasp the concepts involved, walk through the preliminary considerations, and launch a PPC campaign that will generate a healthy return on investment.

In the next installment, we will dig deeper into the foundations to talk about PPC goals. From there, we will take a closer look at why landing pages and keywords are vital to your PPC strategy

Don SturgillDon Sturgill is a freelance writer and speaker from Bend, Oregon—PPC capital of the world. Don is the author of The Roadmap to Freedom, a work focused on helping entrepreneurs reach their dreams.

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Pramod Choudhari
Jul 30, 2013

You've explained the logic very well mate ! The obvious reason why most PPC campaigns fail is the lack of ue of relevant phrases/keywords.

Don Sturgill
Jul 30, 2013

Your comment reminds me of Elisa's recent article, defining "great content," Pramod. Her first point was,"Great Content is Findable." As you say, focused keywords are essential. 

Jul 31, 2013

Setting goals as for me is the hardest part of the job... But looks like there's no way to escape 

Stuart Draper
Jul 31, 2013

Another helpful tool for competitive research, specifically when you are looking to see how competitive the keywords are going to be, is  They have a free tool that is helpful and a paid version. If that tool doesn't give you what you are looking for, there are plenty of others out there. Just google keyword tools.

Don Sturgill
Jul 31, 2013

Looking for tools is how I found WordStream, Stuart. I may be a bit prejudiced, but WordStream has some of the best PPC and SEO tools I've found anywhere.  One thing often overlooked when setting goals, Kseniia, is to STOP before you start. That is part of the Roadmap to Freedom system I wrote for an SBA business incubator in Navajo territory.  It is important to clear out all the voices arguing to be heard (have you ever noticed there is sometimes a crowd living in your head?) and get focused on the desired destination. It is entirely possibile to stay really busy ... and get nowhere. I hope to talk more about that as we continue this series. My aim is to provide food for thought -- not only for the PPC beginner -- but the pro as well. The fundamentals are always important. We never grow out of our need for them. 

Chineme Noke
Jul 31, 2013

Very thought-provoking article - thanks.

Aug 01, 2013

Very interesting read, thanks - I'll take some of that info forward to use. 

Barbara Taylor
Aug 01, 2013

I really enjoyed reading your article. I recently began a PPC campaign and it hasn't been going as well as expected. These tips gave me some great ideas to implement.  PPC seems like something I can grasp a little better now.

Don Sturgill
Aug 02, 2013

Stay tuned, Barbara. We will be exploring the fundamentals step-by-step to make sure the lights are on. Many times, folks give up on PPC because it seems too difficult to understand. The aim here is to clear away the mystery and provide access to what can be a powerful and effective tool. 

Sjaunna Garfinkel
Aug 01, 2013

This is a sweet straightforward explanagion about the mysteris os Ad Words and PPC.Thanks,Sjaunna

Colin Brazendale
Aug 01, 2013

There are many people that say if you cannot get your product to sell with ppc profitably, then you don't have a business. I am starting to believe this.Thank you for a great article.

Don Sturgill
Aug 02, 2013

Great quote, Colin. I hope you will join us each week for another installment to this series. UCLA Coach Wooden began the first practice of every season by showing players how to tie thier shoes correctly. He emphasised that big things can't happen unless the little things are in place, and every successful endeavor is based on fundamentals. He led his team to 10 NCAA Championships in 12 years by thinking like that. 

Rick Noel
Aug 23, 2013

Excellent post Don.  The thing that I love about  PPC campaigns is that profitability can be managed down to the keyword level and performance data can drive near real time campaign adjustments. Try that in outdoor or print!  Like any other advertising/sales siuations, you have to have a compelling offer and create a demand for that offer to be successful. Once these table stakes are met, that  is where landing pages and ad copy come in. It's what I like to consider a "data-driven art."  The combination of creative, testing and analytics provides PPC characteristics like no other advertising medium.

Don Sturgill
Aug 26, 2013

Well said, Rick. From a writer's standpoint ... PPC proves how one word can make all the difference. Those who write novels can ramble ... but PPC writers must be focused and make every word count. "A data-driven art" is certainly an apt description.

Aug 26, 2013

Thanks so much for writing this. I've only read the first part, but am looking forward to part 2 which I am starting right now. Tons of people tell me how easy it is to waste money using adwords, but so far, no one has really given me a real solution to NOT wasting money!

Aug 28, 2013

Thanks for the article, I am tring to write PPC exam.  I am sure this article will help me  to set my goal.

Don Sturgill
Oct 06, 2013

Thank you, Nathaniell and Rasheeda ... and thank you, Larry Kim and the great team at WordStream. All five parts are published now. I do hope they are helpful to those wanting to get started with pay-per-click internet advertising.

Tauseef Alam
Dec 30, 2013

Hi Don i'm a newbie in PPC marketing. I'm planning to be Adwords certified and your guide will surely gonna help me out.

rachel smith
Dec 16, 2014

Hi Don,Please help me, can we set the customer target on PPC? How the steps?

Dec 16, 2014

I truly enjoyed reading your post. I not too long ago began a PPC campaign and it hasn't been going along with expected. These tips gave me some fantastic ideas to implement. PPC seems like one thing I can grasp a bit much better now.

w3training School
Jul 02, 2015

Thank's Don for creating this guid, it very helpful for people who are new to PPC, so i have refer this post to some of my new ppc trainee's.

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