Letter to a Prospect: Why Hard PPC Traffic Estimates Are Misleading

In Adwords Budgets, Campaign Strategy, General, General Marketing Principles, Google Adwords, Google Shopping, PPC Advertising by Kirk Williams

The following is an interaction I once had with a prospect. Because it is a conversation I have often, I decided it was time to get it into a blogpost as an educational tool for a broader audience.

To give a little context, this letter came after multiple conversations that continued down the funnel. I had sent over a proposal with a recommended beginning ad spend budget in Google AdWords and received a request for firm traffic and spend numbers for this particular client.

Here is what I sent him (yes, I did win the client!).

I edited the following to leave out any personally identifiable information.

This was my response to his request for harder traffic estimates for his PPC campaigns:

Hi Bob {fake name},

Based upon your email, I think it’s worth going a little deeper into some of my comments in the Recommended Media Spend section of the proposal doc.

I actually did quite a bit of work to pull traffic estimates and take them into account in the strategy I recommended, and that is how I got to the $10K monthly spend recommendation. However, I also understand that this can be confusing to someone who doesn’t spend all of their time in the Paid Search context like we do here at ZATO! Therefore, I’d like to go into a little detail to explain things better here of how I arrived at the number of $10K, as well as all of the factors that influence my unwillingness to provide hard estimates (or to at least do so with heavy qualifications).

There is a side to this that is essential for any client to understand in asking for estimates. That is, the true nature of Search Engine Marketing affects our ability to provide accurate estimates and proposals.

I.e., I can give estimates (I include traffic estimates below), but the accuracy of these should be questioned. This is not because of my inability or laziness (no one can get this data, even if they say they can), it is because the nature of SEM advertising is that it is multiple auctions… that have not yet taken place!

The AdWords Auction

Practically what this means, is that there is no way to tell accurately:

  1. what will be paid per click (this affects budget)
  2. who will be part of the auction (this affects budget as well)
  3. what terms will be available for auction (this also affects budget, and to make things more complicated 15% of all terms everyday everywhere are completely new terms according to Google so we can’t even estimate for on average, 15% of queries and what they will cost).

Admittedly, (and probably what you are used to) is that many PPC agencies happily give hard numbers over because, frankly, client CEOs like to see hard numbers and it is easier for selling. The issue I have here is that:

  1. it is inaccurate,
  2. it establishes a relationship from the beginning with a client who is not aware of the complexities of search and has false expectations which can hurt things long-term. This helps neither of us.

I’m fine giving some level of estimation (and I do so below). I think it can be helpful to know if there is a broader range of expectation. However, for the reasons stated above, these need to be seen more as guidelines than hard rules.

ppc estimates like the pirate code meme

The Estimates for Your Business

As I noted in the proposal, the auction based system that is employed by Google AdWords and Bing Ads gives us the ability to look at past numbers and draw estimates. This is why my original suggestion was to begin with a $10K ad spend budget for this specific client.

Here is the actual data that I pulled yesterday for my proposal in Google’s own Keyword Planner for Search Ads. I included it as a spreadsheet attached to this email {not in this post, sorry 🙂 } as well in case you want the data dump:

  • Locations: I manually entered the geo-locations around the store location to get as close as possible to a traffic estimate
  • Timeframe of estimate: 1 Month
  • Keywords pulled: 21 search keywords (Search & Shopping will target far more than 21 keywords, but we could likely see better CPCs as well with a good structure, ads, and careful management… which makes it even more difficult to pull accurate estimates)
  • Visit Estimates given by Google for Search ONLY: 1,500 visits
  • Cost Estimates: $5,750 for Search ONLY

Note 1: these numbers do not (cannot) include a full list of all the keywords which affects the traffic estimates. The auction hasn’t happened yet, so we simply don’t have that information.

Note 2: these numbers do NOT include traffic or spend estimates from the GDN remarketing campaigns and Shopping campaigns that we will be running as well. There is a Display Planner tool in AdWords, but I have found it’s estimates to be even further from reality (since CPCs vary widely, and it depends on audience list sizes), so I frankly didn’t even take the time to pull the numbers… preferring rather to go by my own experience from other similar clients.

Taking all of this into account, this was why I estimated an initial spend of $10K in my proposal yesterday and avoided a hard traffic estimate. Frankly, I wouldn’t be surprised at all if you could spend even more than this per month, but that is why I noted that having an eye on profitability with a willingness to increase budget is the best strategy here. This is why I believe $10K/month is a good initial number to shoot for in your specific case, with the willingness and expectation of raising that as profitability is established.

Final Concern About Hard Traffic Numbers

Sometimes people insist on a hard traffic estimate as something they have to see, but the problem with that is that becomes the focus of our conversation afterwards, rather than the focus being on getting the most valuable customers for the budget spent. This is the key to me, and why visit numbers can be misleading.

I would rather drive 500 people willing to buy your product, than 5000 people who don’t care.

Hopefully this helps see that my unwillingness to provide hard data wasn’t because of laziness or ignorance, it’s because I’m actually striving for more accuracy and a relationship built on trust rather than estimates. This is also why I did the work beyond what many agencies will do in an initial proposal to detail specific strategies and why I believe they would work with your business. I think it is that strategy and work that will prove I can be a better partner than agencies who just toss traffic estimates at you with no strategy.

I hope that helps give more detail on the auction aspect of Paid Search and why it’s not very accurate (and thus why I only included a budget estimate in the beginning) in helping us identify exact estimates for event that have not happened yet.