Media plan for paid search advertising for small and medium-sized businesses: how to link it to the real world?

So, for example, specialists make mistakes when drawing up a media plan for an advertising campaign and setting the numbers obtained in the Google Ads Keyword Planner or other similar services as advertising targets.

I experimented with a real advertising campaign on Google Ads. I uploaded all the keywords of the ad groups into the Keyword Planner, added all the negative keywords from this campaign and compared the actual performance of the advertising campaign for 7 days to those that the Planner gave me twice. Let me remind you that the keys, negative keywords and geographic targeting were identical.

Here are the results:

I got roughly the same results only at the cost per click (CPC), but the results of the Planner and the actual number of impressions and clicks differ significantly, in some cases for almost 20 times.

Now imagine that you paid for the Serpstat account and the hours to collect the semantic kernel, and then unconditionally trusted the Keyword Planner to plan your advertising campaign.

My suggestion is to reduce risks and draw up a target media plan; here we will calculate the indicators at which advertising is beneficial to the customer. That is, consider what cost per click and conversion rate you need to have to achieve your goals.

How does it work?

As a result, your media plan will look something like this:

The maximum allowed CPA value should be less than your profit per transaction. If we earn $4 from one transaction, our CPA must be at least $3.99 so that we receive a cent of profit from one transaction.

In other words, the maximum allowed CPA should be lower than the average check multiplied by a margin. That is if the average check is $4, and we earn $0.8 from each transaction, then the CPA should not exceed $0.79.

It happens that an online store sells different types of goods, and each product category has its own margin. In this case, you need to draw up a target media plan for each category separately.

Remember the sequence of actions:

The most reliable source is historical data. If you already had advertising activities, it is better to take them as a basis. Even if you configured a mediocre paid search advertising campaign, this data will be a good starting point for further calculations.

An important note: if you take data from an old account, be sure to exclude statistics on brand queries as it distorts the real picture.

The screenshot on the right shows the results where queries with the name of an online store were excluded, that is, queries from users who were already loyal.

Why is it important? The purpose of paid search advertising is to acquire a disloyal audience; loyal users will come to your website themselves.

If there is no historical data, see the cost per click and the conversion rate figures in other sources. For example, if you work with an agency, specialists can look for the necessary figures in projects of similar subjects and with the same geographic targeting.

These data will also be fairly accurate, although not the same as your historical data. In Netpeak, you can break the data down by topic, region, type of platform. We regularly publish studies on the cost per click based on a sample of such projects on our blog.

Google Spreadsheets are a very convenient tool for such tasks.

At first glance, this table looks scary, but in fact, there are only three main indicators.

Let's say we have an online store with an average order value of $300 and a margin rate of 28%. At the first stage, you need to calculate the target CPA, for this we use the average store's check parameters (take it as a constant if there are no instruments to influence the special offers in the store, and so on).

The conversion rate depends on the customer's unique selling proposition (how beneficial it is to the target audience), website usability and the level of optimization of advertising campaigns.

Cost-per-click is the responsibility domain of paid search advertising specialists. The better we work on our campaigns, the lower the cost per click we get; the better we optimize the campaigns, the higher the quality score, the more clicks at a given price we can get without paying too much.

Our goal is to determine how much we can change the cost-per-click and conversion rates so that the advertising campaign pays off. Moreover, the CPC and conversion rates from the media plan sheet are ready-made KPIs of the paid search advertising specialist.

A lot of things surely depend on the website owner. In one of the projects of the Netpeak agency (I can't disclose the name due to the NDA), the conversion rate increased by 30% after the website loading speed was optimized.

You can check the dynamics of your paid search advertising and, if anything happens, recalculate the media plan. Especially if you see that some indicators cannot be achieved.

Let's repeat what we discussed earlier. A PPC specialist can:

After calculating this data and compiling a media plan, you can run advertising campaigns and collect statistics.

I have analyzed the results of one of the online store advertising campaigns:

We see that even according to the results of the first month of operation, our return on investment (ROI) amounted to almost 5%. What to do next? Either work on increasing advertising expenditures and the number of transactions or work on the cost-per-click and conversion rate to earn more from each transaction.

What to do if you are promoting not an online store, but an online project where nothing is sold on the website and your goal is just a lead? Essentially, there are no differences, everything is the same. The main goal is profit anyway, and we can calculate this profit in the same media plan calculation sheet (see the "Service media plan" sheet).

The table above shows a real case of promoting a service for selling car spare parts in St. Petersburg. We already see how much we can reduce the cost-per-click in order to generate profit and not fall out of the auction.

With that client, we have configured the end-to-end analytics, listened to all the calls and found out that only 6% of all leads converted to sales. That is, even an increase in the conversion rate will not significantly affect profits since the work of programmers will cost a lot of money.

According to the table, it is clear that if the business owner does not work on their proposal, if managers do not convert leads better, the project will never reach the payback level. A bottleneck may not be in paid search advertising at all.

If you are generating leads, consider implementing end-to-end analytics so that you understand at what step you might have issues.