Projecting PPC Spends & Metrics

This week Matt Umbro (@Matt_Umbro) came up with yet another great question set titled “Projecting PPC Spends & Metrics.” The following is the transcribed Streamcap from the live chat:

Q1: What is your definition of a PPC projection(s)? Why?

  • Any metrics that you or the client can use to help forecast and ultimately improve PPC performance. – Matt Umbro
  • PPC projections= Efforts + Output. – Sameer Hakim (@hakim_sameer)
  • Predicting future key metrics: clicks, conversions, revenue, etc. – Melissa Mackey (@Mel66)
  • Usually trying to estimate the net effect an optimization may have. Ex. Ad copy testing on CTRs, Ad extensions on Ad rank. – Vamsi Ponada (@Vapo1126)
  • Based on estimated search traffic, costs and manpower, these are the main traffic metrics we can hope to achieve. – Joe Martinez (@MilwaukeePPC)
  • A numbers based statement about the future. – Richard Fergie (@RichardFergie)
  • Measuring the future based on historical performance. Usually for budget planning. – Zach Griffith (@ZachGriffith)
  • Projecting future activity, largely based on the data / performance you’ve already accumulated. – Leo Sussan (@lsussan)
  • Prediction of month-end metrics based off of current performance so we can get ahead of lag metrics. – Heather Cooan (@HeatherCooan)
  • An estimation of month end performance based on current trends. – Michelle Morgan (@michellemsem)

Q2: Do your clients ask for PPC spend and metrics projections? Do you provide? Why or why not?

  • Yes and yes – required for billing purposes. – Melissa Mackey
  • We provide them. That way everyone can keep on the same page about opts. – Heather Cooan
  • Yes and sometimes. Useful tool for discussing plans. – Richard Fergie
  • Depends on the client, but most like to see where things are going from an investment and return perspective. – Zach Griffith
  • Yep, give them both. Gives an idea of input and output levels. – Michelle Morgan
  • Spend projections, yes. Metrics projections: rough estimates if asked. – Timothy Jensen (@timothyjjensen)
  • They usually like to see a very-broad estimate based on their biggest areas of business. Helps them plan budgets. – Joe Martinez
  • Yes, and I do. You can very accurately estimate spend based on Average CPCs and CTR. – Leo Sussan
  • Yes & Esti. Helps client understand my strategies in numbers and help’ him allocate budget & help him prepare his inventory for later. – Sameer Hakim
  • I will provide projection data, but make sure they know that there is a big grain of salt. – Matt Umbro
    • For sure. Always know it’s an *estimate*. Past performance isn’t a guarantee of future success. – Michelle Morgan
    • You never want a client to become too reliant to the projections and hold you to them – goals are fine, but projections vary. – Matt Umbro
      • What would you say the difference is between a projection and a goal in this case? e.g. if I say “increasing spend on remarketing by X% will deliver $$Y” is that a goal or projection or both? – Richard Fergie
        • Good question, I guess I consider a goal to be based more on historical data (year over year) and current trends. Projections are based upon tools & act as guides for account management- goal is really what you’re striving toward. – Matt Umbro
        • To me, a goal is client-driven; a projection comes from us. – Melissa Mackey
        • My opinion is that a goal is something to aim for, where is prediction is something we think will be. Eg Goal is aspirational. – Josh Devlin
        • To me projection. Guess of perf based on past stats. If client asked for $X CPA for rmktg that’s a goal. – Michelle Morgan
        • Goal is where you want to be. Projection is data driven. – Ryan Mower (@ryandmower)
        • Consensus on projections vs goals semantics seems to be that projections are from us, goals from clients. – Richard Fergie
        • Goals = if everything goes perfectly! Predictions = best case scenario based on current data. – Vamsi Ponada
        • I also feel like projections don’t involve emotions and external factors as much as goals do. – Matt Umbro
        • And projections show how we’re pacing on current goals. – Michelle Morgan
  • Only all the time! Yes, always do, but I always tell them that figures could vary a lot. Adwords has proven me wrong many times. – Vamsi Ponada
  • Projections could be more useful on a budget limited account when pitching to increase budget. – Josh Devlin (@JayPeeDevlin)
    • 100% Agree. We have B2B clients who are more stingy on monthly budgets. Projections help ease that unknown. – Joe Martinez
  • Goals are hard set based on old data, projections are forecast of how you will create new data. – Sameer Hakim

Q3: Where does your PPC projection data come from? Why?

  • I prefer use logarithmic scatter plot forecasts to show clients the tradeoff between Volume (conv or Rev) and Efficiency (ROI). – Matt Wilkinson (@WilkinsonSEM)
  • This can vary. Can depend on what the client is using to track other digital channels to be as consistent as possible. – Amy Bishop (@Hoffman8)
  • Use all relevant performance and cost points from AdWords, Bing, & revenue numbers from GA. Sometimes outside lead systems. – Michelle Morgan
  • Historic data, Current performance, Seasonality etc. – Ashwin Chandra (@ashwin_chandra)
  • Historical YoY metrics and seasonality trends. Also, hoping to integrate Steady Budget’s predictions soon. – Nicole Mintiens (@Tregesy)
  • Past 7 days and month to date actuals on all major metrics, all channels. – Heather Cooan
  • Past performance & guessing. – Richard Fergie
  • Traffic estimates come from the independent platforms. Revenue / Conversion metrics from Marin. – Leo Sussan
  • Pulling in Google Trends data is a great way to align on expectations. Demand for anything is finite and it is either up/down. – Matt Wilkinson
  • All of the typical KW tools around. Plus information based on similar industries or what we’ve seen from similar, past clients. – Joe Martinez
  • Old Data + Goals set + current trends. – Sameer Hakim
  • Ad platform data combined with analytic data. Typically calculated in a custom bad to the bone Excel spreadsheet using dumps. – Zach Griffith
  • Current run rate helps a lot. We can calculate the projected run rate based on the goals for the month. – Ashwin Chandra
  • Historical data if I have it b/c its the most accurate data I have.Kwd planner and the other tools rarely give me accurate data. – Vamsi Ponada
  • Also always include notes. What happened & what’s next. Hopefully we’ll have a call but still never know who it will be FWD to. – Amy Bishop

Q4: Do you find metrics like lost impression share valuable when providing projections? Why or why not?

  • If I’m making a projection to try and get more budget then lost IS v useful. – Richard Fergie
  • Usually no. Only if we’re trying to scale will I discuss IS. Mostly just use it for my optimization decisions. – Michelle Morgan
  • If I’m projecting to get $ for something new (e.g. retargeting) then less so. – Richard Fergie
  • I think there is value for capped budget clients in reminding them of impact that has on possible traffic. – Kirk Williams (@PPCKirk)
  • Never have. Only use them to show opportunity on areas we can improve or new areas to go after. – Joe Martinez
  • Depends on the projections and the goals. Usually no but maybe if we need to make a case for budget and IS is bad. – Amy Bishop
  • Sometimes…The accuracy is pretty weak, so saying ESTIMATE at least three times during delivery is key
  • Lost IS due to budget can be telling, IS lost because of ranking there are other factors. – Maria Corcoran (@mariacorcoran)
  • Q4.1: Does anyone utilize their own metrics for projections? How so?
    • Not really – my projections are hard enough to understand anyway without me making new stuff up. – Richard Fergie

Q5: How much stock do you put into PPC projections?

  • How the projection was made, what is being projected, how long the projection is for, the agenda of the person making the projection and whether or not I trust them. – Richard Fergie
  • As said before, it is too dynamic but again if the numbers have been committed to the client then you got to run behind it! – Ashwin Chandra
  • Monthly Budgets: At the beginning of the month, not so much. Week 3 and on, quite a bit. – Zach Griffith
  • Coming from an in-house point of view, execs could care less about projections. They want conversions & don’t care how they come. – Ryan Mower
  • My month-ends are pretty accurate given current pacing. But I use them to guide opts to get my month to close how I need it to. – Heather Cooan
  • Whether I agree with the guesswork on external factors included in the projection. – Richard Fergie
  • Very little. Account is going to change very frequently. And if goals ever change then original projection is almost worthless. – Joe Martinez
  • Little. Projections depend of volume, which depends on CTR, CPC, QS, trends & seasonality… so many variables. – James Svoboda (@Realicity)
  • Depends on what is being projected and for what time frame. Shorter time frames with stable accounts should be pretty accurate. – Amy Bishop
  • Very little.There are tons of other factors that effect numbers that you have no control on but the client still wants it so. – Vamsi Ponada
  • Decent. They are interim milestones. They will only change when you do an action <-> based on the projections given in past. – Sameer Hakim
  • I think the consensus is that PPC projections can be worthwhile but aren’t the be all end all. – Matt Umbro

Q6: Is there a downside to presenting PPC projections? Why or why not?

  • Many have already brought this up, but downside to projections is that they are estimates so expectation mgmt is essential. – Kirk Williams
  • Most of the time the client takes your numbers as if they’re written in stone which can bite you in the a** later on. – Vamsi Ponada
  • Projections do help me in driving the results though. It sets up the expectations and drives to give performance. – Ashwin Chandra
  • Definitely. It can set the wrong expectation. No matter how many grains of salt you bring up first impression is hard to change. – Joe Martinez
  • As long as it’s clear they’re projections & not guarantees, it’s fine. Sometimes clients take them as guarantees though. – Melissa Mackey
  • If you’re not clear, projections can be taken as a promise of performance, which isn’t true. They’re just for gauging performance. – Michelle Morgan
  • No downside here. Just act like that dude from ancient aliens…Use “possibly”, “could be” & “estimates” and you’re good to go. – Zach Griffith
  • Repeat- Projections are not goals. They are the tracks not the station/train. – Sameer Hakim

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Don’t forget to stay tuned for the next #PPCchat on Tuesday at 12 noon Eastern, 9 am Pacific and 5pm in the UK. Same Chat time, same Chat channel.

Participants

Check out the PPCChat Twitter list to see and connect with all current and prior participants.

• Matt Umbro (@Matt_Umbro)
• James Svoboda (@Realicity)
• Paul Kragthorpe (@PaulKragthorpe)
• Amy Bishop (@Hoffman8)
• Ashwin Chandra (@ashwin_chandra)
• Heather Cooan (@HeatherCooan)
• Joe Martinez (@MilwaukeePPC)
• Josh Devlin (@JayPeeDevlin)
• Kirk Williams (@PPCKirk)
• Leo Sussan (@lsussan)
• Maria Corcoran (@mariacorcoran)
• Matt Wilkinson (@WilkinsonSEM)
• Melissa Mackey (@Mel66)
• Michelle Morgan (@michellemsem)
• Nicole Mintiens (@Tregesy)
• Richard Fergie (@RichardFergie)
• Ryan Mower (@ryandmower)
• Sameer Hakim (@hakim_sameer)
• Timothy Jensen (@timothyjjensen)
• Vamsi Ponada (@Vapo1126)
• Zach Griffith (@ZachGriffith)
 

Projecting Streamcaps….I’m projecting that next week we’ll have at least 1 more streamcap.

This is a guest post by Paul Kragthorpe; WebRanking Director of Technology in Minneapolis, Minnesota, #PPCChat Streamcap Grabber, SEO Blog Author. Connect with me @PaulKragthorpe, and Google Plus.

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