Fact: Over 70% of small business owners who outsource  the pay per click management (Google AdWords, Yahoo Search Marketing, Bing AdCenter), are dissatisfied. The reason why? Lack of education and/or expectations being set at the point of sale.

Here’s how it works…

Let’s say your Google AdWords budget is currently set at $1k/ mo. You decided you were tired of managing it yourself and besides, you’ve connected with a local advertising company who has shown you some pretty cool and useful tools to measure your ROI while promoting themselves at top dogs. You sign up – what’s next?

Typically, if the  outsourced PPC Management firm doesn’t charge you a management fee the typical scenario is they take a ‘small percentage’ of your budget. What they fail to disclose in most cases is that ‘small percent’ is anywhere from 25% to 50% of your  budget, not to mention they up-charge your cost per click.

With a $1,000/mo PPC Budget, what can you expect your  cost-per-lead to average out to?

It’s simple; let’s do the math in a ‘best win’ scenario.

• You invest $1K/mo to outsourced PPC Management Company
• They take 25% leaving you with $750 actual spend on PPC Campaign.
• The Average CPC within the home service industry is around $7/click meaning you might capture 107 clicks.
• The average website converts @ 6%, on a good day = 6.42 calls
• Your Average Cost Per Call or Cost Per Lead is $155.76

Roofers, this might not sound to bad. Tree Care Specialist, Garage Door Contractors etc… if you’re considering outsourced PPC, your wasting your money period.

Here’s the official formula to determine what your cost-per-lead will be close to:

1. Monthly Budget (MB)*.25 = (AS) Actual PPC Spend After Management Fee
2. AS / $7 = (AC) Actual Clicks
3. AC * .06 =(ECV) Expected Call Volume
4. MB/ECV = ACTUAL COST PER LEAD