In our last article we covered customer life-time value where we discussed how digital marketers can build a strategy not just to measure CLTV, but also to impact it in a myriad of ways. This time we want to dive deeper into how marketers can use PPC to impact CLTV. Pay-Per-Click (PPC) advertising has revolutionized the way businesses interact with their audiences, but businesses must understand that PPC is not just a tool for driving traffic; it’s a powerful medium for engaging customers and building lasting relationships. In fact, the Interactive Advertising Bureau (IAB) reports that businesses leveraging data from PPC campaigns see a 33% increase in customer engagement. We’ve compiled 8 ways in which PPC can engage with customers and increase CLTV:
  1. Value-Focused Structure
Account structure sets the foundation for targeting, setting budget and setting goals. The right structure also allows for content customization. Segmenting campaigns by their potential value vs. putting everything together means the marketer can dedicate a higher budget and a lower ROAS goal (or higher CPC limits) to the high CLTV campaign knowing that any conversion whether on the first purchase or repeated purchase will result in a higher return.
  1. Value-Based Bidding
B2B or e-commerce, value-based bidding should be the goal for everyone. Not all leads are equal, so they should be treated differently. Assigning a value to type of action or user identity (like company size, job title) will help the algorithm optimize towards higher value customers. A case study conducted on Kia showed that value-based bidding resulted in 20% more value and 10% lower CPA.
  1. Targeting High-Value Customers
By using PPC, a business can target customer segments that have historically shown higher CLTV. For example, if data analysis reveals that customers from a certain geographic region or demographic group tend to make repeat purchases, PPC campaigns can be focused on these groups.
  1. Remarketing and Retargeting
Remarketing campaigns are highly effective in increasing CLTV. Google Ads reports that remarketing campaigns can boost ad response up to 400%. By targeting users who have already interacted with your brand, especially those who made a purchase, you can encourage repeat purchases. This must be done appropriately by identifying the most relevant product and timing to truly make an impact. One forgotten tactic is to engage your current/past customers with more than just another purchase request or branding. For B2B clients this could mean providing relevant content without asking for anything in return.
  1. Cross-Selling and Upselling Through PPC
According to Gitnux, Businesses that adopt cross-selling can experience from 30% to 50% increase in customer lifetime value. Businesses that fail to use PPC to promote complementary products or higher-tier services to existing customers are leaving money on the table. For instance, if a customer purchased a basic version of a software, a well-targeted PPC ad can promote an upgrade to a premium version.
  1. Personalized Quality Ad Content
Personalization can significantly impact CLTV. According to a study by Adobe, targeted and personalized ads can lead to a 50% increase in conversion rates. Dynamic PPC ads that change based on user search history, interests, or past interactions with the brand can lead to more effective engagement. The ad quality does have a large bearing on performance. Video and interactive ads invite higher engagement. For example: Facebook states that video ads have a 27% higher click-through rate and 34% higher web conversion rates than other advertising formats.
  1. Improving Customer Experience Through Feedback
According to Bain & Company, improving customer service can lead to a 25-95% increase in CLTV. PPC can be used to gather customer feedback, which is an additional way to engage with its customer base and can then be used to improve products or services, thereby increasing customer satisfaction and CLTV.
  1. Seasonal or Event-Based Targeting
Tailoring PPC campaigns to align with seasonal events, holidays, or customer life events can increase customer engagement and repeat purchases. For instance, targeting customers with special offers around their birthday month can enhance CLTV. At its core, PPC is an advertising model where businesses pay each time their ad is clicked. It’s not just about driving traffic, but about reaching the right people at the right time. From simple search ads to sophisticated programmatic and retargeting campaigns, PPC has evolved. No longer confined to the realms of mere traffic generation, PPC can play a pivotal role in driving meaningful customer engagement. Harnessing the full potential of PPC means understanding its nuances, staying abreast of the latest trends, and continuously optimizing for better engagement. Today, it’s about delivering personalized experiences to users who are most likely to engage with your brand.