Where Should I Invest My Marketing Budget

Where Should I Invest My Marketing Budget? How Inbound Content Beats PPC & Other Avenues

Ever asked yourself, “Where should I invest my marketing budget?

What about this followup question?

“How much do companies spend on marketing that doesn’t work?”

Because, let’s be real –

Are you seeing results from your PPC (pay-per-click) ads on Google?

How about your Facebook ads?

If you’re like most ad buyers, the answer is almost always a shrug, a sigh, and a reluctant, “Well… no.”

That’s no coincidence.

The ROI of PPC alone is lower than low. (Sadly low. Ridiculously, hopelessly low.)

How low is it?

That’s what we’ll discuss today: Why PPC ads and similar avenues aren’t worth it, why there are better options, and exactly where you should invest your marketing budget.

(Hint: It starts with an “i” and ends with “-nbound.”) 🤫

Where Should You Invest Your Marketing Budget? The Truth About PPC vs. Inbound ROI

1. Marketing Budget Breakdown: What’s the Real Cost of PPC?

2. Marketing Budget Reality: The Return on Ad Spend (ROAS) for PPC Ads vs. the ROI of Inbound Content Marketing

3. The Inbound Marketing Difference

3 MORE Reasons PPC Ads Don’t Pay Off

  1. People Distrust Ads in General
  2. PPC Has a Steep Learning Curve
  3. Many PPC Experts Prioritize Numbers over Human Readers

Where Should I Invest My Marketing Budget? Inbound Is the Answer

Where Should I Invest My Marketing Budget

💰 Been throwing out loads of cash for PPC ads? And was it worth it? 🤔 If the ads in 2018 brought only 0.66x return on ad spend, then it's a 100% NO 🙅‍♂️🙅‍♀️. Where should you invest your marketing budget then? A: Inbound Content 🍯 Click To Tweet

Where Should You Invest Your Marketing Budget? The Truth About PPC vs. Inbound ROI

If you looked at a chart of marketing budgets by industry for 2018 or 2019, you would probably see a fair amount spent a chunk of money on PPC ads. Many probably prioritized PPC above building their organic search rankings.

This is a big mistake, and I want to show you exactly why.

1. Marketing Budget Breakdown: What’s the Real Cost of PPC?

The cost of PPC is easy to break down in surface terms. You bid for the specific keyword you’re targeting – the maximum amount you’re willing to pay every time someone clicks your ad. If your bid is the highest (and your Ad Rank is equally up to snuff), you’ll appear at the top of search results.

Here’s a visual of that from Wordstream:

However, for many highly competitive keywords, bidding can get insane.

For example, to rank at the top of Google with a paid search ad for a competitive keyword like “content marketing,” you would need to shell out $18 per click.

However, before you decide that would be totally worth the cost, look more closely at the click data in Ahrefs.

Clicks are currently going to only 4% of paid “content marketing” search results. Meanwhile, almost all the clicks (96%!) are going to organic search.

Let’s put that into perspective.

  • “Content marketing” has a search volume of 31K.
  • 48% of searches for this keyword ended in clicks (searchers clicked on one or more of the results).
  • That means about 14,880 people clicked a result in this SERP.
  • Only 4% clicked a paid search ad.
  • That means PPC ads are only getting about 595 clicks per month in this SERP. The lion’s share of the clicks (14,284!!) are going to organic search.

Very, very few people are clicking ads in search results like this one.

What's the real cost of PPC? So here's how it goes: you bid for your target keyword aka the max amount you'll pay per ad click. The highest bid gets to the top of search results. Easy. 🎰 BUT, its low ROI will shock you. 📉😧 Click To Tweet

To drive the point home, let’s look at another example of the low ROI of PPC ads.

A colleague recently sent me a case study from one of their clients with declining sales. Without naming names, my colleague looked at the client’s search data and conversion rates and found:

  • About 26% of their traffic was coming from paid search.
  • Roughly 17% was coming from organic search.
  • Their conversion rate for traffic from paid search was 0.27%.
  • Their conversion rate for organic search traffic was 51% – nearly 6x higher than paid search.

Imagine the ROI if this client switched gears and started focusing on improving their organic search rankings!

2. Marketing Budget Reality: The Return on Ad Spend (ROAS) for PPC Ads vs. the ROI of Inbound Content Marketing

The return on investment for paid search isn’t looking good.

But wait:

There’s more.

According to The Ad Strategist, the ROAS for Facebook ads (as part of a cold ad funnel, where cold leads are served ads based on their interests, etc.) has drastically dropped within the past 1-2 years.

In 2016, ROAS hovered at a decent 11.88x. In 2018, ROAS dipped to a dismal 0.66x.

Display ad conversion rates have plummeted. Across industries, the average is 0.72% on mobile.

That means, if you spend, say, $450 on ads, you’d only get back 0.0066% of what you put into your campaign. With a 0.72% conversion rate, you would actually lose money. Your small business marketing budget statistics would look horrible.

That’s why inbound and content marketing are incredible in comparison.

Return on ad spend (ROAS) went from 11.8x in 2016 sliding down to 0.66x in 2018. 😡 The average ad conversion rate for mobile is 0.72%. 😱 These are the signs that you should change where you invest your marketing budget RIGHT NOW. 🏃💨 Click To Tweet

3. The Inbound Marketing Difference

On average, across industries, organic traffic from search converts at a rate of 16%. Thus, when you target organic traffic with inbound marketing, the ROI speaks for itself.

When you create content of amazing quality consistently, the stuff that speaks deeply to your target reader’s pains and problems (and solves them!), you can’t help but win.

I came up with a formula for predicting content marketing ROI a few years ago. Let’s compare it to the ROAS we discussed earlier.

  • Start with your average monthly traffic numbers. For the sake of the example, let’s say you get roughly 5,000 visitors per month.
  • To find the average number of traffic-to-lead conversions you could expect from content marketing, grab that average 16% conversion rate and get multiplying:
    • 5,000 x 16% = 800 leads/month
  • Now take your estimated leads and multiply by the average lead-to-sale conversion rate for content marketing, 14%, to estimate monthly sales:
    • 800 x 14% = 112 sales/month

Now, let’s say your average sale is about $10. That means you could expect $1,120 monthly in new sales as a direct result of content marketing.

When you compare the cost of content marketing to the ROI, it all makes sense.

So if you're wasting money on PPC, where should you invest then? Go for inbound marketing. Creating useful content for your target readers can bring in 🧑🏾‍🤝‍🧑🏻🧑🏿‍🤝‍🧑🏽 traffic ➡️ leads ➡️ sales (with an average close rate of 14%!) 🥂 Click To Tweet

For example, a Level 3 Blogging package from our Content Shop costs $1,000/month for 8 expert blogs at 1,000 words each, produced by a subject-matter expert and posted bi-weekly.

It’s pretty easy to do the math and see that you would still come out ahead, even AFTER outsourcing the content creation part (which, by the way, most marketers [84%] do, according to Content Marketing Institute’s most recent B2B report).

*TV infomercial announcer voice* 🎤 But that’s not all!

Content marketing comes in clutch at every stage of the buying process. No matter how close your leads are to buying (or far away), content helps you do everything. It builds brand awareness and secures, nurtures, and converts leads:

Last but not least, let’s pull in a really fun example to go out with a bang: 💥

(Disclaimer: This is an extreme marketing budget example.)

How does the average cost of a Super Bowl ad compare with the cost of content creation for 2 years? (Hint: They’re not even close.)

The average Super Bowl ad costs $40,000 for 5 seconds of airtime. (Read: $5 million for one minute.)

For 2 years of expert blogging PLUS 1 year of EW’s social media plan, PLUS one written and designed ebook, PLUS four lattes from a coffee shop per week for 12 months (for this, you’ll have to rely on your local barista):

$37,000.

That’s 135x cheaper for nearly 200 blogs that will live on your site and compound in value over time. Many of them will still be relevant and draw in leads years from now. (Use that example in your marketing budget presentation if you want to get the boss’s attention!)

Meanwhile, in 2019, the Super Bowl drew in its fewest number of viewers in the past 11 years. If you watched, do you even remember any of the ads? 🤔

Me neither.

3 MORE Reasons PPC Ads Don’t Pay Off

If I’ve made my point clear, inbound content marketing is a better investment than PPC, hands-down.

“But PPC is faster,” you might object. “I want to see sales now, not later.”

Wait one minute, there, Speedy. PPC is NOT necessarily faster for bringing in traffic and revenue. Sure, it shoots you to the top of a SERP (IF you win a keyword bidding war), but your position at the top is shaky.

This is totally unlike if you earned your way to organic position #1 with solid, quality, user-satisfying content.

Why?

1. People Distrust Ads in General

Ad distrust (especially distrust of display ads) has been mounting in recent years. It’s something you can’t ignore if you’re considering ads for your marketing strategy.

According to Edelman’s Trust Barometer Report, 74% of consumers say they avoid ads completely.

That includes:

  • Using ad blockers on websites
  • Changing their habits to see fewer ads
  • Finding ways to avoid ads
  • Paying for streaming services to skip most commercials and TV ads
PPC might be faster but consider this: More people distrust and avoid ads. 🙈 They use ad blockers and pay for streaming services just not to see a glimpse of it. Know other reasons why PPC don't pay off in this post by @JuliaEMcCoy Click To Tweet

Ad avoidance is common. That behavior isn’t limited to display ads or commercials, either. According to a Sprout Social study, 27% of consumers have a more negative view of social media advertising than they did one year ago.

The reason? 58% said they saw too many social ads and were just plain sick of it.

The nail in the coffin? Most people simply view advertisers as morally and ethically bankrupt, according to a Gallup poll. The profession of “advertising practitioner” is rated among the lowest for honesty and ethical standards.

Behold the myriad of reasons why paid search gets ridiculously fewer clicks than organic search. (Remember that 4% vs. 96% example from earlier?)

Bottom line: IF you go for ads of any kind, think long and hard about WHO might pay attention to them and WHY. In most cases, a better long-term marketing investment (and better ROI!) comes from content marketing.

2. PPC Has a Steep Learning Curve

Every new concept you encounter has a learning curve, but PPC ads, in particular, are not for the uninitiated. If you don’t know what you’re doing, you’ll probably get it wrong and waste money.

For Google Ads, they must conform to specific quality standards, keep under a certain length, maintain clarity and honesty, and more.

If you’re a DIY marketer with no pay-per-click ad experience, learning to be successful with it will take lots and LOTS of time.

Sure, PPC can be interesting to study and use to boost your online traffic -- if you're lucky to grab the keyword and audience you want.🐙 But if you're a DIY marketer, learning all the rules and best practices will take lots of time. ⌛ Click To Tweet

If, however, you decide to spring for a PPC expert…

3. Many PPC Experts Prioritize Numbers over Human Readers

The problem with PPC experts is they are numbers-driven. They have to be because they’re paid to get results for their customers… but, it turns out that’s a problem in itself.

When you’re so numbers-focused, you forget about the real humans on the other side of the screen.

For example, if you pay for PPC ads and you’re not getting highly visible spots on a SERP (or you’re not getting clicks), your expert may just say you need to increase your PPC budget.

But the issue isn’t with your budget. It’s with your content.

It’s what your PPC ads SAY – the wording – that encourages clicks.

Furthermore, if a potential customer clicks and discovers your content doesn’t match their search intent – well, say goodbye.

Even if you own the top paid spot, without content that meets or exceeds the user’s need, you’ll go nowhere.

And, let’s not forget many searchers simply skip over the paid results and go straight to the organic results underneath.

The problem isn’t with your PPC bidding. The problem is you need better nurturing strategies to pull in customers.

Really, let’s call a spade a spade. Where should you invest your marketing budget, if not with ads?

You need inbound for your digital marketing budget plan. 🤯

PPC experts can surely help bring in the traffic you've been aiming for. 🏹 However, this could be a problem itself when the work becomes simply obsessing over getting high numbers. 🤪 A click doesn't convert to a sale in a snap. 🖱️ Click To Tweet

Where Should I Invest My Marketing Budget? Inbound Is the Answer

If PPC and/or Facebook ads have left you high and dry, it’s not wholly your fault.

The industry is working against you. Expectations vs. reality are drastically different because the ad landscape has changed across the board.

Over and over, users are showing us what they want. We have to stop leaning into marketing tactics that used to work in favor of embracing what works now.

Today, people are tired of ads. They avoid them at all costs.

Today, organic search draws in traffic and leads through information sharing, nailing user search intent, and building trust. We can literally build our customer bases through honest, expert, authentic content.

Isn’t that amazing?

Where Should I Invest My Marketing Budget

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