Paid Search
Cost Per Call Is the Only PPC Metric That Matters
For a local service business, clicks, impressions and click-through rate are diagnostics. Cost per call is the PPC metric that tells you whether the account is working.
Last year a contractor showed us a report with an 11% click-through rate, an average position near the top, and a quality score of 8. Everything was green. He couldn’t name a single job that had come from it.
Every number in that report was real. He wanted to know whether the money was coming back, and nothing on the page told him.
Build the chain backwards
Start from what you want and work back toward what you buy.
- Revenue: what a closed job is worth to you
- Close rate: how many quotes become jobs
- Qualified call rate: how many calls come from real prospects once you drop wrong numbers and sales pitches
- Cost per call: what you paid to make the phone ring
Multiply up the chain and you get the number that decides everything: what you can afford to pay for a call. Say a job is worth $4,000 in gross profit, you close one in four quotes, and two in three calls are real. A call is then worth roughly $650 to you. At a cost per call of $80 the account is doing very well. At $700 it’s leaking money.
Most owners have never run this arithmetic. Without it they have no threshold, and they tell good months from bad ones by feel.
Without a target cost per call, every PPC decision comes down to opinion.
You have to track calls
Most accounts fall down here. Form fills get tracked because Google makes it easy. Calls make up most of the leads for local service businesses, and they often go uncounted.
- Call extensions with call reporting: Google’s own, free, and it counts calls placed from the ad
- A dynamic number on the website: it swaps the displayed number for visitors who came from ads, so calls from the site get attributed too
- A minimum call duration: an eleven-second call is a wrong number. Set the threshold at sixty seconds and the count starts to mean something
Skip the duration threshold and cost per call looks far better than it is. Wrong numbers and robocalls count as conversions, and the account optimises toward whatever produces them. The number improves while the business gets nothing.
What the other metrics are for
They’re diagnostics. Once you know cost per call is off and you need to find out why, they’re useful.
| Metric | What a bad value tells you |
|---|---|
| Click-through rate | The ad doesn’t match the search. Either the keywords are wrong or the copy promises the wrong thing. |
| Cost per click | The term is competitive, or a low quality score is raising your price. Check relevance before you blame the market. |
| Conversion rate | The clicks are fine and the landing page is losing them. Usually the page is generic or the phone number is buried. |
| Impression share | You’re capped by budget or bidding too low, and missing searches you could win. |
Work through them in that order when something’s wrong.
Where cost per call quietly goes wrong
The cheap call that never buys
Some search terms bring in calls at half the usual cost and close none of them, because the people searching are shopping on price or can’t make the decision. Optimise purely on cost per call and the account drifts toward exactly those terms. Track close rate by campaign if you can, even roughly, and be willing to pay more for calls from terms that turn into jobs.
Seasonality read as performance
For most trades, cost per call moves with the season. If you compare March to January and declare victory, you’ve compared the weather. Compare against the same month last year.
The call that the office did not answer
This one is uncomfortable. Call reporting shows missed calls, and it’s common to find that ten to twenty percent of paid calls went unanswered at lunch, after five, or on a busy afternoon. You paid for every one of them. Fixing who answers the phone often brings the best return of any change in the account, and it doesn’t cost a cent of ad budget.
We set up call tracking on every paid search engagement before the first ad runs. Without it, nobody can tell whether the account is working.