What does ppc stand for when we have channel saturation in marketing?

We live a life in which we're constantly exposed to content and advertisements. Think for a second how long you can browse any of the social networks you use on a daily basis without seeing an ad. It probably takes barely a minute before the first one appears. 

Well, with the boom of the digital era, the channels of diffusion have grown tremendously. Not only are there more channels (TikTok, Twitch, etc) but there are also many, many more users on each channel. 

This is beneficial, in a sense, because it allows us to reach our potential customers in a fairly simple way, but there are also more and more companies that are deciding to invest heavily in digital ads and this makes the competition even greater. 

What does this imply? Well, at some point, channels tend to become saturated and we have to become more and more competitive and strategic in order to maintain our growth with customer acquisition costs as low as possible. 

In today's article we are going to talk about PPC, a metric that we have to keep in mind when we decide to advertise in Digital Marketing. We will also provide you with some strategies that you can take forward when a communication channel is already saturated. 

Take note! We are sure that everything you will find here will be very useful. 

What is PPC in Digital Marketing?

PPC in Digital Marketing means Pay Per Click and it’s the most commonly used metric to analyze the results of our ads on the internet.

Whether we advertise on Google or on other platforms such as Facebook, for example, advertisers usually pay for each click a user makes on their ad.  Advertisers compete in an auction system. That is, the more effective your ad is in capturing the attention of your potential customer so that he clicks on it, the better your results will be and the lower the pay per click will be.

Being competitive when making ads on the Internet depends on multiple factors: the copy in the ad, how attractive the image is, the budget, the destination web page and of course how saturated the channel is, in which we are making our ad. 

What does it mean that a channel is saturated?

As we said at the beginning of this article, nowadays there are many digital channels but also many of them are full of ads. 

The reality is that when the possibility for companies to invest in Internet advertising was just starting, advertising in these channels was very cheap, precisely because there were not many competitors. Today, almost all companies worldwide have turned to the digital channel and invest millions of dollars in digital advertising. 

This has made many markets and channels saturated and therefore made PPC very expensive. If PPC is very expensive, of course it also makes CAC and CPA more expensive and this limits greatly the growth of some businesses. Especially those businesses that have a very small profit margin. 

Let's see an example. Let's imagine that we have an online book selling business. When we started the business we decided to carry out acquisition marketing strategies only on Instagram.  Monthly we spent about 100 usd on Instagram ads and our PPC was 1 usd, and investing that money we sold about 50 books per month. At the same time we paid 40 usd to an agency for running the campaigns. 

Well, our CPA (cost per sale) was 2.8 usd. That is, for the 140 usd we invested in marketing (advertising + agency) we sold 50 books. Over time, we began to see that there were more and more book advertisers on the Internet and our PPC skyrocketed. Now investing 100 usd our PPC is 5 usd and we no longer sell 50 books per month but 30. The CPA doubles itself and therefore, our profitability is at stake.  

This is a simple example but it is to understand how to realize that a channel is saturated. It's not only because of the competition but also because we may have already reached the whole of our market (depending on the size of it of course) with our ad, and these are the moments when we have to look for new strategies.

What can we do if a channel is saturated?

We must clarify that most companies usually reach a limit in their growth. That is to say, it's very common that at some point they find the need to look for new strategies to improve their CPA or CAC. 

When we discover that a channel is saturated and our CPA is skyrocketing, we must look for alternatives to help us optimize this number. 

Some of these alternatives can be: 

1. Search for new channels to invest in 

For example, in the case of selling books through Instagram: if the ads on Instagram are no longer working, we can try generating content on TikTok and thus expand our reach. 

2. Make a new channel mix 

Maybe we discover that ads on Instagram are not as profitable as they are on Facebook, Google and TikTok. So we decide to drop Instagram and focus our investment 100% on the other channels. 

3. Organic growth strategies 

Another option may be to pursue organic growth strategies, such as a viral strategy. 

The goal of any of these strategies will be to try to keep growing while controlling acquisition costs. It's for these reasons that PPC in marketing is fundamental. It's a key indicator when it comes to understanding how our advertising campaigns are performing in the different channels and how saturated that channel is. 

However, there comes a time in every business when a growth limit is reached and it's necessary to expand the market or seek new horizons, but that is a topic for another article. 

We have come this far today and we hope that all the information has been clear to you. Share it with your colleagues! We are sure it will help them to continue to grow. 

And you, in which channels are you generating strategies for your business? We'll read you in the comments!

See you soon!