PPC Budget and ROI Management Flashcards
6 cards from real PPC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 PPC Budget and ROI Management flashcards as text
What is the 'customer lifetime value (CLV)' and how does it influence PPC bidding decisions?
Answer: CLV estimates total revenue from a customer relationship; a higher CLV justifies a higher CPA target
Understanding CLV allows advertisers to set CPA targets above the first-transaction profit because the long-term relationship value justifies higher acquisition costs.
What is a 'blended CPA' in PPC reporting?
Answer: The average cost to acquire a customer across all marketing channels, not just paid search
Blended CPA measures the cost to acquire a customer when you combine spend and conversions from all channels (paid search, social, display, email) rather than reporting each channel in isolation.
How does seasonality affect PPC budget planning for US-based advertisers?
Answer: CPC and CPA typically increase during peak seasons like Q4 due to higher advertiser competition
During peak periods like Q4 holiday season, more advertisers bid on the same keywords, driving up CPCs and often raising CPAs, requiring larger budgets or earlier campaign scaling.
What is a 'target CPA' and how is it calculated as a PPC goal?
Answer: The desired average cost per conversion calculated from acceptable profit margins or business goals
Target CPA is derived from your unit economics — typically calculated by multiplying product margin by an acceptable marketing cost ratio — to set a maximum acceptable conversion cost.
What is 'budget reallocation' in the context of PPC portfolio management?
Answer: Moving ad spend from underperforming campaigns to higher-ROAS campaigns to improve overall portfolio efficiency
Budget reallocation optimizes overall portfolio performance by redirecting funds from campaigns with poor ROI to those delivering stronger returns, maximizing total revenue or conversions from the same total spend.
What is the impact of increasing daily budget on a campaign that is NOT budget-constrained?
Answer: It will have minimal effect because the campaign already has more budget than it needs
If a campaign consistently underspends its current daily budget, adding more budget will not increase performance since the constraint is something other than budget, such as audience size or bid competitiveness.