The cost of PPC Marketing in the HVAC industry can be unforgiving.
When HVAC Contractors finally take the leap to advertise online, they often hit a brick wall when their first realization is how expensive the cost-per-click can be.
We have a hypothesis as to why the HVAC cost-per-click is so costly.
In this blog post, we are going to brush up on our HVAC PPC fundamentals, as well as our intuition and experience as to why some of the costs can be inflated.
What is HVAC Pay-per-click (PPC)?
Pay-per-click advertising is a type of digital marketing strategy that can be tailored specifically to your HVAC business. This strategy revolves around the use of Google Ads and other similar platforms, where advertisers only pay a fee each time their ad is clicked.
For this particular article, we are using Google Ads as the platform of choice.
The Pay-per-click operates on a bidding system, allowing HVAC businesses to bid for ad placement in a search engine’s sponsored links when someone searches for a keyword related to their business offering. For instance, if an HVAC company bids for the keyword “AC repair,” their ad might show up in the very top spot on the Google results page when someone searches for this term.
Now, how does this relate specifically to the HVAC industry?
- Targeted Advertising: PPC allows HVAC companies to reach a specific audience based on location, the time of the day, the day of the week, and more. These companies can target potential customers who are likely to need their services. For instance, they might target homeowners within a certain radius during summer, when AC repairs and replacements are most common.
- Immediate Results: Unlike HVAC SEO strategies that take time to build and bear fruit, PPC campaigns can bring immediate results. If a heatwave hits and people’s AC systems break down, they’re going to need immediate help. With a well-timed PPC campaign, HVAC companies can get their services in front of these potential customers right when they’re needed.
- Trackable Metrics: With Google Ads, HVAC businesses can track exactly how well their PPC campaigns are performing. They can see how many impressions their ads are getting, how many clicks they’ve received, and most importantly, how many of those clicks are turning into calls, appointments, and actual sales.
- Budget Control: PPC campaigns provide the flexibility to control the advertising budget. HVAC companies can set a maximum bid for their ads, ensuring that they only spend within their means. They can also adjust their budget based on the season and expected demand.
- Competitive Advantage: Many HVAC services are local, meaning companies are often competing with other local businesses for customers. With PPC, businesses can gain a competitive edge by getting their services in front of potential customers first.
Understanding the Dynamics of PPC: A Supply and Demand Perspective
Let’s break down the fundamental mechanics of Pay-Per-Click advertising. The concept of PPC might seem technical, but it’s actually tied very closely to the basic principles of supply and demand.
In the paid advertising marketplace, the ‘supply’ actually corresponds to the volume of search queries for HVAC services in a specific area. When homeowners are searching for services such as “AC repair near me” or “heating service in [city],” each of these searches contributes to the overall ‘supply’ of potential ad impressions.
On the flip side, the ‘demand’ comes from the HVAC contractors who are competing for visibility on these search queries. Their bids in the pay-per-click auction determine how much of the ‘supply’ they can secure for their ads.
After managing hundreds of PPC campaigns throughout the country…
When we run digital marketing campaigns for HVAC contractors, we start by conducting market research in their service area in order to measure the search volume and the competition.
If the company already has an existing Google Ads account, we also conduct an audit to understand where they are in their digital marketing journey. Sometimes we find professionally built and managed campaigns, but more often than not we find disasters.
This is important because these disasters add to the high cost of everyone’s paid advertising.
But how do these PPC disasters happen?
- When You Take Google’s Bait
Much like sport betting websites and casinos offer new sign-up bonus bets, Google Ads offers a $500 credit to new advertisers after they spend their first $500.
That’s not a bad thing!
The credit is in fact very generous, and when spent wisely, it can generate new HVAC clients for you with “free” money.
But the $500 credit also injects another $1,000 into the PPC ecosystem, which essentially creates more competition and inflation of the cost-per-click.
When there is less demand for certain keywords, the cost is lower. But when demand and competition are high, then the cost is simply higher.
Additionally, when taking Google Ads’ intro offer, the system prompts users to build a “Smart” campaign with an “Express” account.
Again, that’s not a bad thing!
There’s a time and a place for all internet strategies, and some users have found success with those campaign types.
However, “Smart” campaigns will bid very loosely on broad keywords without much of your input, and this essentially adds to the cost-per-click inflation.
- When You Are Just Wingin’ It
Similarly to taking the initial Google Ads bait, some users are very bullish and are willing to throw everything at it and see what sticks.
This is a very short-sighted approach to digital advertising, but it does happen and it is part of the ecosystem.
Again, the more business owners are willing to spend on the bidding war, the higher the cost becomes for everyone.
An example of this would be a person aiming to target the keyword “AC repair Atlanta” not knowing that they’re bidding for HVAC and Automobile AC repair, both at the same time, both with no real parameters or structured strategy.
- When HVAC Campaigns Are Not Structured by Service or Seasonality
There can likely be an overlap of all three issues, but let’s dissect #3 a little further.
The average transaction value of an HVAC service call is substantially lower than the average transaction value of an HVAC installation.
So why are some advertisers willing to pay the same amount for both?
The answer is likely because they do not know the difference.
This happens when a person that is not a PPC professional is running the advertising campaign, or when a person that does not understand the nuances of the HVAC industry is managing the campaign.
In our opinion, you need to have the technical skill to run profitable campaigns, along with industry-specific knowledge.
So to our previous points, if an advertiser is willing to $50 for a click due to the “easy” money given by Google’s ad credit, or just feeling bullish and wingin’ it, then the advertiser is not structuring their campaigns in a way that the bidding is actually particular to their service.
Therefore, this advertiser may be willing to pay $50 for a “repair” call, meaning that you now have to compete with someone who’s running a race to the bottom.
This Can Be Your Strength and Your Opportunity
The unavoidable market dynamics of Google Ads will remain there.
I’m not trying to frame Google Ads as the bad guy, but think about it…
They’re willing to inject $500 into the market for every advertiser that puts $500 of their own funds. This creates more competition and therefore more advertiser demand for certain keywords, which makes the cost per click more expensive, which then comes back into Google’s pockets.
Very clever.
But that’s OK too. Because Google Ads has also proven to be a platform for business growth unlike any other.
Dominate the real estate on the search results and grow your business.
There are thousands of HVAC companies nationwide that have scaled their business by finding success with Google Ads, and that can be you as well.
Structure Your HVAC PPC Campaigns More Efficiently
Do not include all HVAC keywords in one campaign.
Treat each particular service differently, with its own budget and individualized attention.
Work out your numbers and determine how much you are willing to pay for a regular service call as opposed to a new system installation.
This is a helpful resource to determine your break-even cost per lead. Based on that, you can work your way to your ideal cost per lead.
You Do Not Have To Compete With Everyone for Everything
It’s OK to pass on some opportunities.
In fact, you can become an HVAC-keyword sniper and run more effectively.
However, understand that you’re also tying machine learning down by being so strict, so striking the right balance is often better than being overly rigid.
Use Negative Keywords to Your Advantage
One powerful strategy that many advertisers overlook is the use of negative keywords. Negative keywords are terms that you can add to your PPC campaign to exclude your ads from appearing in search results that include those terms.
For instance, if you’re an HVAC contractor that doesn’t service car AC systems, you might add “car” or “automobile” as a negative keyword to avoid wasting your budget on irrelevant clicks. This can help streamline your spending and ensure that your ads are only shown to the most relevant, highest-converting audiences.
Leverage Seasonality
Seasonality is an important factor in the HVAC industry, with certain services being more in demand at different times of the year. To capitalize on this, you can adjust your PPC advertising budget throughout the year to correspond with these shifts in demand.
During the peak summer and winter months, when demand for AC and heating repairs is highest, you could increase your budget to capture more leads. Conversely, during the slower spring and fall seasons, you could reduce your spending or focus on less competitive keywords.
Contradict the Point Above, and Leverage Seasonality in Reverse!
While it’s beneficial to adjust your PPC strategy according to HVAC seasonality, don’t dismiss the off-peak seasons. The quieter periods still have search volume and potentially less competition, offering a chance for your ads to stand out at a lower cost per click.
For example, if a heating system breaks during spring, an off-peak season for heating services, your ad could still attract the homeowner seeking repairs. Additionally, promoting preventative maintenance or early bird deals during these periods could attract homeowners looking to prepare for the upcoming season.
In essence, while peak seasons naturally bring higher demand, off-peak seasons are far from a wasteland. With a strategic PPC approach, you can turn these quieter times into profitable opportunities, ensuring your HVAC business stays busy year-round.
Don’t Overlook Local SEO
While PPC advertising can certainly be effective, it’s not the only way to increase visibility online. Local SEO can be a cost-effective way to improve your ranking in organic search results and reach potential customers in your local area.
In fact, improving your local SEO is one of the low-hanging marketing fruits we encourage every contractor to implement.
Ensure that your business is listed in all relevant online directories, and optimize your website for local search terms. Remember, many customers will look at more than just paid ads when they need an HVAC service. They’ll also consider the organic search results, so it’s important to have a strong presence there as well.
Invest in PPC Management
If all of this sounds a bit overwhelming, it may be worth investing in a professional PPC management service. These experts can help you navigate the complexities of PPC advertising, avoiding common pitfalls and making the most of your budget.
In the spirit of full transparency, we obviously have a vested interest in sharing this advice with you. We believe in the power of effective PPC management and we’d be thrilled to have the opportunity to demonstrate this by working with you.
While this will come at a cost, the return on investment can be significant. A well-managed PPC campaign can drive a steady stream of high-quality leads to your business, helping you grow and succeed in a competitive industry.
