How to Build a Quant Model for Streamlined PPC Customer Acquisition?

Read time: 4 minutes.

Welcome to the 33rd edition of The Growth Elements Newsletter. Every Monday, I write an essay on growth metrics & experiments and business case studies.

Today’s piece is going to 5100+ founders, operators and leaders from businesses like Shopify, Google, Sage, Hubspot, Servcorp, Zoho, Apollo & more.

Happy Monday!

Pay-to-play channels are one of the fastest ways to validate acquisition channels, growth hypotheses, and customer profiling.

However, navigating the complexities of optimising PPC campaigns in a data-rich environment demands a quantitative approach, and this is precisely where a quant model becomes crucial.

Let’s understand the PPC landscape, how to build a quant model and its benefits.

Pay-To-Play Landscape

Operating on a bid system, growth marketers bid for ad visibility when users search for specific keywords.

The challenge lies in balancing - bid amounts, ad relevance, and landing page experience to maximise ROAS.

Essential Components of a Quant Model

[1] Keyword Analysis

[2] Bid Management

[3] Conversion Tracking

[4] Cost per Acquisition (CPA) Calculations

[5] Quality Score Integration

Building the Quant Model

[1] Data Gathering

Begin by collecting historical PPC data:

• CTR %

• Conversion rates %

• CPC and other relevant metrics

Granular data sets the stage for a robust quant model.

[2] Statistical Analysis

• Apply statistical methods to analyse the collected data.

• Techniques like regression analysis unveil correlations between variables, aiding in identifying patterns and trends.

[3] Rule-Based Script Development

• Develop a script that incorporates insights gleaned from data analysis.

• These scripts should dynamically adjust bids based on real-time performance data.

[4] Automation Tools

• Leverage automation tools and scripts provided by PPC platforms.

• These tools can execute bid adjustments as per the parameters set by your quant model.

[5] Continuous Optimisation

• A quant model is not static.

• Regularly reassess and optimise it based on the following:

  1. Changing market conditions

  2. Consumer behaviour

  3. Performance of your PPC campaigns

Benefits of a Quant Model for PPC

[1] Efficiency

Streamlining bid management and budget allocation enhances the overall efficiency of your PPC campaigns.

[2] Precision Targeting

A quant model enables resource allocation to keywords driving meaningful conversions, ensuring PPC efforts align with business objectives.

[3] Cost Savings

By avoiding overspending on underperforming keywords, your PPC budget is utilised more effectively, resulting in cost savings.

[4] Scalability

The quant model adapts to data patterns and market dynamics changes, ensuring sustained effectiveness as your business grows.

Takeaways

1. In conclusion, building a quant model for your PPC channel is crucial to streamlining the acquisition process.

2. It transforms PPC from a manual, labour-intensive process into a data-driven, strategically optimised asset for customer acquisition.

That's it for today's article! I hope you found this essay insightful.

Wishing you a productive week ahead!

I always appreciate you reading.

Thanks,
Chintan Maisuria