PPC Budget Cut Effects on Business

Butterfly Textile Co. is a B2B textile company that conducts e-commerce operations online. They sell raw fabric and silk products to other manufacturers. Chief Marketing Officer decided to cut marketing budget on June. They thought that direct and organic based sessions wil be enough for website’s session acqusition. Lets see the result of ppc budger cut effects on business more detaily below.

Despite a lot of efforts to increase organic and direct traffic after budget cuts, avg. direct traffic dropped 21.000 from 24.270 and avg. organic traffic dropped 57.248 from 58.350 after cut. Marketing Analyst found out that increasing direct and organic traffic efforts were fruitless. Could this have anything to do with the drop in paid traffic? The answer is yes. To see this negative effect, the company should look at their attribution paths.

Traffic acquisition types always affect each other and the impact of these channels on each other should not be ignored. As can be seen in the picture, if you completely eliminate the paid channel, you are also affecting other traffic channels. Users who first come to the website with paid but then gain familiarity and come organically and directly are eliminated.

Also, Butterfly Textile’s new user numbers decreased after ppc budget cut. This caused conversion rate to increase as most of the users are now loyal and engaged users. Because usually, new users decrease the conversion rate and loyal users increase it. The question which CMO needs to ask himself is: Do they want to spend some budget to attract new users to website and convert them into sales, or do they want to stick with their existing customers who know them and try to sell more to them? Increasing PPC budget can increase the number of sessions, but will that worth the money they spend? Investigating this will be the most important issue.

To sum up, this article was about real life case example sourced by Butterfly Textile Co. I hope you will find it inspiring.