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How to Calculate Churn Rate + 9 Ways to Decrease It

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How to Calculate Churn Rate + 9 Ways to Decrease It

Churn rate is a proportion of customers who stop paying for a product or service during a given time period. It’s the complete opposite of growth rate, making it one of the most important marketing and sales metrics for subscription-based companies.

It’s a seemingly easy-to-understand metric. But the simple formula to calculate churn rate has some limitations and potential traps many marketers may not take into account. Also, contrary to popular belief, you can influence churn long before someone becomes a customer.

There’s quite a lot to explore here. In this article, you’ll learn the following:

Let’s dive into it.

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What makes churn rate so important?

There are multiple reasons why keeping track of your churn rate and working with it can help to boost your marketing performance. Well, five main reasons to be specific.

1. Direct revenue impact

Churn rate is a decelerator of your growth rate. But unlike the growth rate, a certain percentage of churn is here to stay. Many fast-growing companies may fall into the trap of ignoring high churns when their growth is much higher, but it’s not a sustainable business model.

A 15% churn rate may not seem that bad when a startup grows 200% year-over-year. But that growth rate will eventually fall, and the churn may not. Any company will sooner or later suffer from high churn rates even if they weren’t such a big problem initially.

The sooner you start tackling your churn rate, the better. It has compounding effects. Let’s consider two companies with $1M ARR (annual recurring revenue) each and a similar growth rate of 25%. But they have different churn rates (scroll horizontally to see all table columns):

  Year 0 ARR Year 1 ARR Year 2 ARR Year 3 ARR Year 4 ARR Year 5 ARR
25% growth
5% churn
$1,000,000 $1,200,000 $1,440,000 $1,728,000 $2,073,600 $2,448,320
25% growth
10% churn
$1,000,000 $1,150,000 $1,322,500 $1,520,875 $1,749,006 $2,011,357

That’s what a difference of 5 percentage points in churn rate can do to revenue. The higher you churn, the slower you grow. Easy as that.

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2. Influence your word-of-mouth marketing

Word-of-mouth marketing (WoMM) is the process of influencing and encouraging natural discussions about a product, service, or company. I’m sure you’ve subscribed to some product or service because someone you trust told you about it. For this reason, WoMM can be one of the most powerful marketing channels.

The fact that more than 14,000 new customers in 2020 told us they were referred to Ahrefs by their friends is the best proof of WoMM’s importance:

Person said in registration form they learned about Ahrefs through friends

Churn rate reflects how well you meet the expectations of people who sign up for your product or service. While we can’t directly translate high churn into dissatisfaction, we can assume it’s a signal for a need to significantly improve your WoMM.

3. Early indicator of bad news for your business

Noticed a big spike in your monthly churn rate? Chances are you did something wrong that month.

Maybe product changes got negative feedback? Increased pricing? Any bad publicity? Or it could be your competitors stepped up their game and poached a significant number of your customers.

At any rate, having such an early indicator of these changes always comes in handy.

4. Customer lifetime value variable

Customer lifetime value (LTV) is a metric that estimates how much money an individual customer will spend on your products or services. Increasing your average customer’s worth not only improves your financial metrics but also allows you to spend more on acquiring new customers.

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LTV is yet another important metric, even a marketing KPI, that you should keep track of. The best way for subscription-based companies to calculate the metric is as follows:

LTV = avg. monthly revenue per customer/avg. customer monthly churn rate

The fact that churn enables calculations of other crucial marketing metrics should make it a staple in your spreadsheets and dashboards.

5. Proxy for performance forecasts

Many companies and their analysts engage in forecasting future performances. Accordingly, the churn rate is an essential variable in the calculations.

We’re not talking about in-house uses only. Churn rate is also an important indicator when it comes to investing in subscription-based companies.

So what does it take to calculate churn rate?

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How to calculate churn rate?

You might have already noticed that I talked about churn rates in relation to both customers and revenue. These are two types of churn rates, and here’s everything you need to know about calculating them.

Customer churn formula

Customer churn rate = (customers lost during period/customers at start of period) x 100

For example, on May 1, you had 1,000 active customers. And on May 31, you lost 25 of them. That means your monthly customer churn rate is 2.5%.

Easy start. Let’s move on.

Revenue churn formula

Revenue churn rate = (revenue lost during period/revenue at start of period) x 100

As you can see, it’s basically the same formula. Only the variable is different and a bit more tricky.

Here’s the thing: You should only take into account the revenue generated or lost from the customers you had at the start of the period.

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Let’s say you have $100K MRR (monthly recurring revenue) at the start of the period. You manage to upgrade some of your existing customers for an additional $5K MRR, lose a few customers who contributed to $4K MRR, and notice $2K worth of downgrades.

The revenue lost during the period is $1,000. This is as you lost $6K due to churned and downgraded customers. But you made $5K from customers who decided to upgrade. Your revenue churn rate for that period is therefore 1%, as the formula is (1,000/100,000) x 100.

Sometimes, your upgrades will be worth more than the revenue lost. In that case, you’ll have a negative number in the numerator, making the overall churn for that period negative. That’s your best-case scenario, as it means growth even without taking any new customers into account.

When to use which churn rate formula?

It doesn’t take a math genius to figure out that customer and churn rates usually differ. I recommend you calculate both churns because they provide additional information.

If:

  • Customer churn rate > revenue churn rate, then your churned customers have a below-average lifetime value.
  • Customer churn rate < revenue churn rate, then some of your higher-value customers churned.

Always try to put the numbers into context. For example, it’s possible to have a high revenue churn despite having done exceptionally well during a certain period.

Such a scenario happens when, for example, a business has a few percent of customers who contribute to the vast majority of revenue. If one of those huge accounts churned, it would make the revenue churn look bad.

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What are the limitations of the basic churn formula?

Calculating churn rate is easy until it isn’t. I won’t dive into all the nitty-gritty, but you should be aware of the following:

  • The formula works best when calculating churn rates on a monthly basis.
  • For longer periods of time, newly acquired customers who churn within the given period can skew the results. You have two options here. Disregard all churns from customers acquired during that period or add up monthly data and calculate a weighted average churn.
  • Consider calculating churns for some of your plans separately, especially if you target completely different market segments at the same time (e.g., SMBs vs. enterprises).
  • If you’re a startup, your churn rates will likely fluctuate a lot. That’s because you experience rapid growth and new customers tend to churn more frequently than those who stick around for a while. Your likely small sample size (# of customers) is also a factor here.
  • Your business may suffer from seasonal swings, so a higher churn rate may be natural during some months.

But the bottom line is that no matter how you calculate your churn, you should stick with it and work on decreasing whatever the number is.

So what’s really a bad, so-so, or good churn rate?

What’s a good churn rate for your business?

If you Googled this, you’d encounter anything between 2% and 8% to be an acceptable churn rate. That’s useless information for a metric where a 1% difference could mean tons of money. On top of that, some resources don’t even mention what type of churn over how long they’re referring to.

But we need a number. It’s important to have an anchor to recognize instances when churn is a minor problem and we should, thus, prioritize achieving other marketing objectives. Fortunately, all we need here is to get more specific with Google queries.

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Make a list of competitors. Google their names in combination with “churn rate” or “retention rate” (the inverse metric). Voilà:

Google SERP for "cloudfare 'churn rate'"
Google SERP for "fastly 'retention rate'"

You should get some specific numbers. If you have publicly traded companies on your list, the chances of getting more numbers for your benchmarking are high.

That’s because these companies regularly publish financial reports and have their executives share metrics and data in interviews. But you can get lucky with private companies as well.

One important thing to keep in mind. You and your competitors likely target different segments of the market, and that has a huge impact on churn rates.

As you can see in the example above, Cloudflare reports 36% annual churn, while Fastly is at 0.7%. They’re both Content Delivery Network (CDN) providers, but Cloudflare caters to everyone in the market (including a free plan option). But Fastly is only targeting enterprise and high-value customers who usually sign long-term contracts.

All right. So you found out that your churn is probably too high and you should work on decreasing it. That’s what the second half of this post is all about.

Nine ways to decrease churn rate

There seems to be a misconception that churn happens after someone becomes your customer. No. You can influence your churn rate in all stages of the marketing funnel:

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Funnel with six sections. From top to bottom (Awareness, Interest, Consideration, Action, Loyalty, Advocacy)

Let’s show you how.

1. Collect feedback from churned customers

Talking to your customers is an important part of market research. But you may learn even more when you talk to people and companies that stopped paying for your product or service.

Now don’t fall into the trap of taking action on everything you hear from those who churned. Just systematically collect the feedback to get a solid sample. Then decide if taking action on their objections and problems makes sense for your product roadmap and marketing strategy.

Since prioritization mainly revolves around two variables—effort and outcome—you’ll probably focus more on problems brought up by your most valuable customer segments.

You may also find out that a certain percentage of your customers only need to use your product for a month or two every year. You’ll get these insights after collecting such feedback for a while. Then you can account for this natural churn to help you tackle the more important churn.

2. Fix your positioning

Positioning is how your target market should perceive your brand. It’s the intended brand image that consists of associations people have of your brand and products.

Positioning allows you to differentiate from your competitors and, in some cases, even influence how the target market perceives your competitors.

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Let’s give the theory a more actionable spin. Your marketing communication should consistently convey what your product does and how a potential customer can benefit from that. For example, here’s a humble brag about our homepage that does the job of providing clear communication well:

Ahrefs' homepage positioning and CTA button below to sign up for Ahrefs

This plays a huge role in having new users who know what to expect from Ahrefs and how we can help them. We’re also confident that we can meet or, even better, exceed those expectations.

Churns often happen when you overpromise and underdeliver. Good positioning helps fix the first. So how do you figure out how to position your product?

Again, we’re back at market research that should tell you about the preferences of each of your market segments and what’s important for them. Adjust your positioning and communication based on this.

3. Make sure you target the right audience

Some customer segments churn more than others. You saw the brutal contrast between Cloudflare (with 36% churn) and Fastly (with 0.7% churn). In an ideal world, you’d be spending most of your resources on reaching audiences that allow for product-market fit.

In other words, you can decrease your churn rates if you get more qualified visitors to your website. This especially applies to the middle and bottom parts of the marketing funnel.

Most people probably associate the word “target” with advertising. You can be visible at more relevant places, narrow down targeting options in advertising platforms, etc. That’s pretty straightforward.

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But you can also improve the quality of your organic traffic. It influences all parts of the funnel and is a major traffic driver for many companies.

The key to this is solid keyword research. Your best content opportunities are found in topics with high traffic potential, low keyword difficulty, and high business value that’s about naturally plugging your product. However, in reality, you’ll almost never find a keyword that meets all three criteria, so you’ll have to make compromises.

For example, the keyword “churn rate” has a solid traffic potential and a so-so KD score (for our website):

It also provides a few opportunities to naturally mention Ahrefs as a solution to some of the problems here. See what I did right now?

4. Better sales and customer service experience

The experience you have with the customer-facing staff makes a big difference in how you perceive a product, service, or brand. Just think about your best hotel or restaurant experience, how you felt there, and how much of that experience was influenced by great customer service.

This principle can apply to any service you’re subscribed to. I once worked for a B2B company that made “best customer experience” as one of its USPs (unique selling points). Customers truly cherished that, especially if they had so-so or bad experiences with that company’s competitors.

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What’s more, even if a customer thinks about churning, a great sales or customer service representative can save the day.

Here are a few suggestions to improve direct communication with your prospects and customers:

  • Have communication guides or SOPs that your staff adheres to
  • Implement an evaluation and feedback system for your customer-facing teams
  • Build a product that your sales and customer service teams truly believe in and like
  • Make sure to not shoot your staff in the foot, e.g., don’t make huge changes on Friday or plan outages for busy periods
  • Be a good employer

5. Offer a trial or freemium version of your product

Yes, there are still subscription-based companies that don’t let you try their product without any commitments. This is especially true for enterprise products.

The objective of a trial or freemium is to meet or even exceed a prospect’s product expectations. Making your prospects confident in their decisions when they’re about to make the conversion pays off in the context of higher LTV and lower churn.

An important takeaway here is you can make people try your product way before they’re ready to sign up. Our keyword generator, for example, is one of many free SEO tools we offer:

Excerpt of Ahrefs' "free keyword generator" page; some text and then below is a picture of Phrase match report

People looking up keywords that lead to this page aren’t often well-versed in what SEO toolsets like Ahrefs have to offer. But providing free solutions to problems higher up the funnel makes them familiar with our tools one step at a time.

A similar use case is our free Ahrefs Webmaster Tools. It provides SEO data, insights, and recommendations that are useful and actionable even for beginners. After a few weeks or months of using these products, the beginner may consider stepping up their SEO game and signing up for the full version.

But it’s difficult to make SEO beginners experience the full potential of our tools right away. This leads us to…

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6. Improve onboarding experience

The best way to keep a customer is to show them how they can squeeze the most out of your product as soon as possible. This hugely depends on the complexity of your product, so I’ll show you how we do it. (By the way, I already mentioned that our all-in-one SEO toolset can be complex and overwhelming for a beginner.)

We start by sending an email that sets the stage for diving deeper into each tool:

Ahrefs' onboarding email. "Welcome" video above and list of main tools hyperlinked for easy access to more information

OK, an onboarding sequence of emails is a common practice. Let’s level up.

We have an extensive academy of video courses going through every nook and cranny of the toolset, showing you how to crush SEO:

Ahrefs Academy page with Sam's picture and link to each course

And if that’s not enough, all of our tools and reports contain explanations, tooltips, and how-to guides so that you can apply the best practices right away:

7. Provide great product education resources

This is related to the previous point but applied to the whole marketing funnel. Product education is at the forefront of our communication strategy. And there’s one thing we know for sure: You can’t over-educate your audience about the product. There are countless ways to use Ahrefs, and we’re glad that even independent experts share their tips:

The more complex your product is, the more you should prioritize education in your marketing communication.

Generally, our prospects already know Ahrefs pretty well before signing up. We took this to the extreme and even discouraged some people from signing up for our now-discontinued $7 trial:

Quote by Tim Soulo

We can afford this claim since we produce product-led content and educate our readers on how Ahrefs can help them solve hundreds of SEO and marketing problems.

Use every channel possible to distribute your product education resources. Here’s a list of all the channels we own and use for product education (feel free to take inspiration from them):

  1. Newsletter
  2. Ahrefs social media accounts + our personal accounts
  3. Ahrefs FB Insider group
  4. Ahrefs blog
  5. Ahrefs YouTube channel
  6. Ahrefs Academy
  7. Ubiquitous how-to guides and tooltips across the tool

8. Keep on improving your product

You can have the best product in your niche, but there will always be a huge list of features and improvements you can work on. Getting a new customer who assesses that you have the best product for them is great. But that favorable opinion can change in months or years to come if you rest on your oars.

There are three ways to guide your product roadmap:

  1. Collect and evaluate customer feedback (we do this partially in public)
  2. Monitor what the market wants (on social media, forums, industry events)
  3. Consult with experts using the product

9. Track and improve Net Promoter Score (NPS)

Remember the point about the influence of churn rates on your WOMM? NPS is the best proxy for improving both churn rate and WoMM.

NPS represents customer satisfaction and loyalty based on how likely they are to recommend your product or service to others.

You’ve surely encountered many NPS surveys already. Often, they look like this:

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NPS survey ranging from 1 to 10; 1 being "not likely to recommend Revolut" and 10 being "extremely likely to recommend Revolut"

The score the user selects dictates whether they’re a detractor, passive, or promoter:

Scale from 1 to 10. Less than 6 are detractors. 7 and 8 are passives. 9 and 10 are promoters

The NPS score is then calculated by subtracting the percentage of detractors from the percentage of promoters. It can range between ‑100 and 100. Anything above zero means that you have more promoters than detractors.

Most types of software that manage these surveys for you will also calculate the NPS. Generally speaking, an NPS score above 70 is considered exceptionally good. But always check benchmarks for your industry, as they may be much lower.

Improving your NPS will most likely decrease your churn and vice versa. Do note the tactics for achieving these objectives are interchangeable. NPS is just another method for tracking your progress and gaining more insights.

Final thoughts

Now, as we’re approaching the end, I want to mention a tactic that can decrease your churn but will most likely hurt your brand and reputation in the long run. And that’s making your subscriptions difficult to cancel. Don’t do this. Make your sign-up and cancellation processes clear and frictionless.

And remember this: A certain percentage of churn rate is completely fine and natural. Don’t obsess over the metric if you’re already doing well against the industry benchmarks.

Here’s wishing you lower churns and higher growth! If you’ve got any questions, ping me on Twitter.

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10 Paid Search & PPC Planning Best Practices

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10 Paid Search & PPC Planning Best Practices

Whether you are new to paid media or reevaluating your efforts, it’s critical to review your performance and best practices for your overall PPC marketing program, accounts, and campaigns.

Revisiting your paid media plan is an opportunity to ensure your strategy aligns with your current goals.

Reviewing best practices for pay-per-click is also a great way to keep up with trends and improve performance with newly released ad technologies.

As you review, you’ll find new strategies and features to incorporate into your paid search program, too.

Here are 10 PPC best practices to help you adjust and plan for the months ahead.

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1. Goals

When planning, it is best practice to define goals for the overall marketing program, ad platforms, and at the campaign level.

Defining primary and secondary goals guides the entire PPC program. For example, your primary conversion may be to generate leads from your ads.

You’ll also want to look at secondary goals, such as brand awareness that is higher in the sales funnel and can drive interest to ultimately get the sales lead-in.

2. Budget Review & Optimization

Some advertisers get stuck in a rut and forget to review and reevaluate the distribution of their paid media budgets.

To best utilize budgets, consider the following:

  • Reconcile your planned vs. spend for each account or campaign on a regular basis. Depending on the budget size, monthly, quarterly, or semiannually will work as long as you can hit budget numbers.
  • Determine if there are any campaigns that should be eliminated at this time to free up the budget for other campaigns.
  • Is there additional traffic available to capture and grow results for successful campaigns? The ad platforms often include a tool that will provide an estimated daily budget with clicks and costs. This is just an estimate to show more click potential if you are interested.
  • If other paid media channels perform mediocrely, does it make sense to shift those budgets to another?
  • For the overall paid search and paid social budget, can your company invest more in the positive campaign results?

3. Consider New Ad Platforms

If you can shift or increase your budgets, why not test out a new ad platform? Knowing your audience and where they spend time online will help inform your decision when choosing ad platforms.

Go beyond your comfort zone in Google, Microsoft, and Meta Ads.

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Here are a few other advertising platforms to consider testing:

  • LinkedIn: Most appropriate for professional and business targeting. LinkedIn audiences can also be reached through Microsoft Ads.
  • TikTok: Younger Gen Z audience (16 to 24), video.
  • Pinterest: Products, services, and consumer goods with a female-focused target.
  • Snapchat: Younger demographic (13 to 35), video ads, app installs, filters, lenses.

Need more detailed information and even more ideas? Read more about the 5 Best Google Ads Alternatives.

4. Top Topics in Google Ads & Microsoft Ads

Recently, trends in search and social ad platforms have presented opportunities to connect with prospects more precisely, creatively, and effectively.

Don’t overlook newer targeting and campaign types you may not have tried yet.

  • Video: Incorporating video into your PPC accounts takes some planning for the goals, ad creative, targeting, and ad types. There is a lot of opportunity here as you can simply include video in responsive display ads or get in-depth in YouTube targeting.
  • Performance Max: This automated campaign type serves across all of Google’s ad inventory. Microsoft Ads recently released PMAX so you can plan for consistency in campaign types across platforms. Do you want to allocate budget to PMax campaigns? Learn more about how PMax compares to search.
  • Automation: While AI can’t replace human strategy and creativity, it can help manage your campaigns more easily. During planning, identify which elements you want to automate, such as automatically created assets and/or how to successfully guide the AI in the Performance Max campaigns.

While exploring new features, check out some hidden PPC features you probably don’t know about.

5. Revisit Keywords

The role of keywords has evolved over the past several years with match types being less precise and loosening up to consider searcher intent.

For example, [exact match] keywords previously would literally match with the exact keyword search query. Now, ads can be triggered by search queries with the same meaning or intent.

A great planning exercise is to lay out keyword groups and evaluate if they are still accurately representing your brand and product/service.

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Review search term queries triggering ads to discover trends and behavior you may not have considered. It’s possible this has impacted performance and conversions over time.

Critical to your strategy:

  • Review the current keyword rules and determine if this may impact your account in terms of close variants or shifts in traffic volume.
  • Brush up on how keywords work in each platform because the differences really matter!
  • Review search term reports more frequently for irrelevant keywords that may pop up from match type changes. Incorporate these into match type changes or negative keywords lists as appropriate.

6. Revisit Your Audiences

Review the audiences you selected in the past, especially given so many campaign types that are intent-driven.

Automated features that expand your audience could be helpful, but keep an eye out for performance metrics and behavior on-site post-click.

Remember, an audience is simply a list of users who are grouped together by interests or behavior online.

Therefore, there are unlimited ways to mix and match those audiences and target per the sales funnel.

Here are a few opportunities to explore and test:

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  • LinkedIn user targeting: Besides LinkedIn, this can be found exclusively in Microsoft Ads.
  • Detailed Demographics: Marital status, parental status, home ownership, education, household income.
  • In-market and custom intent: Searches and online behavior signaling buying cues.
  • Remarketing: Advertisers website visitors, interactions with ads, and video/ YouTube.

Note: This varies per the campaign type and seems to be updated frequently, so make this a regular check-point in your campaign management for all platforms.

7. Organize Data Sources

You will likely be running campaigns on different platforms with combinations of search, display, video, etc.

Looking back at your goals, what is the important data, and which platforms will you use to review and report? Can you get the majority of data in one analytics platform to compare and share?

Millions of companies use Google Analytics, which is a good option for centralized viewing of advertising performance, website behavior, and conversions.

8. Reevaluate How You Report

Have you been using the same performance report for years?

It’s time to reevaluate your essential PPC key metrics and replace or add that data to your reports.

There are two great resources to kick off this exercise:

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Your objectives in reevaluating the reporting are:

  • Are we still using this data? Is it still relevant?
  • Is the data we are viewing actionable?
  • What new metrics should we consider adding we haven’t thought about?
  • How often do we need to see this data?
  • Do the stakeholders receiving the report understand what they are looking at (aka data visualization)?

Adding new data should be purposeful, actionable, and helpful in making decisions for the marketing plan. It’s also helpful to decide what type of data is good to see as “deep dives” as needed.

9. Consider Using Scripts

The current ad platforms have plenty of AI recommendations and automated rules, and there is no shortage of third-party tools that can help with optimizations.

Scripts is another method for advertisers with large accounts or some scripting skills to automate report generation and repetitive tasks in their Google Ads accounts.

Navigating the world of scripts can seem overwhelming, but a good place to start is a post here on Search Engine Journal that provides use cases and resources to get started with scripts.

Luckily, you don’t need a Ph.D. in computer science — there are plenty of resources online with free or templated scripts.

10. Seek Collaboration

Another effective planning tactic is to seek out friendly resources and second opinions.

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Much of the skill and science of PPC management is unique to the individual or agency, so there is no shortage of ideas to share between you.

You can visit the Paid Search Association, a resource for paid ad managers worldwide, to make new connections and find industry events.

Preparing For Paid Media Success

Strategies should be based on clear and measurable business goals. Then, you can evaluate the current status of your campaigns based on those new targets.

Your paid media strategy should also be built with an eye for both past performance and future opportunities. Look backward and reevaluate your existing assumptions and systems while investigating new platforms, topics, audiences, and technologies.

Also, stay current with trends and keep learning. Check out ebooks, social media experts, and industry publications for resources and motivational tips.

More resources: 

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Google Limits News Links In California Over Proposed ‘Link Tax’ Law

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A brown cardboard price tag with a twine string and a black dollar sign symbol, influenced by the Link Tax Law, set against a dark gray background.

Google announced that it plans to reduce access to California news websites for a portion of users in the state.

The decision comes as Google prepares for the potential passage of the California Journalism Preservation Act (CJPA), a bill requiring online platforms like Google to pay news publishers for linking to their content.

What Is The California Journalism Preservation Act?

The CJPA, introduced in the California State Legislature, aims to support local journalism by creating what Google refers to as a “link tax.”

If passed, the Act would force companies like Google to pay media outlets when sending readers to news articles.

However, Google believes this approach needs to be revised and could harm rather than help the news industry.

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Jaffer Zaidi, Google’s VP of Global News Partnerships, stated in a blog post:

“It would favor media conglomerates and hedge funds—who’ve been lobbying for this bill—and could use funds from CJPA to continue to buy up local California newspapers, strip them of journalists, and create more ghost papers that operate with a skeleton crew to produce only low-cost, and often low-quality, content.”

Google’s Response

To assess the potential impact of the CJPA on its services, Google is running a test with a percentage of California users.

During this test, Google will remove links to California news websites that the proposed legislation could cover.

Zaidi states:

“To prepare for possible CJPA implications, we are beginning a short-term test for a small percentage of California users. The testing process involves removing links to California news websites, potentially covered by CJPA, to measure the impact of the legislation on our product experience.”

Google Claims Only 2% of Search Queries Are News-Related

Zaidi highlighted peoples’ changing news consumption habits and its effect on Google search queries (emphasis mine):

“It’s well known that people are getting news from sources like short-form videos, topical newsletters, social media, and curated podcasts, and many are avoiding the news entirely. In line with those trends, just 2% of queries on Google Search are news-related.”

Despite the low percentage of news queries, Google wants to continue helping news publishers gain visibility on its platforms.

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However, the “CJPA as currently constructed would end these investments,” Zaidi says.

A Call For A Different Approach

In its current form, Google maintains that the CJPA undermines news in California and could leave all parties worse off.

The company urges lawmakers to consider alternative approaches supporting the news industry without harming smaller local outlets.

Google argues that, over the past two decades, it’s done plenty to help news publishers innovate:

“We’ve rolled out Google News Showcase, which operates in 26 countries, including the U.S., and has more than 2,500 participating publications. Through the Google News Initiative we’ve partnered with more than 7,000 news publishers around the world, including 200 news organizations and 6,000 journalists in California alone.”

Zaidi suggested that a healthy news industry in California requires support from the state government and a broad base of private companies.

As the legislative process continues, Google is willing to cooperate with California publishers and lawmakers to explore alternative paths that would allow it to continue linking to news.

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The Best of Ahrefs’ Digest: March 2024

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The Best of Ahrefs’ Digest: March 2024

Every week, we share hot SEO news, interesting reads, and new posts in our newsletter, Ahrefs’ Digest.

If you’re not one of our 280,000 subscribers, you’ve missed out on some great reads!

Here’s a quick summary of my personal favorites from the last month:

Best of March 2024

How 16 Companies are Dominating the World’s Google Search Results

Author: Glen Allsopp

tl;dr

Glen’s research reveals that just 16 companies representing 588 brands get 3.5 billion (yes, billion!) monthly clicks from Google.

My takeaway

Glen pointed out some really actionable ideas in this report, such as the fact that many of the brands dominating search are adding mini-author bios.

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Example of mini-author bios on The VergeExample of mini-author bios on The Verge

This idea makes so much sense in terms of both UX and E-E-A-T. I’ve already pitched it to the team and we’re going to implement it on our blog.

How Google is Killing Independent Sites Like Ours

Authors: Gisele Navarro, Danny Ashton

tl;dr

Big publications have gotten into the affiliate game, publishing “best of” lists about everything under the sun. And despite often not testing products thoroughly, they’re dominating Google rankings. The result, Gisele and Danny argue, is that genuine review sites suffer and Google is fast losing content diversity.

My takeaway

I have a lot of sympathy for independent sites. Some of them are trying their best, but unfortunately, they’re lumped in with thousands of others who are more than happy to spam.

Estimated search traffic to Danny and Gisele's site fell off a cliff after Google's March updatesEstimated search traffic to Danny and Gisele's site fell off a cliff after Google's March updates
Estimated search traffic to Danny and Gisele’s site fell off a cliff after Google’s March updates 🙁 

I know it’s hard to hear, but the truth is Google benefits more from having big sites in the SERPs than from having diversity. That’s because results from big brands are likely what users actually want. By and large, people would rather shop at Walmart or ALDI than at a local store or farmer’s market.

That said, I agree with most people that Forbes (with its dubious contributor model contributing to scams and poor journalism) should not be rewarded so handsomely.

The Discussion Forums Dominating 10,000 Product Review Search Results

Author: Glen Allsopp

Tl;dr

Glen analyzed 10,000 “product review” keywords and found that:

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My takeaway

After Google’s heavy promotion of Reddit from last year’s Core Update, to no one’s surprise, unscrupulous SEOs and marketers have already started spamming Reddit. And as you may know, Reddit’s moderation is done by volunteers, and obviously, they can’t keep up.

I’m not sure how this second-order effect completely escaped the smart minds at Google, but from the outside, it feels like Google has capitulated to some extent.

John Mueller seemingly having too much faith in Reddit...John Mueller seemingly having too much faith in Reddit...

I’m not one to make predictions and I have no idea what will happen next, but I agree with Glen: Google’s results are the worst I’ve seen them. We can only hope Google sorts itself out.

Who Sends Traffic on the Web and How Much? New Research from Datos & SparkToro

Author: Rand Fishkin

tl;dr

63.41% of all U.S. web traffic referrals from the top 170 sites are initiated on Google.com.

Data from SparktoroData from Sparktoro

My takeaway

Despite all of our complaints, Google is still the main platform to acquire traffic from. That’s why we all want Google to sort itself out and do well.

But it would also be a mistake to look at this post and think Google is the only channel you should drive traffic from. As Rand’s later blog post clarifies, “be careful not to ascribe attribution or credit to Google when other investments drove the real value.”

I think many affiliate marketers learned this lesson well from the past few Core Updates: Relying on one single channel to drive all of your traffic is not a good idea. You should be using other platforms to build brand awareness, interest, and demand.

Want more?

Each week, our team handpicks the best SEO and marketing content from around the web for our newsletter. Sign up to get them directly in your inbox.

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