How to Work Out Your PPC Budget for Your Next Campaign

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A lot of digital marketers incorporate pay-per-click (PPC) into their marketing strategy for many reasons. The first being that it’s a highly cost-effective marketing strategy. You only need to pay when a user clicks the ad to get to your website. Second, you can target your ad as finely or as broadly as you want using location, device, and other criteria. Third, PPC campaigns are easily measurable, and their impact can be felt almost immediately. You can quickly determine your return on investment (ROI) and refine your strategy accordingly. This is what sets PPC apart from search engine optimization (SEO) despite SEO being free. SEO takes months or even a year to produce results.

However, setting up a PPC campaign isn’t that easy. To get your best ROI, you need to spend time optimizing your campaign and learning about how to be more efficient with your PPC strategy. Most businesses work with a PPC agency, but there are many free online sources if you don’t have the necessary funds. Another thing you need to remember is that a click doesn’t always mean revenue. Most sites have a 2-3% conversion rate. This means that for every 1,000 users that visit your website, only 20-30 of them could turn out to be paying customers. If you don’t refine your PPC strategy to maximize conversion, it could result in poor ROI.

The importance of restraint

Most novice marketers would be tempted to cast a wide net, but this could end up costing your business a lot of money without significant returns. Phoenix PPC agency recommends setting a budget for your PPC campaign. Being financially restrained also forces you to make better and more creative decisions on ad placement, targeting, and other PPC factors. But how do you determine how much is a good amount?


  • Define your goals and timeline


Having clearly defined goals is vital when deciding a budget. Look back on the metrics of your previous campaign to determine your bottom line. Ask yourself what’s important for your business right now and how you plan to obtain it. How much are you willing to spend on each customer? Are you focused on ROI or lead generation? Are your resources limited? Some examples of good, concrete goals for PPC campaigns are:

  • Acquire 500 new customers in 30 days at a rate of $50 per acquisition
  • Increase brand awareness by 80% in 30 days
  • Double site traffic from the previous PPC campaign


  • Calculate traffic requirements


Now that you have your goals laid out, you need to know how much traffic you need to generate to achieve those numbers. Use your previous PPC campaign metrics as a basis for estimations. If your goal is to acquire 500 new customers in 30 days, and your conversion rate was 4% based on your previous PPC campaign, you’ll need 12,500 site visitors in a month to achieve your goal.


  • Estimate costs


Now that you know how much traffic you need to generate to achieve your goals, you need to identify how much PPC is needed to get that much traffic into your website. This is known as a cost per click (CPC). Once again, your previous PPC campaign is where you can infer this information. Most analytics tools will already have this information in a handy summary table. Assuming you average at a $0.51 CPC. If you need 12,500 clicks and each click costs $0.51, multiplying them should give you your estimated cost for your campaign, which is $6,375.


  • Adjust for wiggle room


To be on the safe side, instead of assigning a rigid value to your budget, you should assign a range. Based on your historical PPC data, take your lowest CPC and your highest CPC and use them to identify your maxima and minima. If, according to your metrics, your lowest CPC was $0.21 and your highest was $0.95, multiplying those values by your required traffic would yield a range for your budget, which in this case is $2,625-$11,875.

It’s important to remember that whatever value or range you come up with shouldn’t be set in stone. Your budget should be flexible in the face of emerging trends, disruptions, and changes in user behavior. As long as you base all your decisions on data and sound logic and not guesswork or random advice, you won’t run into any pitfalls. When in doubt, reach out to a reputable PPC agency to guide you in budgeting and optimizing your PPC campaign.


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