How to Calculate PPC Budget
Within the last 10 years, PPC advertising has become one of the most important go-to forms of marketing for your business, service, or product. Pay-Per-Click marketing is useful for the largest corporations like Apple, all the way down to the local landscaper. This promotional tool can be used in a variety of different ways. From displaying products in the Google Shopping Feed to presenting rich display adverts on websites relevant to your own.
Google Ad Words (PPC) is a powerful tool that can be utilised by anyone to promote their business or brand to online users.
But at the same time, Pay Per Click advertising has a few specific requirements and demands. There are important guidelines your website should meet to ensure you get the most out of your ads. The first step towards getting the most out of your ads is setting a budget.
It is important to know that your budget can be affected based on your bidding strategy. In this blog, we’ll discuss how to calculate a PPC budget for a CPC (Cost Per Click) rather than a CPA (Cost Per Acquisition) bid strategy.
Things to Take Into Account When Calculating a PPC Budget
Now, to begin calculating a PPC budget, you must consider a few things:
What Niche are You Aiming to Advertise in?
Needless to say, some niches online are more competitive than others. You can see a good example of this by comparing the Financial/Loan niche with the dog accessories niche. If you are targeting a competitive niche, this means you are likely going to need to spend more, so your PPC adverts appear on SERPs.
How Well Optimised is Your Website?
Often when we talk about optimising your website, we typically mean “How well SEO optimised is your website?”. But in order for your website to be optimised for PPC, there is a different set of criteria to meet. But this isn’t a reason to panic.
This doesn’t mean that you have to completely restructure your website to fit your ads, wasting all the time you have put into making sure your website will appear in the organic results. Instead, you can have dedicated PPC Pages that are designed to be relevant to your ads and convert (either through a contact form, sign up, click of a button, or even a full sale). You can then noindex these pages to make sure they do not cannibalise your website rankings.
Keyword Research and Keyword Intent
When optimising for SEO, we will look for keywords that are relevant that attract a lot of searches. Competing for these keywords is what drives traffic to your website. Whether the keywords that you target are informational, or action-driven, there are benefits to targeting both.
However, with PPC, ensuring your budget is being spent to direct traffic to ensure conversions is crucial. Depending on your budget, niche, and service it can be more effective to target “high intent to buy” keywords compared to high traffic generic keywords.
Targeting a keyword like this will have less competition and also tells us that the users searching this know exactly what they are looking for. This means that if you fit the users’ criteria, your ads will be more effective at converting. Looking into keyword intent can also reduce the cost of each individual click from SERPs.
Why not Just Throw Money at it?
Remember, the point of PPC campaigns is to get the biggest ROI (Return On Investment) as possible. Typically, we tend to think the more we put into Adwords, the more profit will be generated. But this is not always true.
Yes, throwing more money at your ads will increase the ad rank for your PPC Campaigns and should mean that you appear higher on SERPs. But learning to fine-tune your account to return the most profit is a smarter and more profitable way to build your PPC campaign.
Calculating a PPC Budget
When it comes to calculating your PPC budget, it is essential that you understand the following:
– Average Conversion Cost
– New Client/Customer Goal
– Close Rate of Leads
– How Many Leads You Need From PPC
Once you understand these factors, you can work out how much of your budget you want to put into your PPC marketing campaign.
A formula which can help calculate what amount of budget you will need for your PPC campaign is:
PPC Budget = (Number of Customers / Close Rate of Leads) / Website Conversion Rate * CPC
Number of Customers = (Revenue / Sales Period) / Average Conversion Amount
I hope that this blog helps you discover what budget you will need to make the most out of your Pay Per Click campaign. If you wish to discuss your business’s digital marketing with us then you can use our contact page, or call us on 01604 806020.
Hello! My name is Matt and I'm one of the SEO Executives here at Bright Design. Starting off as the Digital Marketing Apprentice, I have grown my skills and knowledge of SEO and Digital Marketing. Since then i have passed my Level 3 Digital Marketing Apprenticeship, Level 4 CIM in Digital Marketing, KM2, Google Analytics, Fundamentals in Google Ads and now I am Search and Shopping AdWords qualified. Now I am heavily involved in the ranking of websites, spending too much time and money on classic cars and breathing to fuel my oxygen addiction.