Pay Per Click Budgeting Tips

pay per clickAll website owners want their website to rank as high as possible on Google, Bing and Yahoo! There are two main ways to accomplish this:

  1. Optimizing your site so it will appear in those search results organically. This is known as SEO or search engine optimization.
  2. Paying for ad space within search results. This is known as SEM or search engine marketing. In search engine marketing, PPC stands for pay-per-click advertising. It’s one of the best online strategies out there, and can offer good returns for small businesses.

In a PPC campaign, you pay Google (or other search engines) to list ads for your site in Google search results. These ads appear both above and to the right of organic search results. These ads are sold in an auction, so you bid what you want to pay and those bids determine how prominent your ad will be in the search results. By choosing particular keywords that work best for your business, you’ll only pay when a user clicks on your ad. But the question is: How do you know how much you should spend on a PPC campaign?

The factors that will determine your Pay Per Click budget will depend on your niche industry, the size of your business, your customers, your goals, your revenue, etc. Many small businesses allocate about 20% of their total sales to marketing. Depending on your business model, half of that budget could be spent on offline marketing and the other half online. But if online sales are more important to your business, then you should consider spending more for online marketing

Ask yourself how much your business can afford to spend on online marketing. You’ll also need to know how you place value on a lead, what your current conversion rate is, and, finally, how many leads you’ll need through PPC. Once your marketing team knows the answers to these questions, you can do some basic calculations to help you figure out a budget.

Estimating your budget example:

Step One:
• How much are you willing to spend for a lead? For this example, we will say $10 per lead.
Step Two:
• How many new clients would you like in a month? For this example, we will say that you want 10 new clients.
Step Three:
• From experience, how many of your calls or leads turn into clients? For 10 new clients at a 10% close rate, you need 100 PPC leads per month (10/0.10 = 100)
Step Four:
• Calculate your budget: 100 leads x $10 per lead = $1,000

If this is more than you can afford then you need to adjust your numbers above.

Pay Per Click Tips:

  • Start with Google, then expand to other search engines
  • Create several ads and test to see which ads work best
  • Only bid on terms that are relevant to your business. Use a program like Word Tracker or Google AdWords to find the ones that are right for your business. They’ll show you estimated cost per click and searches per day for keywords. The more specific the term, the cheaper the bid.
  • By default, Google will set your campaign nationally. If you’re a local business, customize your location targeting.
  • The cost of bidding for keywords can be expensive. Some people try to find very specific keywords.

Seeing real results can take time. Don’t shut it down when you don’t see the traffic you were hoping for right away. Successful campaigns take three to six months. You need to make sure your budget can handle experimenting to get the right ad and target. If you need help with your Pay Per Click marketing, contact us… we can help!

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