How to Set Pay-Per-Click Budgets & Organize Campaigns
Posted by Nikki Wardle on Oct 18, 2018, 9:22:05 AM
Using pay-per-click is a great way to support your organic search engine marketing efforts and focus on keywords and topics that might be harder to rank for due to competition or if you are trying to attract visitors to a specific offer or event. That being said, it can be downright frustrating to determine how much of your marketing budget you should commit to any specific PPC campaign, because unlike companies like Google, Amazon, or Facebook, chances are, you don't have unlimited funds.
What is the best way to set budgets for ad spend and allocate specific amounts for individual campaigns?
It's easier than you think.
How to Set A PPC Budget
The biggest mistake I see when companies are setting ad spend budgets is they set a total dollar amount from the beginning. You wouldn't go car shopping and say, "I'm going to spend 32,456.08 for the car I want," so why would you do the same for paid search campaigns?
The answer is, you wouldn't, and you won't.
We're not suggesting that there should be no limit to the amount you spend, just look at all of the information before determining a final budget for your ad spend campaigns.
1. What is the value of a sale, lead, or email address to you?
One of the most important factors when determining your pay-per-click budget is the value of a sale, lead, or email address. A budget is going to be very different for a company that sells stickers than a company that sells diamond rings. The value of that customer is very different.
Let's take a look at the fictional diamond ring business and name it Faux Diamonds. Their website makes a profit of $100 for every ring they sell online, and they average one completed online sale for every 10 website visitors. If Faux Diamonds sets a maximum cost-per-click (CPC) bid of $10, the ad spend cost would equal what they profit, or simply put, they would break even. For Faux Diamonds to continue to be profitable, they would have to set maximum CPC bid less than $10.
2. What is The competition level for your keywords?
Before starting any campaign, Google Ads has some great tools to show you the competition for each of your keywords. Google Ads is a free tool that you can use to gather estimated traffic for your specific campaign and keywords. This tool will help you decide which keywords to ditch and which to keep. From here, you will have an idea of how much your keywords will spend per bid so you can make a proper budget to reach your marketing goal. This helps you set a rough budget to work with when using PPC.
3. WHAT IS your goal?
Setting an initial goal will help you in a couple of different ways. First, you'll be able to gauge your successes with a paid campaign. Second, you'll be able to better set a budget for the campaign.
Here is an example using our fictional Faux Diamonds company. The goal of the campaign is to generate 100 sales. We know that for every 10 clicks on their ads, one sale is generated. To generate 100 sales, we will need to generate 1,000 clicks on the ad per month. With an average click through rate of 3% (industry average), we need to generate about 33,333 impressions. And we know that we want to spend less than $10 per click. So our budget needs to be under $10,000 per month.
Organizing PPC Campaigns
If you have had experience running a Pay Per Click campaign using the Google Ads platform for your digital advertising, then you know how important it is to organize your campaign properly. The execution and overall success of your advertising campaign will depend largely on the correct placement of ads, the accurate targeting of keywords, and how you group your ads and campaigns together.
Getting all of these things right and working for you can be a hurdle when you're starting out. But when you’ve had enough practice, your Google Ads organizing skills will certainly come in handy. This will allow you to not only organize your campaign from the start but can also help when making necessary tweaks and changes to an ongoing campaign. Let’s explore some of the different elements of Google’s Ads platform and examples of how to organize your next PPC campaign.
Organizing on the account level is really only applicable if you have multiple companies that you’re currently advertising for. It is noteworthy because many people, especially those working for ad agencies, have multiple accounts they are working with.
The next level organization comes in the form of a campaign. People may get carried away at this step and want to organize all sorts of things into different campaigns. The best practice for naming and organizing a campaign is to keep the products you’re selling broad. A great example of this would be if you run a furniture store, you may have separate campaigns for beds and tables. Notice that both of these qualify as furniture, but the campaigns are divided into two specific types of furniture.
Within your campaign, you will have separate Ad Groups. At this point, you’re able to narrow the products you’re currently advertising. Continuing with our furniture store example, the campaign focusing on tables can be further divided into coffee tables and dining tables. This is done because someone searching for a coffee table will most likely search for “coffee tables” instead of just “tables.” Google Ads operates under the premise that someone searching for something on the Google search engine will be pretty specific.
The actual ads themselves are what your potential customer will see when searching for your products. Creating a few different ads with different copy is always a good idea. Google will automatically serve the ad that is performing the best, ensuring you maximize clicks from your campaign. We recommend creating at least three separate ads for each ad group, but this is nowhere near exact. Each campaign and ad group will call for different tactics.
Now that you’re ready to run your first PPC campaign, you can bring in more traffic and sales from your online presence! Remember to stay organized, check your results, and track progress!
Written by Nikki Wardle
Nikki has a degree in Marketing from Boise State University and has been an Inbound Marketing Specialist at Tribute Media since 2014.