Pay-per-click (PPC) advertising is a sure-shot approach for generating online leads. It is also quite economical. Businesses today want their Google Search ad copy compelling enough. They want it to stand out among competitors. They expect their Facebook ad copy to target the appropriate audience. However, to achieve these goals, garner more visibility, and increase revenue, the advertiser must be ready to invest sufficient capital.

A PPC budget decides how much one is willing to spend to increase the number of clicks on the website through paid advertisement. The spending amount depends on the business goals. It also depends on the projected conversion rates. In this article, we discuss the factors to consider while planning a PPC budget. We also provide suggestions for receiving higher returns on the fixed budget.

Determining the goals to set up a PPC budget

Before setting a PPC budget, it is crucial to define the end goals. It is also important to define the amount of traffic required to reach that goal. Advertisers must ask themselves the following questions before commencing PPC budget planning:

• How much are they ready to spend on the PPC campaign?
• What are the campaign goals?
• Who is the target audience?
• What is the current conversion rate?
• How many leads to expect?
• How to think long-term while planning Google Search ad copy budgets?
• What is the expected revenue from Facebook ad copy budgeting?
• How much ROAS (return on advertising spend) are they expecting?
• What will be more beneficial – daily or shared budgeting? 

Analyzing these queries will make it easier for the advertiser to design a professional budget plan for a successful PPC campaign.

Tips to design a PPC budget

Setting up a productive and wise PPC budget can significantly impact the success of a PPC campaign. Reviewing the budget at the beginning of each quarter can be beneficial in defining new goals or revamping the existing ones. Here is a list outlining some effective points to remember while PPC budgeting:

1. Fixing the goals

Set actionable and quantitative goals for the PPC campaign with a timeline. The SMART (Specific, Measurable, Achievable, Relevant, Time-bound) framework to define objectives will help. Be it customer acquisition, lead generation, or increasing brand awareness, being clear about the end goals helps decide the budget.

2. Determining the number of leads

Next, one must estimate the number of leads required to reach the goal within the timeline. Using the website’s past conversion figures or overall conversion rate, one can evaluate this number. 

3. Analyzing CPC (cost-per-click) estimates

Once the estimation of traffic needed is over, it is time to research keywords and search volume trends. Focus on high-intent keywords that will convert. Find out the search volume of the chosen keywords. 

Although one should look for higher search volumes, lower volumes can sometimes work for small businesses. This is because it means lower costs and lesser competition. Set an estimated CPC range based on the keywords and search volumes. Fixing the budget now becomes simple.

4. Controlling when to run ads

Once the budget allocation is done, and the campaign gathers pace by generating a clear ROI (return on investment), limit the timeframe of the ads. Make them visible only at the most profitable hours of the day. It helps in ongoing budget management.

5. Estimating the ROAS

Keep monitoring the conversion metrics. Figure out ways to improve them. Are the creative advertisements and ad copies generating enough leads? Which keywords are performing better? Track these aspects and tweak the budget strategies accordingly. 

Calculating the PPC budget

Once you have decided on the factors to design a profitable campaign, you can go one step further and plan a reasonable budget strategy. By following these steps, one can calculate the funding required for a PPC budget effectively:

1. Calculating the possible number of impressions

Begin by multiplying the average monthly searches of relevant keywords with targeted search volumes. It estimates the possible number of impressions an ad may receive incorporating all the keywords used.

2. Figuring out the potential click volume

Multiply the number of impressions by the expected CTR (click-through rate). Get the volume of potential clicks.

3. Setting the PPC budget

Multiply the potential click volume by the average PPC to determine the amount needed to fix a PPC budget.

How to Make the Most of Your PPC Budget?

Here are some suggestions to enhance the success of your PPC campaigns, irrespective of the budget size:

• Decide what you want to achieve from the campaign and plan forward. It will help avoid incurring unnecessary expenditures.
• Decide the budget based on the number of expected leads. 
• Be strategic while allocating the funds. Focus on the best-performing ads.
• Keep reviewing the performance of your keywords and checking if your Facebook ad copy length fits the latest standards. Avoid wasting resources on ad copies that are not converting.
• Use Google Search ad copy best practices to ensure proper utilization of funds.
• Geo-target your PPC campaign, if necessary, to focus on a localized target audience instead of spending money for global reach.

The bottom line

So, how much should one spend on PPC? There is no “one size fits all” answer for this. One must allocate the amount for PPC budgeting. This depends on the business size (small, medium, or large firms). Setting up an appropriate PPC budget can be tricky. The strategy is to start with a small amount. Then gradually expand it based on what does and does not work. 

After setting up the budget, one must monitor the ad’s performance constantly and determine the conversion rates. It is crucial to check if the budget allocated to the PPC campaign is delivering the expected leads and meeting business goals. 

Hiring a digital marketing agency (within your budget) to do all this for you is a good idea. If you are looking for more information on the creative process in advertising and digital marketing, subscribe to The Ad Digest. Connect with us to learn how to optimize your PPC budget and ad campaigns.