Does PPC fit in to your marketing budget? Find out with our PPC budget calculator
We collaborated with Justin Wagner at Adfinitely on this post. Adfinitely is an Atlanta-based company that provides marketing technology to multi-location businesses.
PPC Budget Calculator
Are you wanting to track ROI on your PPC spend beyond form fills and downloads? Most of today’s leading PPC agencies are using call tracking to track offline leads and conversions. Fill out the form below to uncover the PPC secrets that helped one agency increase call conversions for their client by 400%.
7 rules for preparing a PPC ad spend budget
1. Selecting keywords for your
2. Research trends
3. Research ( Per Click) estimates
4. Target geographic areas important to your
5. Run ads at specific times to your and industry
6. Target devices that are specific to your customers
7. Monitor your position, , and conversion
Will PPC be profitable for you?
So you’ve done your research, and it looks like there are some reasonably priced keywords for your product along with a good handful of people searching for those keywords each month. The next step is to take a look at your products, customers, and site analytics. For some businesses, looking at products means average order size. For others, it might mean lifetime customer value. The takeaway here is you need to know the value of driving one potential customer to your website, whether it’s $30 or $3,000.
Next, you want to look at your site analytics to determine your conversion rates, or the rate at which people are turning into customers. How often does a new site visitor become a customer or purchase your products? The higher the rate of purchase, and the higher the ticket price on an individual sale, the more we can afford to spend on driving traffic to the site.
For example, if we know the average order size on our website is $100, clicks are roughly $1, and our conversion rate is 2%, then for every 50 people we get to the site, one will make a purchase. This leaves our profit for those 50 clicks at $50, if we already have our margin baked into average order size. But if we can bump our conversion rate up to 7%, we get 3.5 purchases on average for $350 in total sales, equalling $300 in profit.
PPC budget calculator, plus budgeting tips
Once you’ve determined your campaign will be profitable, you can take calculations one step further and start to think about what a reasonable budget would be.
Let’s say, for example, when using the Google Keyword Planner, you learned that ~5,000 people search for products like yours every month, using a variety of different keywords in their queries. Let’s also say the average cost per click for those search terms was just $1.
Let’s also take a guess at an average click-through-rate for these keywords (the rate at which people will click your ad when they see it on the page). When figuring out a click-through-rate, you can consult various charts and websites that give averages per industry, but as a whole, it’s going to vary wildly, so we’d recommend starting with 5% then adjusting your calculations based on real-world data when your campaign starts. Now, with a 5% CTR (click-through-rate) and ~5,000 monthly searches at $1/click, you could expect to see roughly $250 in spend.
That seems simple enough, but remember that all of these numbers can vary wildly, from clicks costing more than $25 to CTRs both above 10% and below 1%. The beauty of PPC, however, is that you can monitor all these factors continuously and only spend money on clicks and keywords that you know are going to be profitable.
So how much should you spend on PPC?
The real answer here is: As much as possible, so long as you’re staying profitable. If your campaigns are driving more revenue than they’re costing, why slow down?
To start, you can use the tips and calculator above to at least get an approximation of how much you could spend and whether not you should even try in the first place.
The post How much should you spend on PPC? PPC Budget Calculator & Tips for setting a budget appeared first on CallRail.