{"id":29297,"date":"2020-10-08T07:00:28","date_gmt":"2020-10-08T14:00:28","guid":{"rendered":"https:\/\/www.eigene-homepage-erstellen.net\/?p=29297"},"modified":"2023-11-29T12:11:49","modified_gmt":"2023-11-29T20:11:49","slug":"how-to-set-a-ppc-budget","status":"publish","type":"post","link":"https:\/\/www.eigene-homepage-erstellen.net\/blog\/ppc\/how-to-set-a-ppc-budget.htm","title":{"rendered":"How to Set a PPC Budget"},"content":{"rendered":"\n

Updated on October 8, 2020, to include new information and insights. <\/em><\/p>\n

“What Should My PPC Budget Be?”<\/strong><\/p>\n

This is a question that we get asked a lot by businesses for a few reasons. Either they are just getting started with pay-per-click advertising for the first time, launching a new aspect of their PPC strategy, or simply reevaluating their approach to ensure they are investing correctly.<\/p>\n

Depending on how advanced you are with tools like Google’s Keyword Planner, Google Analytics, and digital marketing in general, the short answer may be:<\/p>\n

\n
Define your SMART business goals for PPC<\/li>\n
Evaluate past performance using a simple framework like our Click-Worth Calculator<\/a><\/li>\n
Determine your profitability requirements<\/li>\n
Go!<\/li>\n<\/ul>\n
But let’s take a deeper look at what that means, and review some of the fundamentals that should be informing the “right” budget for your business. That said, we aren’t going to spend much time talking about how to improve profitability here. But if your interest is piqued, our Building Successful PPC<\/a> blog series is a good place to start.<\/p>\n
“Am I spending too much? Not enough? Am I spending on the right platforms and in the right places? How do I know if our spending falls in line with our goals?”<\/strong><\/p>\n
What a company spends on paid advertising shouldn’t be a static number. Budgets change. Goals change. Spending changes. There isn’t a right answer. However, there can (and should) be a method behind the madness.<\/p>\n
Let’s walk through a framework that can help shed some light on the budget question the next time it comes up for you.<\/p>\n
Keep in mind:<\/p>\n
\n
There is no absolute right answer to the PPC budget question.<\/li>\n
When making your PPC budgets, use ranges to hedge for error.<\/li>\n
Use data from estimate tools as a guideline—not the rule.<\/li>\n<\/ol>\n
Start With Your Goals<\/h2>\n
Before we get to the dollars and cents on how much you should spend, it’s vital to define what you’re spending for. Setting actionable, quantitative goals with a timeline for your PPC spend is a must.<\/p>\n
If a stated goal feels vague or unattainable to you, it probably is. Use a SMART framework<\/a> (Specific, Measurable, Achievable, Relevant, Time-bound) to get this off the ground.<\/p>\n
Interested in acquiring new customers? All of the customers in your market? Or can you only service a set number of new customers at one time? Does it matter how much you pay for each new customer? Is your inventory depreciating quickly (e.g., retail), so that conversions now are worth more than conversions in three months?<\/p>\n
Determining goals for your PPC spending can go many different ways. Let’s take a look at common goals for companies engaging in paid advertising online:<\/p>\n
\n
ROI-focused lead generation or customer acquisition:<\/strong> “We want to acquire 100 new customers within the next 30 days paying no more than $50 per new customer.”<\/li>\n
Absolute lead generation or customer acquisition growth:<\/strong> “We want to acquire 100 new customers within the next 30 days regardless of the cost per new customer.”<\/li>\n
Brand awareness:<\/strong> “We want to show 5 million impressions to potential customers over the next 30 days.”<\/li>\n<\/ol>\n
As a working example through this post, we’ll use The Ski Shop–a fictional e-commerce store looking to unload their outdated ski boot inventory before their new product line comes in for the upcoming season.<\/p>\n
Using paid advertising as one source of traffic during an upcoming clearance sale, the team at The Ski Shop has determined that they need to acquire 200 new boot customers within the next 30 days before their new inventory hits the store. For simplicity, we’ll assume that they absolutely must have all merchandise gone, to avoid getting into more complicated minimum-margin calculations here.<\/p>\n
The Ski Shop’s goal:<\/strong> drive 200 new customers via paid advertising regardless of cost over the next 30 days.<\/p>\n
Determine Traffic Generation Requirements<\/h2>\n
Once you have your definable, quantitative goal with a timeline attached to it, we can move onto the next step of the budgeting process: traffic generation requirements.<\/p>\n
Based on your goal, how much traffic do you need to drive to reach that goal within your specified timeline?<\/p>\n
Instead of guessing, use any historical data from your analytics platform to educate your estimations.<\/p>\n
If you have a full business cycle worth of historical PPC conversion figures, that’s your ideal place to start. If you’ve never done PPC before, are launching a new strategy with different expected conversion rates, or you haven’t been running for long enough to map out any significant seasonal changes, use your website’s overall conversion rate to get an idea of how often people are converting.<\/p>\n
Important: if you do use overall website conversion rates to approximate at this point, bear in mind you may be reaching people at different stages of the buyer’s journey with paid traffic than you are with organic or direct traffic.<\/em><\/p>\n

Start With Your Goals<\/h2>\nBefore we get to the dollars and cents on how much you should spend, it’s vital to define what you’re spending for. Setting actionable, quantitative goals with a timeline for your PPC spend is a must.<\/p>\n