How Much Should We Spend?

Business owners are often concerned about the cost of advertising online especially when it comes to Pay per click and with good reason. Budgets PPC advertising campaigns vary. They can run anywhere from as little as $5 to hundreds of thousands a month.

Many businesses, especially small businesses, would like to run effective PPC campaigns without breaking the bank. It is therefore not surprising that this is one of the first questions they ask when deciding whether to use PPC or not.

Tips for setting your budget
One of the best parts of PPC is that you have a lot of control over what you spend on your campaign. You can pull out at any time too.

Your budget will play a major role in your PPC strategy. However, the success of your budget is not relative to the amount of money you spend. There are companies that see a good return on their investment (ROI) with limited PPC budgets and others that lose a lot of money with big PPC budgets. It is therefore important to consider various factors when determining how much you should spend on PPC.

The following tips will guide you in determining your PPC budget:
  • Have an open budget
This may sound counterproductive, but it is important. PPC budgets shouldn’t be set in stone. This is because the competitiveness of different keywords changes every day along with the cost per click for these words. It is therefore better to have a range within which you work to allow for the fluctuations.
  • Determine your breaking point
How much do you make per sale on average? This will help you determine what a good margin would be for each click. E.g. if you make an average of $100 per sale, then you may not mind paying $20 for a click that has the potential of turning into a sale.
  • What is the lifetime value of your campaign
What are your customers like? Do they buy items and keep coming back for more or purchase once and leave forever? It is important to consider how to nurture relationships with your customers in order to maximize the value of the PPC campaign beyond the click e.g. investing in email campaigns.
  • Consider professional PPC campaign managers
Don’t be fooled into thinking PPC is simple. It requires constant monitoring and a know-how of the SEO and PPC landscape. It takes considerable skill to run a successful PPC campaign. It therefore pays to have a professional handling your campaign on your behalf. Look for a consultant offering their services at a reasonable price.

Setting a PPC budget requires wisdom. Take your time to weigh all the factors involved.


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