the short story project


Nancy Petter

How to Set a PPC Budget

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.

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:

Define your SMART business goals for PPC
Evaluate past performance using a simple framework
Determine your profitability requirements

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.

“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?”

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.

Start With Your Goals
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.

Determining goals for your PPC Service Company in New York spending can go many different ways. Let’s take a look at common goals for companies engaging in paid advertising online:

ROI-focused lead generation or customer acquisition: “We want to acquire 100 new customers within the next 30 days paying no more than $50 per new customer.”
Absolute lead generation or customer acquisition growth: “We want to acquire 100 new customers within the next 30 days regardless of the cost per new customer.”
Brand awareness: “We want to show 5 million impressions to potential customers over the next 30 days.”

Determine Traffic Generation Requirements
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.

Based on your goal, how much traffic do you need to drive to reach that goal within your specified timeline?

Instead of guessing, use any historical data from your analytics platform to educate your estimations.

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.


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